Five things to watch in the week ahead 

Investing.com - U.S. President Donald Trump’s announcement of tariffs on imports from Mexico and the European Union means that his volatile trade policies will remain in focus this week. Away from this, key inflation data will provide pointers for future Federal reserve action, while the new quarterly earnings season starts in earnest. The cryptocurrency market will be looking at Capitol Hill this week, while crude markets await a key statement from the U.S. president.

1. More Trump tariffs

Trump’s volatile trade policies will be in the spotlight this week once again after the U.S. president announced 30% tariffs on Mexico and the European Union over the weekend, with the increased tariffs set to take effect on August 1, 2025.

The EU and Mexico, both among the largest U.S. trading partners, responded by calling the tariffs unfair and disruptive while pledging to continue to negotiate with the U.S. for a broader trade deal before the deadline.

Trump announced new tariffs on a number of countries last week, including Japan, South Korea, Canada, and Brazil, along with a 50% tariff on copper.

Investors will be looking to see if the U.S. president seeks to penalize other countries this week, and will also be looking for any response from the affected regions, in particular the EU.

European Commission President Ursula von der Leyen said on Sunday that the EU will extend its suspension of countermeasures to U.S. tariffs until early August as it aims for a negotiated solution, but pressure is growing for a more substantial response.

"It is brazen and disrespectful to increase the tariffs on European goods announced on April 2 from 20% to 30%," said Bernd Lange, the head of the European Parliament’s trade committee, said in an interview with Reuters over the weekend.

"This is a slap in the face for the negotiations. This is no way to deal with a key trading partner," he added. "We have postponed the first stage of our countermeasures for the time being, but I am firmly convinced that they must now be implemented immediately," he said.

"The first list of countermeasures must be activated on Monday as planned, and the second list should also follow quickly."

2. June CPI release

The June U.S. consumer price index is due on Tuesday, and the widely-watched inflation reading will offer Wall Street clues on when the Federal Reserve may next cut interest rates.

The CPI is expected to show a monthly rise of 0.3% in June, a rise from the 0.1% increase in the prior month, while the annual release is seen climbing to 2.6%, from 2.4% in May.

Investors are eager for the Federal Reserve to resume interest rate cuts, but central bank officials have cited worries that tariffs will drive inflation higher as reasons for holding off on changing monetary policy.

Recent minutes from the Fed’s June meeting showed only "a couple" of officials said they felt interest rates could be reduced as soon as this month.

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%, and Fed fund futures indicate a slim chance of a rate cut at the end-July meeting, but suggest easing in September is likely.

3. Earnings season starts in earnest

The new U.S. corporate earnings season kicks off in earnest this week, with major banks, including JPMorgan Chase (NYSE:JPM), Bank of America (NYSE:BAC) and Wells Fargo (NYSE:WFC), leading the way.

Results are also due from the likes of Netflix (NASDAQ:NFLX), Johnson & Johnson (NYSE:JNJ) and 3M Company (NYSE:MMM).

Investors will be looking to see if executives make any comment about the impact of tariffs - whether they indicate if they are able to forecast and make decisions in areas such as capital investment and hiring given the still-shifting trade backdrop.

After a strong first-quarter reporting season, estimates for second-quarter results have weakened. S&P 500 companies are expected to have increased profits by 5.8% from the year-earlier period, down from an expectation of a 10.2% gain on April 1, according to LSEG IBES.

In Europe, STOXX 600 earnings are expected to fall 0.2% after last quarter’s 2.2% growth.

4. Bitcoin in demand in “Crypto Week”

Bitcoin, the world’s largest cryptocurrency, will be in the spotlight this week, buoyed by optimism over growing institutional adoption at the start of the highly anticipated "Crypto Week" in Washington.

The digital currency has been on a tear over the past week, climbing to a new record high Monday, fueled by strong ETF inflows and increasing hopes for more crypto-friendly regulation in the United States.

At 04:20 ET, Bitcoin rose 4% to $122,360, having climbed as high as $123,120 earlier in the session.

Investor sentiment has been propelled by expectations that the U.S. House of Representatives will debate several landmark crypto bills this week, including the Genius Act, Clarity Act, and the Anti‑CBDC Surveillance State Act.

If passed, these measures could establish comprehensive regulatory frameworks governing stablecoins, crypto asset custody, and the broader digital financial ecosystem.

These bills have the approval of Trump, who has called himself the "crypto president" and has urged policymakers to revamp rules in favor of the industry.

5. Crude awaits Trump’s “major statement”

The crude oil markets surged at the end of last week after Trump said he will deliver on Monday a “major statement” on Russia, prompting speculation that the U.S. president will agree to sanctions against the major oil producer.

Trump vowed during his election campaign to end Russia’s invasion of Ukraine, and has recently grown increasingly and publicly frustrated with Russian President Vladimir Putin over his reluctance to accept a ceasefire and the growing civilian death toll of Russian attacks.

A bipartisan U.S. bill that would hit Russia with sanctions has been gaining momentum in Congress, but it still lacks the presidential push it needs to get over the finish line.

The bill would levy extensive sanctions against various Russian individuals, government bodies and financial institutions. It would also punish other countries that trade with Moscow, imposing 500% tariffs on nations that buy Russian oil, gas, uranium and other exports.

(Reuters contributed reporting.)