New York Stock Exchange digesting ‘tariff shock’... Inflation and earnings to determine direction [Weekly Outlook on the New York Stock Exchange]

Barclays: "Punitive tariffs will put optimism to the test"

Focus on inflation ahead of June CPI and PPI releases

Start of corporate earnings season... Will 'tariff shock' be a game changer?

This week, earnings releases lined up from Citigroup, JPMorgan Chase, Netflix, etc.

This week, the New York Stock Exchange is expected to focus on the aftermath of the high tariffs imposed by the United States on the European Union (EU) and Mexico, inflation indicators for June, and companies’ Q2 earnings reports.

The uncertainty due to tariffs is expected to remain a major factor determining investor sentiment this week. Last week, U.S. President Donald Trump announced high tariff rates on Canada and Brazil following Korea and Japan, and over the weekend approved tariffs on both the EU and Mexico. With this, the reciprocal tariff policy has been made public for most key trading partners.

Meanwhile, on the 15th (local time), the June Consumer Price Index (CPI) and on the 16th, the Producer Price Index (PPI) will be released. Since President Trump intensified reciprocal tariffs in April, prices have remained stable, but concerns are rising that inflation could be triggered at any moment.

In a recent report, Barclays noted, "The impact of tariffs on future growth and inflation remains uncertain," and added, "As more 'punitive tariffs' like the 50% tariff on Brazil are added, optimism may be increasingly put to the test."

The corporate Q2 earnings season, which begins in earnest this week, is another indicator to gauge the impact of tariffs. On the 15th, Citigroup, Wells Fargo, and JPMorgan Chase will announce their results, followed by United Airlines, Morgan Stanley, and Goldman Sachs on the 16th, and Netflix on the 17th.

According to financial information provider FactSet, the Q2 net profit growth rate of S&P 500 companies is expected to be 4.6% year-on-year—the lowest level since Q4 2023.

Reporter Im Da-yeon allopen@hankyung.com