US stocks retreated from record peaks and finished lower after a sluggish week that was light on news and trading volume.
After the barrage of earnings and economic reports the previous week, this week’s comparatively empty economic calendar heightened attention on the few major datapoints that surfaced. The US trade deficit narrowed considerably in June, implying that economic growth was better than expected. Activity in the services sector picked up, and solid trade data from China and Germany suggested two of the world’s biggest exporters are also doing better.
Despite these promising bits of news, the Dow Jones Industrial Average closed the week 232.85 points, or 1.49 percent, lower at 15,425.51, while the broad-based S&P 500 fell 18.25 points, or 1.07 percent, to 1,691.42. Both the Dow and S&P 500 finished at record highs the previous week.
The tech-rich NADAQ Composite Index retreated 29.48 points, or 0.8 percent, to 3,660.11.
Analysts described the drop as unsurprising given the market’s impressive rise this year. The S&P 500 has risen about 19 percent this year. Some see profit-taking at work.
Rockwell Global Capital chief market economist Peter Cardillo described the week’s losses as “a normal pullback on light volume, and light volume tends to exaggerate movements.”
“It was a bit of a rough week... but not really all that negative,” Cardillo said. “It certainly doesn’t indicate that we’re about to tumble.”
“It’s certainly disturbing to see the markets drop,” said Jack Ablin, executive vice president and chief investment officer at BMO Private Bank. “But at the same time, there’s such light volume that it’s really hard to know what the direction of the market is.”
Analysts cited comments from several US Federal Reserve officials that pointed toward a possible move to scale back the central bank’s aggressive bond-buying program next month. These included remarks from Chicago Fed President Charles Evans, who is regarded as a dove on monetary policy.
The Fed comments “spooked the market,” said William Lynch, director of investment at Hinsdale Associates, adding that the market had been expecting the Fed to taper the program at the end of the year.
The threat of a taper nex tmonth is “probably the biggest thing overhanging the market right now,” Ablin said.
Nine of 10 sectors in the S&P 500 saw declines last week. The exception was materials, which includes companies like miner Freeport-McMoRan Copper & Gold and chemical titan Dow Chemical that benefit from a more bullish outlook on China. One of the biggest sectoral losers for the week was financials, following news that indicated large banks still face considerable regulatory costs from the housing bust.
The US Department of Justice on Tuesday filed suit against Bank of America alleging it defrauded investors in the sale of mortgage-backed securities.
WEAKER ACTIVITY: The sharpest deterioration was seen in the electronics and optical components sector, with the production index falling 13.2 points to 44.5 Taiwan’s manufacturing sector last month contracted for a second consecutive month, with the purchasing managers’ index (PMI) slipping to 48, reflecting ongoing caution over trade uncertainties, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. The decline reflects growing caution among companies amid uncertainty surrounding US tariffs, semiconductor duties and automotive import levies, and it is also likely linked to fading front-loading activity, CIER president Lien Hsien-ming (連賢明) said. “Some clients have started shifting orders to Southeast Asian countries where tariff regimes are already clear,” Lien told a news conference. Firms across the supply chain are also lowering stock levels to mitigate
Six Taiwanese companies, including contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), made the 2025 Fortune Global 500 list of the world’s largest firms by revenue. In a report published by New York-based Fortune magazine on Tuesday, Hon Hai Precision Industry Co (鴻海精密), also known as Foxconn Technology Group (富士康科技集團), ranked highest among Taiwanese firms, placing 28th with revenue of US$213.69 billion. Up 60 spots from last year, TSMC rose to No. 126 with US$90.16 billion in revenue, followed by Quanta Computer Inc (廣達) at 348th, Pegatron Corp (和碩) at 461st, CPC Corp, Taiwan (台灣中油) at 494th and Wistron Corp (緯創) at
IN THE AIR: While most companies said they were committed to North American operations, some added that production and costs would depend on the outcome of a US trade probe Leading local contract electronics makers Wistron Corp (緯創), Quanta Computer Inc (廣達), Inventec Corp (英業達) and Compal Electronics Inc (仁寶) are to maintain their North American expansion plans, despite Washington’s 20 percent tariff on Taiwanese goods. Wistron said it has long maintained a presence in the US, while distributing production across Taiwan, North America, Southeast Asia and Europe. The company is in talks with customers to align capacity with their site preferences, a company official told the Taipei Times by telephone on Friday. The company is still in talks with clients over who would bear the tariff costs, with the outcome pending further
NEGOTIATIONS: Semiconductors play an outsized role in Taiwan’s industrial and economic development and are a major driver of the Taiwan-US trade imbalance With US President Donald Trump threatening to impose tariffs on semiconductors, Taiwan is expected to face a significant challenge, as information and communications technology (ICT) products account for more than 70 percent of its exports to the US, Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) president Lien Hsien-ming (連賢明) said on Friday. Compared with other countries, semiconductors play a disproportionately large role in Taiwan’s industrial and economic development, Lien said. As the sixth-largest contributor to the US trade deficit, Taiwan recorded a US$73.9 billion trade surplus with the US last year — up from US$47.8 billion in 2023 — driven by strong
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