Well, well, well. Trump’s tariff party officially started at midnight, and surprise! Canada got an extra special invitation with tariffs jumping from 25% to 35%. Apparently, being one of only two countries to actually fight back (along with China) wasn’t the smartest diplomatic move. Who knew retaliation would lead to… more retaliation?
The “reciprocal tariffs” hit a bunch of other countries too – Switzerland got slapped with 39% (ouch), while places like Vietnam, Malaysia, and Thailand are dealing with around 20%. It’s like a global game of economic whack-a-mole, except everyone’s getting whacked.
Amazon’s Reality Check
But here’s the plot twist: markets barely blinked at the tariff news. Instead, they’re freaking out about Amazon’s earnings. Yeah, you read that right. AMZN had what most people would call a “huge quarter” – sales up 13% to $167.7 billion, operating earnings up 30%. But Wall Street is basically saying “meh” and the stock is down 7.6% in premarket.
Why? Because AWS (their cloud business) is showing signs of being mortal. Growth was only 17.5% versus 17% last quarter – not exactly the acceleration investors were hoping for. Plus, margins dropped from 35.5% to 32.9%. When you’re used to printing money, even slightly less money printing feels like failure.
Apple Plays the Hits
Meanwhile, Apple did what Apple does – sold a bunch of iPhones (up 13% to $44.6 billion) and made everyone happy. Services revenue hit $27.4 billion, and suddenly AAPL is up 3.3% premarket. It’s almost like having a simple, profitable business model works. Wild concept.
The irony? Amazon beat earnings estimates by 26% and is falling, while Apple’s more modest beat has everyone cheering. Markets are weird like that.
The AI Arms Race Continues
Microsoft and Meta are basically in an AI spending contest at this point. Microsoft’s Azure cloud grew 39% (take that, Amazon), while Meta is throwing so much money at AI that they raised their spending range to $66-$72 billion. Zuckerberg is building what he calls “personal superintelligence,” which sounds either amazing or terrifying depending on your sci-fi preferences.
The Fed’s Inflation Cover Story
Oh, and inflation ticked up to 2.6% in June, giving Fed Chair Powell the perfect excuse to keep rates where they are. “See? Inflation!” he can say while Trump tweets angrily in the background. It’s like having a hall pass when you’re late to class.
What’s Next?
The VIX (aka the “fear index”) is having a moment this morning. Mix together some hit-or-miss tech earnings, new tariffs, and general economic uncertainty, and you get a recipe for volatility. The S&P 500 hit new highs recently but is now backing off like someone who just realized they’re at the wrong party.
Here’s the thing: if these tariffs don’t actually make prices go crazy (and so far, they haven’t), the Fed might actually have to cut rates. Two Fed governors already dissented this week calling for cuts – the first time in over 30 years that two members went rogue like that.
Bottom line? We’re in for a bumpy ride. Amazon’s stumble might be the canary in the coal mine, or it might just be a speed bump. Either way, buckle up – Nvidia reports at the end of the month, and that’s when we’ll really see if this AI party is still going strong or if someone’s about to turn on the lights.