The S&P 500 experienced a decline on Monday, as market participants anticipated significant inflation data set to be released later in the week and processed the implications of President Donald Trump’s decision to extend the deadline for China tariffs by 90 days. At 4:00 p.m. ET (20:00 GMT), the market experienced a decline of 199 points, representing a decrease of 0.5%, while the index recorded a drop of 0.2%, and another index fell by 0.3%.
Reports indicate that Trump has signed an executive order which extends the deadline for tariffs on China by an additional 90 days, now set to expire on November 9. The extension arrives merely one day prior to the original deadline of August 12, yet it guarantees that the ambiguity surrounding U.S.-China trade relations continues to dominate discussions. In other geopolitical developments, Trump is scheduled to engage with Russia’s Vladimir Putin in Alaska on August 15. This marks the inaugural face-to-face summit between a sitting U.S. president and his Russian counterpart since Joe Biden’s meeting with Putin in June 2021, aimed at addressing the ongoing conflict in Ukraine.
The tech-heavy Nasdaq Composite reached a new intraday peak on Friday, while the broader S&P 500 index concluded the day slightly below an all-time closing high. This optimistic outlook will be scrutinized in light of significant economic indicators this week, particularly with the anticipated release of U.S. consumer price data for July on Tuesday. A distinct measure of producer prices for final demand is set to be released on Thursday, while indicators of American retail sales and a consumer sentiment survey are anticipated to be published on Friday.
The disappointing July jobs report released at the beginning of the month, which featured a significant downward revision of the figures for June and May, has heightened anticipations that the Federal Reserve will lower interest rates in the upcoming month. In conjunction with the labor market, inflation constitutes a vital component of the Federal Reserve’s dual mandate, persisting at levels that are persistently above the Fed’s established target of 2%. Furthermore, the tariffs implemented by the Trump administration on imports from various trading partners are anticipated to elevate domestic prices. Analysts at ING noted, “Consensus is expecting another acceleration in core CPI, to 0.3% month-on-month (3.0% year-on-year), in this week’s July print.” “That is a number that can probably be seen as acceptable for the Federal Reserve to proceed with a September cut, given the backdrop of a significantly weaker jobs market.”
The earnings slate is largely devoid of significant announcements on Monday; however, Micron Technology experienced a stock increase following the memory chipmaker’s upward revision of its fourth quarter fiscal 2025 guidance, attributing this positive adjustment to enhanced pricing and robust operational execution. Nvidia and Advanced Micro Devices are currently under scrutiny due to media reports indicating that both chipmakers are expected to remit 15% of their profits derived from the sale of artificial intelligence technologies to China to the U.S. government. Shares of C3.ai experienced a significant decline following the release of a preliminary earnings announcement that fell short of expectations for the enterprise AI application software group.