Dow Jones Awaits CPI Signal with Tariff Risk Clouding Fed Path

The Dow Jones (US30USD) rallied ~0.29% higher on Monday, having found support at the bottom of the current daily range, trading at around $44,471.

Dow 30 (DJIA): Key Takeaways From Monday’s Session

Having ended last week’s trading on a sour note, the Dow Jones has found support in Monday’s session and continues to trade in a period of consolidation

Markets now turn their gaze toward today’s CPI release, with the effect of previous tariffs on otherwise cooling inflation yet to be fully understood

Dow 30 (DJIA): Trade tariffs remain a significant macroeconomic headwind for US equities

In a return to regularly scheduled programming, trade tariffs and the associated renewal of commitments to negotiation deadlines remain one of, if not the largest, determining factors in US equity performance.

Recently offered a period of comparative respite, the Dow Jones has proven particularly vulnerable to trade-related news in recent memory, especially compared to tech-led US indices like the Nasdaq-100.

For now, the $1,000,000 question remains whether Trump will remain firm with his new deadline. Naturally, much of the success of Trump’s current strong-arm tactics on trade will be determined by whether other nations believe this will be their last chance to strike a deal, or whether ongoing negotiations will allow for an extension in the deadline, not for the first time.

At the time of writing, the EU and Mexico are the latest to be caught in Trump’s crosshairs. On Saturday, Trump announced that a 30% tariff would be imposed if an agreement isn’t reached before August 1st.

With the so-called ‘Liberation Day’ sell-off still fresh in the collective mind, Trump will need to carefully navigate the next twenty days or risk inviting downside to otherwise buoyant stock market.

The markets remain primarily concerned about how tariffs could affect inflation and, therefore, the Federal Reserve’s monetary policy decisions, alongside how changes in trade relations will affect economic performance.

If put in one word, any increase in market uncertainty will harm risk appetite, which will likely bode poorly for US equities and other risk-on markets.

TradingView, 14/07/2025

Dow 30 (DJIA): Tuesday’s CPI Report Remains Key Focus Ahead of Fed Rate Decision

While at least ‘a couple’ of policymakers were shown to be at least considering rate cuts courtesy of last week’s FOMC minutes, a July rate cut remains overwhelmingly unlikely.

That said, markets keenly await CPI release to confirm whether inflation is continuing to cool and whether previous Trump tariffs will have any adverse consequences on the data.

If inflation continues to cool, pressure will continue to mount on the Fed, which, by all accounts, will have a harder time justifying higher rates in the short term.

The above goes double as this month’s PCE report falls on July 31st, meaning that the CPI report will be the last to offer any data on inflation before the Federal Reserve’s July 30th decision.

Naturally, any inclination that a potential rate cut may come sooner than expected, July or otherwise, will likely offer some buying support for US equities, the Dow Jones included.

As can be expected, US equity markets are relatively flat on Monday ahead of today’s CPI report.

Upcoming US Events (Tuesday, 15th 2025):

• 08:30 EDT US Consumer Price Index June (MoM)
• 08:30 EDT US Consumer Price Index June (YoY)
• 08:30 EDT US Consumer Price Index Core s.a. June
• 08:30 EDT US Consumer Price Index n.s.a. June (MoM)
• 08:30 EDT US Consumer Price Index ex. Food & Energy June (MoM)
• 08:30 EDT US Consumer Price Index ex. Food & Energy June (YoY)
• 08:30 EDT US NY Empire State Manufacturing Index (Jul)
• 08:55 EDT Redbook Index (YoY)
• 09:15 EDT Fed’s Bowman speech
• 12:15 EDT Fed’s Barr speech
• 14:45 EDT Fed’s Collins speech
• 16:30 EDT API Weekly Crude Oil Stock
• 19:45 EDT Fed’s Logan speech

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