The US economy has so far dodged any major impact from the frequently shifting tariff policies. That could change if nations fall back into a cycle of retaliatory tariffs and companies pass along more of the higher costs to consumers.
The US government shutdown has put a halt to the usual economic updates on inflation, consumer spending and employment. That has made it more difficult for investors and economists to continue gauging the economic impact from tariffs. Wall Street is looking toward the latest round of company earnings and forecasts to get a better sense of the broader economic picture.
Loading
Banks were the first big sector to kick off the earnings season, and the results hint at Wall Street notching one of its most profitable quarters ever. Still, executives from major banks expressed various degrees of caution about markets and the economy. JPMorgan Chase slipped 1.9 per cent, Wells Fargo rose 7.2 per cent and Citigroup rose 3.9 per cent.
Industrial firms and retailers were among the other companies making some of the biggest gains. Caterpillar rose 4.5 per cent and Walmart rose 5 per cent.
A lack of updates about the US economy has also left the Federal Reserve without much of the information it uses to make policy decisions. The central bank cut its benchmark interest rate by a quarter of a percentage point in September amid worries that unemployment could worsen. That marked its first cut of the year and Wall Street expects similar cuts at the Fed’s meetings in October and December.
Lapses in data about employment and inflation makes it more difficult for the central bank to balance its tasks of both helping to maintain strong employment while keeping prices stable. On Tuesday, Fed Chair Jerome Powell again signalled that the Fed is slightly more worried about the job market.
While he conceded that economic activity was on a “somewhat firmer trajectory than expected,” Powell stressed at a speech in Philadephia that “the downside risks to employment appear to have risen.”
That suggests the central bank is likely to proceed with additional cuts at its two remaining meetings this year, one late October and another in December.
Gold rose 0.8 per cent and remains above $US4,100 per ounce. The precious metal has soared 57 per cent in 2025 amid a long list of uncertainties, including tariffs and the economy.
