The Strength of the Market is: Strong

Stocks dropped last week as investors weighed signs of a weakening economy and President Trump's tariffs. For the week, the S&P 500 dropped 2.4%, its worst weekly performance since May, the Dow Jones tumbled 2.9%, its worst week since April, and the Nasdaq lost 2.2%. With a weakening economy and labor market, it looks like the Federal Reserve will cut interest rates at their next meeting in September. Investors are, also, keeping a close eye on President Trump's updated tariffs - ranging from 10% and 41%, including an increase to Canada, going from 25% to 35%.

Economic reports from last week came back mixed:

•Manufacturing (Dallas) - higher than expectation

•Consumer Confidence - higher than expectation

•Consumer Sentiment - lower than expectation

•Job Openings - higher than expectation

•Employment (Private) - higher than expectation

•Employment (Total) - lower than expectation

•Gross Domestic Product - higher than expectation

•Single-Family Home Values - lower than expectation

•Pending Home Sales - lower than expectation

•Personal Income - higher than expectation

•Construction Spending - lower than expectation

•Jobless Claims - lower than expectation

This week, investors will look for guidance from economic reports like Vehicle Sales, Labor Productivity, Consumer Credit and Jobless Claims.