Expansion with Caution - What Moved Markets This Week

President Donald Trump extended the tariff truce with China for 90 days through an executive order, maintaining the current tariffs of 30% on Chinese products and 10% on US goods, with no changes to the terms of the agreement. The decision seeks to avoid an escalation in trade tensions and allow more time to advance negotiations.

In July 2025, inflation dynamics in the United States showed a mixed picture. The overall Consumer Price Index (CPI) rose 0.2% month-on-month, in line with projections and below the 0.3% increase recorded in June, which had been the highest in five months. However, the core CPI—which excludes food and energy—rebounded 0.3%, its largest increase since January, following 0.2% in the previous month. In annual terms, overall inflation remained at 2.7%, unchanged from June and below expectations (2.8%), while annual core inflation accelerated to 3.1%, its highest level in five months and above the consensus of 3%. On the wholesale inflation front, producer prices surprised with a 0.9% monthly increase—well above the expected 0.2%—driven mainly by a 1.1% increase in services, highlighting a 3.8% jump in wholesale margins for machinery and equipment. Underlying producer prices also rose 0.9%, the largest change since March 2022. In terms of consumption, retail sales grew 0.5%, in line with consensus, with solid performance in vehicle dealerships and parts (+1.6%) and furniture and household goods stores (+1.4%). In the industrial sector, production fell 0.1% month-on-month, falling short of expectations, while manufacturing rose just 0.1%. Consumer confidence, as measured by the University of Michigan, deteriorated to 58.6 points in August, its first decline in four months, affected by inflation concerns and a more negative perception of conditions for purchasing durable goods.

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