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US stock investors shrug off Trump's latest tariff plans

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Analysts pared forecasts for profits in June quarter

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Earnings coming up from big US banks, Netflix ( NFLX ), 3M ( MMM ), J&J

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US consumer price data due Tuesday, retail sales Thursday

By Lewis Krauskopf

NEW YORK, July 11 (Reuters) - A rally that has taken

U.S. stocks to record highs will be tested in the coming week by

the kick-off of corporate earnings season and a key inflation

report as investors hope to learn more about the economic

fallout from tariffs.

The S&P 500 is little changed so far this week, but the

benchmark stock index has surged 26% since April to all-time

high levels.

Stocks this week largely shrugged off President Donald Trump's

threats of more aggressive tariffs on over 20 countries set to

take effect August 1. Trump also announced plans for higher

levies on copper, pharmaceuticals and semiconductors.

"Investors are looking toward the end of the year into next

year where fundamentals are better, and they are willing to look

through some short-term uncertainty as they get there," said

Chris Fasciano, chief market strategist at Commonwealth

Financial Network.

After a strong first-quarter reporting season helped lift

stocks, analyst estimates for second-quarter results have

weakened. S&P 500 companies are expected to have increased

profits by 5.8% from the year-earlier period, down from an

expectation of a 10.2% gain on April 1, according to LSEG IBES.

The percentage of S&P 500 companies beating consensus

estimates rose to 78% in the first quarter after the rate had

declined the prior three quarters, Ned Davis Research analysts

said.

"Another reading in the upper 70s would suggest that

companies have a grasp not only on tariffs, but also on the

broader macro environment," the Ned Davis analysts said in a

note.

Reports from banks will dominate the week, including results

from JPMorgan Chase ( JPM ), Bank of America ( BAC ) and Goldman

Sachs ( GS ). Among the other major companies reporting next

week are Netflix ( NFLX ), Johnson & Johnson ( JNJ ) and 3M ( MMM )

.

In focus will be whether executives indicate if they are

able to forecast and make decisions in areas such as capital

investment and hiring despite the still-shifting trade backdrop,

Fasciano said.

"The uncertainty hasn't gone away, but I'm curious to see

how much of the uncertainty they feel they have a better

understanding of in terms of longer-term plans," Fasciano said.

The impact of tariffs will also be at issue with the

consumer price index for June, due on Tuesday, which will shed

light on inflation trends. CPI is expected to increase 0.3% on a

monthly basis, an acceleration from the prior month, according

to economists polled by Reuters. A busy week of economic data

will also be highlighted by monthly retail sales on Thursday.

Investors are eager for the Federal Reserve to resume

interest rate cuts, but central bank officials have cited

worries that tariffs will drive inflation higher as reasons for

holding off on changing monetary policy.

The S&P 500 is up nearly 7% in 2025, just over halfway through

the year. In the latest sign of positive stock momentum, Nvidia

Corp ( NVDA ) this week became the first publicly traded company

to hit $4 trillion in market value, fueled by a massive run for

AI chipmaker's stock price.

Stocks have rebounded after plunging in April following

Trump's "Liberation Day" announcement of sweeping global

tariffs.

This past Wednesday was expected to be a key deadline,

marking the end of Trump's pause on many of the harsh

"reciprocal" tariffs he unveiled in April. This week, he

launched an array of levies, many scheduled to take effect on

August 1.

Still, most investors appear to be banking on the U.S. avoiding

higher tariff rates as Washington strikes deals in coming weeks

with trading partners such as Japan and South Korea, said

Anthony Saglimbene, chief market strategist at Ameriprise

Financial.

"That's what the market has built in," Saglimbene said. "If

we don't get that, then I think there is probably some risk that

we would see some higher near-term volatility if the White House

actually implements some of these aggressive tariff measures."

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