| No images? Click here   By Sabrina Escobar | Friday, July 11 Record Scratch. Tariff fears finally caught up to stocks, snuffing out the S&P 500's and Nasdaq Composite's record-breaking streak. All week, the White House has been sending out letters to trading partners with newly set tariff rates, which range as high as 50%. Markets largely shrugged them off and two of the three major indexes hit new highs. But threatening Canada, one of the U.S.'s closest trade partners, with a 35% tariff rate seems to be one step too far. Investors also weren't loving President Donald Trump's late Thursday announcement that countries that hadn't received any letters could face tariff rates of 15% to 20%, a higher rate than the current 10% benchmark on goods. The Nasdaq shed 0.2% on Friday, the Dow Jones Industrial Average was off 0.6%, and the S&P 500 closed 0.3% lower, with 390 of the benchmark index's stocks closing in the red. All three indexes closed the week in negative territory, snapping a three-week winning streak for the Nasdaq and the Dow, and a two-week winning streak for the S&P. To be sure, the slide is nowhere near as bad as it was earlier this year, when Trump first unveiled his so-called reciprocal tariffs. The new levies' on-again, off-again nature have made many investors skeptical about taking each announcement at face value, betting that the president will walk back his most drastic announcements. But as Friday's pullback suggests, even counting on the TACO trade (Trump Always Chickens Out) doesn't completely insulate investors from some degree of tariff-related market volatility. Fluctuations are likely to continue until deals get finalized -- something trade experts say will take a while. The upside in all of this is that equities have proven time and again their ability to bounce back from the tariff drama. Second-quarter earnings season, which starts next week, may prove pivotal toward determining whether the current rally can pick up steam again. Mark Hackett, chief market strategist at Nationwide, writes:
The slew of economic data releases scheduled to be released next week, including June's inflation and retail sales reports, could also help fuel -- or cool -- the market's rally. A two-day weekend hardly seems like enough time to prepare.  DJIA: -0.63% to 44,371.51 The Hot Stock: Halliburton +4.2% Best Sector: Energy +0.5%    This Week's Cover  The CalendarFastenal reports second-quarter earnings on Monday. Financials make up half of the 38 S&P 500 companies slated to report quarterly results next week, including nine of the 10 largest banks by asset. Citigroup, JPMorgan Chase, and Wells Fargo release earnings on Tuesday, followed by Bank of America, Goldman Sachs Group, and Morgan Stanley on Wednesday. U.S. Bancorp announces results on Thursday, and America Express and Charles Schwab close out the week, reporting earnings on Friday. Outside the financial sector, other megacap companies reporting next week include Johnson & Johnson on Wednesday, and GE Aerospace and Netflix on Thursday. The key economic release of the week will be the consumer price index for June, released on Tuesday by the Bureau of Labor Statistics. The BLS also releases the producer price index on Wednesday, while the Census Bureau reports retail sales data on Thursday and housing starts on Friday. --Dan Lam  What We're Reading Today
  Barron's Live returns on Monday. Todd Ahlsten, chief investment officer of Parnassus Investments and lead manager of Parnassus Core Equity Investor Fund (PRBLX), has been a member of the Barron's Roundtable since 2019. In this year's Midyear Roundtable, to be published July 11, Todd pounds the table for "Great American Companies" with durable franchises and wide-moat businesses. Barron's Senior Managing Editor Lauren R. Rublin and Deputy Editor Ben Levisohn speak with Todd about his investment approach, economic outlook, and favorite stocks. Sign up here.
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