Five things to watch in markets in the week ahead

Investing.com - The July 9 expiration of U.S. President Donald Trump’s delay to his punishing "reciprocal" tariffs is set to be the key event for investors this week. Trump suggests that the U.S. is close to finalizing more deals with several trading partners and would send out letters to others outlining their new tariff rate. Elsewhere, minutes from the Federal Reserve’s June meeting are due out, while Delta Air Lines (NYSE:DAL) is expected to report its latest results.

1. Trump’s tariffs

Trump has said that the White House will begin to send out letters to U.S trading partners outlining their new tariff rates, although some confusion has surrounded when the levies would come into effect.

A pause to Trump’s heightened reciprocal tariffs is set to end on July 9, but media reports have suggested that rates may not kick in until August 1.

Asked about these dates by reporters, Trump said he thinks "we’ll have most countries done by July 9 [...] either a letter or a deal." Commerce Secretary Howard Lutnick, who was standing next to Trump, added that the tariffs "go into effect August 1, but the president is setting the rates and the deals right now."

Since the onset of the 90-day pause in April, the Trump administration has been carrying out talks over individualized trade agreements with a host of nations. The discussions have so far yielded preliminary deals with the United Kingdom (TADAWUL:4280) and Vietnam, as well as a trade truce with China.

"[F]or the rest, it is a question of whether last-minute deals are struck, whether tariffs are substantially increased or whether fresh extensions are announced. All seem possible," analysts at ING said in a note.

While many nations now seemingly have a three-week reprieve from additional duties that could rise from a baseline 10% to as high as 50%, Trump has mentioned that the rates could reach 60% or 70%. The statements may extend what has become a common source of worry for businesses in recent months: uncertainty.

2. FOMC minutes

The Federal Reserve will release minutes from its latest policy meeting on Wendesday, with investors keen for more insight into how policymakers see interest rates evolving over the rest of the year.

At its gathering in June, the U.S. central bank chose to leave borrowing costs unchanged at a target range of 4.25% to 4.5%, arguing that a wait-and-see approach continued to be appropriate as more clarity emerged around the impact of Trump’s tariffs on the broader economy.

Fed Chair Jerome Powell later reiterated this stance during a Congressional testimony, although he stated at an event last week that the central bank could once again draw down rates at its remaining meetings this year. Crucially, analysts noted that this would include the Fed’s next meeting this month.

Powell’s future, meanwhile, has become a focal point for markets. Trump has been a frequent critic of Powell, questioning his leadership and calling for the Fed to move quicker to bring down rates. Media reports have suggested that Trump is mulling over revealing his successor to Powell later this year, a move which could create a so-called "shadow" Fed leader.

3. Delta Air Lines to report

Delta Air Lines is due to be one of the few major earnings reports this week, along with packaged foods group Conagra Brands (NYSE:CAG) and jeans-maker Levi Strauss (NYSE:LEVI).

Investors may be curious to hear how Delta sees the demand environment evolving over the coming months, especially as uncertainty around the wider economy has threatened to dent consumer spending on pricier services like air travel. In April, Delta withdrew its financial forecast for 2025 and unveiled a second-quarter projection which underwhelmed Wall Street expectations.

Still, data has indicated that many travellers are continuing to hunt for deals for international journeys during the busy summer travel season, although demand from foreigners for trips to the U.S. has slipped amid stricter border controls and a backlash to Trump’s policies.

Earlier this year, Delta warned that potential Trump administration levies on imported airplanes and parts could force it to stop buying jets manufactured overseas and scrap flights that serve roughly 10 million customers a year. The company has also said it would defer aircraft orders which faced tariffs.

4. Amazon (NASDAQ:AMZN)’s Prime Day

Amazon is due to hold an expanded annual Prime Day sales event this week, as the e-commerce behemoth looks to entice shoppers wary of spending big during a time of tariff-driven murkiness in the economy.

The firm’s "Prime Day" drive is set to begin on July 8 and last until July 11, two days longer than it has been in prior years. Executives said the extension was due to Prime members saying they needed more time to shop for deals.

During Amazon’s previous Prime Day in July 2024, American consumers spent $14.2 billion, or a jump of 11% year-over-year, according to figures from Adobe (NASDAQ:ADBE) Analytics cited by Reuters. But Prime Day has faced intensifying pressure from similar sales events from rivals like Walmart (NYSE:WMT), Target (NYSE:TGT) and, more recently, ByteDance’s TikTok Shop.

Competition to draw in younger buyers keen to snap up back-to-school and back-to-college merchandise at cheaper prices has been especially fierce. Amazon’s Prime service has even offered a discounted subscription rate and other perks to people aged 18 to 24.

5. Netanyahu visits Trump

Israeli Prime Minister Bejamin Netanyahu is scheduled to meet with Trump in Washington this week, with reports swirling around talks regarding a ceasefire with Palestinian militant group Hamas.

It will be the third time Netanyahu, a frequent backer of Trump, has visited the president since his return to power in January.

Trump has hinted at a possible deal to secure a ceasefire and the release of Israeli hostages still in Gaza "during the week."

Prior to leaving for the U.S., Netanyahu said that Israeli negotiators taking part in ceasefire talks in Doha over the weekend were told to achieve a truce under the conditions that Israel has accepted. Netanyahu added that he believes "the discussion with President Trump can certainly help advance these results."