U.S. stocks finished mixed Friday, with the S&P 500 closing virtually unchanged, as renewed fears of a trade war with Europe weighed on sentiment. Despite the flat finish, the index still posted a weekly gain.

At the closing bell, the Dow Jones Industrial Average slipped 142 points, or 0.3%, the S&P 500 was nearly unchanged, and the NASDAQ Composite edged up 0.1%.

Market jitters were stoked by a Financial Times report that President Trump is weighing new tariffs of 15% to 20% on European Union imports, surpassing the 10% rate the EU has been negotiating for—suggesting talks may have stalled. With an August 1 deadline looming, the proposed levy appears aimed at pressuring the EU into deeper trade concessions.

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Earnings Season Rolls On

Investors also continued to digest a fresh wave of second-quarter earnings, which have largely surprised to the upside:

• American Express (AXP) rose after topping earnings expectations, buoyed by strong spending from its affluent cardholders.
• 3M (MMM) rallied after the industrial giant raised its full-year profit outlook, citing successful cost-cutting and a focus on higher-margin products.
• Charles Schwab (SCHW) gained on robust earnings driven by rising client assets and improved interest margins.
• Netflix (NFLX) reported solid results and raised its revenue outlook, but shares dipped as the numbers fell short of lofty analyst expectations. Still, Netflix stock has climbed over 43% this year, fueled by optimism about its dominance in the streaming space.

Looking ahead, more big names are set to report next week, including Coca-Cola (KO), Texas Instruments (TXN), Alphabet (GOOGL) and Tesla (TSLA).

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Consumer Sentiment Improves as Inflation Expectations Ease

The University of Michigan’s consumer sentiment index climbed to 61.8, topping forecasts of 61.5. Notably, one-year inflation expectations dropped to 4.4% from 5.0%, suggesting cooling price pressures.

Recent economic data also painted a resilient picture: retail sales beat expectations, jobless claims fell, and inflation remained mostly in line with forecasts—though tariffs have begun to nudge up prices in certain areas.

Despite that, the Federal Reserve remains cautious. While Fed Chair Jerome Powell maintains a “wait-and-see” stance on rate policy, Fed Governor Christopher Waller said Thursday a rate cut at the next meeting could be justified, citing mounting economic risks.

Waller also noted that tariff-driven inflation is likely transitory and should not alter the Fed’s broader outlook.

Meanwhile, pressure continues to mount on the central bank, with President Trump urging faster action to lower borrowing costs and support the economy.

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