Stocks Stumble, Confidence Wanes, Tariffs Return

Every morning before the opening bell, the Schwab Market Update sets the stage for the day ahead, covering key market movers, economic developments, and emerging themes. Each edition includes "Three things to watch," and Thursdays feature a weekly section, "Crypto currents." This recap revisits select items for those who may have missed them, helping traders head into the weekend better informed.

While the S&P 500^® Index remains only 2.3% below its all-time closing high, short-term momentum has swung down after the index fell decidedly below its 50-day moving average last week. The 50-day remains the key technical area to watch for now. A sustained move back above that level—at 7,470 as of Friday—could help improve short-term momentum. Otherwise, the 100-day moving average, about 7,208 on Friday, should serve as a deeper support. Options positioning remains a key short-term swing factor. Implied volatility remains subdued despite elevated headline risks, suggesting market risk may be underpriced relative to geopolitical uncertainty, sector concentration, and mega-cap earnings dependence. Overall, the tech selloff has done limited damage to the index so far, thanks to rotation into sectors such as health care, real estate, and utilities. But those aren't the sectors you want leading a charge to new highs.

Consumers grew a bit gloomier again in July, extending a run of declining sentiment to a third straight month, according to the Conference Board's Consumer Confidence Index^®, released Tuesday. The headline index slipped to 90.8, below the Briefing.com consensus estimate of 92.1, from an upwardly revised 92.2 in June. The drop was driven by a more negative view of current conditions of business and job-market conditions. The short-term outlook remained unchanged. The net view of the job market—dubbed the labor differential—also slid again, primarily due to fewer people saying that jobs were plentiful. In fact, the labor differential fell to 3.1 in July. The index, monitored by economists as a gauge of labor market conditions, has never turned negative without an accompanying recession.

A new tariff plan took effect July 24 as the Trump administration's temporary 10% global tariff expired after 150 days. That earlier tariff was introduced in February after the Supreme Court invalidated the administration's original emergency-powers tariff strategy. The replacement tariffs are anchored by levies of 10% to 12.5% on imports from 60 economies that together account for roughly 99.4% of all U.S. imports. The new regime grew out of an investigation that concluded many U.S. trading partners had failed to adequately address issues of forced labor. Additional or higher duties may still emerge with other legal justifications; on July 20, Trump announced 50% tariffs on certain goods from Canada and has threatened Brazil and the EU with steeper tariffs under different rationales. The change is largely a shift in legal reasoning rather than in tariff levels and indicates how the administration has found new ways to keep tariffs in place as a cornerstone of Trump's economic policy. While the Supreme Court took away one justification, it did not ban tariffs as an approach.

Spot bitcoin ETPs mostly stopped bleeding funds in July, with inflows and outflows roughly cancelling each other out, resulting in net outflows of about $262 million as of Tuesday, according to Glassnode data. That's not exactly bullish, but it's the best month for spot bitcoin ETP flows since April and a marked improvement from June, which saw net outflows of $4.6 billion. No doubt that improvement, and a softer June inflation print, helped support bitcoin's price during the month. It rose as much as 14% before giving up some of that ground over the past week or so. Still, the market remains rangebound during an extended period consolidation. Any attempt to break out of that range and challenge overhead resistance will likely take more traders and investors jumping into the market.

June new home sales rose 1.6% month over month to 628,000, topping analysts' expectations of 620,000 but sagging 5.6% year over year. May sales numbers were revised higher to 618,000 from 580,000. The affordability question remains key but seems to be improving slightly. While the average selling price is just under half a million, at $475,400, this is down 9.5% from May 2026 and 6.5% below the average June 2025 price. The West was the most expensive region and (perhaps not coincidentally) saw the only drop in month-over-month sales—a notable retreat of 22.4%. Mortgage rates hovered near 6.5% in June, per Freddie Mac. Heading into the final week of July, this reading inched higher still, to 6.58%—the highest weekly average in almost a year.