Markets

Stocks were slightly lower last week, while looking past news of fresh U.S. tariffs on nearly two dozen countries.

The Standard & Poor’s 500 Index fell 0.31 percent, while the Nasdaq Composite Index edged lower by 0.08 percent. The Dow Jones Industrial Average lost 1.02 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, slipped 0.43 percent.

Yet the ‘tech heavy’ Nasdaq continues to make gains. The amount of money that is being spent on AI, Data centers, etc, is only accelerating.

It’s not a stock market, it really is a market of stocks.^1,2

The Return of the Tariffs, sounds like a movie …The Return of ___

Stocks started the week lower after the White House posted letters to 14 countries announcing new tariffs, set to take effect August 1. They included 25 percent tariffs on South Korea and Japan.^3,4

Stocks dropped briefly midweek after the White House announced tariffs on seven additional countries. But as investors digested the news, markets gradually recovered, hoping the administration would dial back its steepest tariff rates again.

Markets also rallied on fresh AI trade enthusiasm and the latest Fed meeting minutes, which showed a majority of Committee members were open to adjusting interest rates later this year.^5,6

Markets opened higher on Thursday as investors shrugged off news of the 50 percent tariff on Brazil imports, announced shortly after Wednesday’s close. Momentum continued, and the S&P 500 and Nasdaq rose to fresh records.⁷

Then, after Thursday’s close, the White House announced the U.S. was raising tariffs on Canadian imports to 35 percent and was preparing some other tariffs. Markets opened lower on Friday and trended sideways during the trading session.

The T Word, Don’t say the T Word

While tariffs drove market headlines last week, another “t word” made news: trillion. More specifically, $4 trillion in market capitalization. The nation’s largest AI chip maker was the first company to breach that market cap level. It crossed the $4 trillion mark intraday on Wednesday, then closed above it for the first time on Thursday’s close.^8,9

So why does it matter when one stock hits such a milestone? For a market-cap weighted index like the S&P 500, a company valued at $4 trillion has an outsized effect on the overall index’s performance. The largest five companies in the S&P 500 comprise about one-third of the benchmark index.^10,11

1ST TRILLION → 11,012 DAYS

2ND TRILLION → +269 DAYS

3RD TRILLION → +103 DAYS

4TH TRILLION → +399 DAYS

5th TRILLION → ?

Significant tax law changes coming

With the recent passage of the One Big Beautiful Bill (OBBB), several significant tax law changes are now in effect for the 2025 tax year. To help you stay informed here a few key highlights you should be aware of:

1. Expanded Standard Deduction
   Starting in 2025, the standard deduction increases to:
   – $31,500 for joint filers
   – $23,625 for head of household
   – $15,750 for single filers
2. Enhanced Senior Deduction
   In addition, individuals ages 65 and older are now eligible for a new bonus deduction of $6,000 per person, potentially bringing a couple’s total deduction up to $46,700. This change could significantly reduce or even eliminate federal taxes on Social Security benefits for many retirees. The deduction phases out gradually for higher-income households.
3. Child Tax Credit Increased
   The Child Tax Credit has been raised to $2,200 per child, with both the maximum and refundable amounts indexed for inflation moving forward. While not as expansive as previous temporary increases, this remains a valuable planning tool for families with dependents.

If any of these changes impact your financial plan—whether you’re approaching retirement, supporting children or grandchildren, or thinking ahead to your legacy—please don’t hesitate to reach out. We’re happy to talk through how this new legislation may affect you and discuss any updates to your plan.