inflation figures, consumer confidence, and corporate earnings will be published. Additionally, the first estimate of the second-quarter GDP will be released, providing insight into the overall health of the economy. The Federal Reserve will also announce whether it will cut interest rates further or hold steady, a decision influenced by current economic conditions and inflation trends.

Trade policies remain a focal point. Trump’s self-imposed deadline to settle tariffs with over 200 trading partners is approaching, and negotiations with China are ongoing in Sweden. An appeals court will also review whether the legality of Trump’s tariffs is justified, potentially influencing future trade strategies. The tariffs, currently averaging 18%, significantly impact costs for American consumers and businesses, with concerns that higher rates could trigger economic slowdown.

Corporate earnings from top tech giants like Microsoft, Meta, Amazon, and Apple are expected to set the tone for market sentiment. So far, about 80% of S&P 500 companies reporting have surpassed earnings estimates, fueling market optimism. This has encouraged Trump to emphasize trade deals and tariff policies, believing the markets respond positively to tariffs, despite concerns about overvaluation.

Consumer confidence, measured by the Conference Board, has fallen to pandemic lows due to fears about rising prices, although there’s cautious optimism as some trade agreements progress. Meanwhile, consumer sentiment from the University of Michigan shows ongoing wariness about inflation, which can curb spending, considering that consumer spending drives two-thirds of the U.S. economy.

The Q2 GDP is expected to improve, partly due to inventory adjustments following the first quarter’s decline, but analysts warn that distorted data from stockpiling in anticipation of tariffs might give a misleadingly positive picture. The economy remains resilient and has supported consistent job creation, but signs of weakness are emerging, especially with recent drops in manufacturing employment and longer unemployment durations, possibly tied to anti-immigrant policies and tariffs.

The Fed’s decision to hold interest rates steady reflects the cautious stance, with some officials dissenting. Although rate cuts are anticipated later this year, inflation creeping above the Fed’s 2% target, partly due to tariffs and depleted inventories, remains a concern. Overall, the coming week will be pivotal in understanding whether the U.S. economy can withstand the turbulent trade environment and policy shifts under Trump. (CNN)