Market Update: Summer Friday Trading

The market finally managed to finish positively on a summer Friday.

After a week filled with inflation data and earnings reports, trading sessions showed mixed results, with the market closing nearly unchanged.

The Nasdaq Composite increased by 0.1%, reaching new records and marking its 11th record close in 2025. Meanwhile, the S&P 500 remained steady overall, while the Dow Jones Industrial Average slipped by 0.3% or 142 points.

This week, the Nasdaq achieved five record closes, matching the S&P 500’s performance.

Political news was significant this week. President Donald Trump hinted at potentially dismissing Federal Reserve Chairman Jerome Powell but later backtracked on those comments on Wednesday. That same day, Trump sent letters to over 150 countries stating he had issued directives regarding tariffs.

“Despite ongoing uncertainty around tariffs, the market seems to be adapting to the situation,” noted Daniel Skelly, the head of Morgan Stanley’s Wealth Management Market Research & Strategy Team.

Investors closely examined remarks from Federal Reserve Governor Christopher Waller on Friday. He suggested that the central bank should consider interest rate cuts. Waller pointed out that while some improvement in employment figures in June came from government sources, private sector wages didn’t show the same level of progress.

Lowering interest rates could positively impact stocks, making funds more accessible for businesses, which in turn might stimulate growth in both the stock market and the economy. However, initiating cuts too early might reignite inflation, particularly against the backdrop of tariffs, which require U.S. companies to pay higher fees to import foreign goods.

Waller’s comments suggested that the Fed’s timing is critical. Thierry Withman from the Macquarie Group remarked, “The time to assess the situation is now.”

Looking ahead, next week will be busy for investors with multiple Treasury bill auctions lined up. It begins with 13 and 26-week bill auctions on Monday, followed by 6-week auctions on Tuesday. The Treasury is actively issuing bills to bolster cash reserves.

These shorter-term debts are popular on Wall Street, offering attractive yields around 4%. In the second quarter, investors added $16.7 billion to exchange-traded funds that focus on Treasury bills—more than double the amount from the same period last year.

Additionally, investors and economists will be reviewing ongoing unemployment claims scheduled for July 24th.