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- Investors remained cautious last week, given rising trade tensions and a new wave of tariffs set for August, as legal battles and global negotiations add to market uncertainty.
- Despite jobless claims holding steady, uncertainty about trade and Fed policy is keeping investors focused on upcoming economic data.
- Developed international markets are up 19.2% year-to-date, mainly due to the U.S. dollar’s nearly 11% drop, making global diversification more attractive.3
1. Tariff Uncertainty Weighs on Markets
U.S. stock indices ended the week slightly lower, with the tech-focused Nasdaq Composite showing the most resilience. Tariff developments dominated headlines last week, but the market’s response was more subdued than during previous tariff announcements. The Trump administration announced a wave of new tariffs set to take effect August 1st, including a 50% tariff on copper.1 In total, tariffs ranging from 20% to 50% have been announced on goods from more than 20 countries.1 Some nations, like Vietnam and the United Kingdom, have already reached agreements and now face lower tariff rates. Meanwhile, President Trump is threatening a 50% tariff on Brazilian goods unless legal proceedings against former President Bolsonaro are halted — which could result in a $21 billion annual tax based on last year’s $42 billion in imports.1 Ongoing legal battles over whether the President can impose these tariffs without congressional approval continue to add uncertainty to the market.
2. Labor Market Remains Resilient Amid Policy Uncertainty
New claims for unemployment insurance fell again last week and remain low, suggesting that companies are still hesitant to lay off workers. However, continuing claims, which track the number of people receiving ongoing benefits, have continued to rise and have reached nearly two million, the highest level since late 2021.1 This data points to cautious hiring by corporations and may reflect uncertainty about trade policy and the broader economic outlook. The Federal Reserve is also navigating this uncertainty; the minutes released from its June meeting show that most members prefer to wait and see how trade developments will affect the economy before making any policy changes.2 As a result, an interest rate cut at the late July meeting appears unlikely. A move in September, however, remains possible, depending on how inflation and labor market data evolve over the summer. Investors continue to monitor economic data for any signals that may influence the Fed’s upcoming interest rate decisions.
3. Weaker Dollar Drives Strong International Performance in 2025
Developed international markets have delivered strong gains this year, up 19.2% year-to-date as of Friday, July 11th.3 A key factor behind this performance is the sharp drop in the U.S. dollar, which fell nearly 11% in the first half of 2025. This decline in value represents the dollar’s worst start to a year since currencies began trading freely in the early 1970s.3 The weaker dollar has boosted international returns for U.S. investors and, in our opinion, has made diversifying portfolios internationally even more attractive, although it also means higher import costs at home.
For the period ending 7/11/25.
* Small-cap stocks are represented by the Russell 2000® Index. International stocks are represented by the MSCI EAFE. Bonds are represented by the Bloomberg US Aggregate Bond Index. Oil is represented by WTI Oil (West Texas Intermediate Oil), a benchmark for light, sweet crude oil and a primary measure for pricing oil contracts and futures in the U.S.
Sources
1 Bloomberg
2 U.S. Federal Reserve Bank
3 FactSet
Disclosures
Cary Street Partners is the trade name used by Cary Street Partners LLC, Member FINRA/SIPC; Cary Street Partners Investment Advisory LLC and Cary Street Partners Asset Management LLC, registered investment advisers. Registration does not imply a certain level of skill or training.
Any opinions expressed here are those of the authors, and such statements or opinions do not necessarily represent the opinions of Cary Street Partners. These are statements of judgment as of a certain date and are subject to future change without notice. Future predictions are subject to certain risks and uncertainties, which could cause actual results to differ from those currently anticipated or projected.
These materials are furnished for informational and illustrative purposes only, to provide investors with an update on financial market conditions. The description of certain aspects of the market herein is a condensed summary only. Materials have been compiled from sources believed to be reliable; however, Cary Street Partners does not guarantee the accuracy or completeness of the information presented. Such information is not intended to be complete or to constitute all the information necessary to evaluate adequately the consequences of investing in any securities, financial instruments, or strategies described herein.
Cary Street Partners and its affiliates are broker-dealers and registered investment advisers and do not provide tax or legal advice; no one should act upon any tax or legal information contained herein without consulting a tax professional or an attorney.
We undertake no duty or obligation to publicly update or revise the information contained in these materials. In addition, information related to past performance, while helpful as an evaluative tool, is not necessarily indicative of future results, the achievement of which cannot be assured. You should not view the past performance of securities, or information about the market, as indicative of future results.
Additional Disclosures: International and Foreign Securities, Fixed Income Investments, the Consumer Price Index, the Producer Price Index.
Comparative Index Descriptions: The Standard & Poor’s (S&P) 500 Index, The Russell 200® Index, The NASDAQ Composite Index, The MSCI EAFE Index, Dow Jones Industrial Average® (Dow Jones or DJIA), The Bloomberg Barclays US Aggregate Bond Index (US Agg Bond), The CBOE Volatility Index (VIX). CSP2025061_17
