The halfway point of 2025 is today at noon, which marks 182.5 days into the 365-day year. The benchmark S&P 500 is up 5.4% so far, even after taking a Greg Louganis-worthy 19% dive in April following President Donald Trump’s “Liberation Day” tariff announcement.

Federal Reserve officials, meanwhile, have held off on interest rate cuts — to Trump’s everlasting chagrin. On Tuesday, Federal Reserve Chair Jerome Powell gave his most forceful statement yet blaming the tariffs for the hold-up, but he also left some wiggle room for the next 182.5 days.

State of the Rate

The S&P 500 notched its first record high in more than four months on Friday. It marked an encouraging sign that markets are no longer especially concerned with the worst-case scenarios initially imagined when Trump announced he would rain tariffs on trading partners. The effective US tariff rate, based on policies announced this year, is now 13%, up from 3% at the start of the year, according to Goldman Sachs. Nevertheless, it’s a far cry from the tumultuous but mercifully brief days of 145% tariffs on China in April.

Speaking to the European Central Bank forum in Sintra, Portugal, on Tuesday, Powell said, as explicitly as ever, that the trade tumult of 2025 is the reason the Fed hasn’t cut rates: “We went on hold when we saw the size of the tariffs, and essentially all inflation forecasts for the United States went up materially as a consequence of the tariffs.” The Fed has kept its key borrowing rate steady at 4.25% to 4.5% since December, though officials have suggested it could be lowered to 3.5% in the next year if inflation eases. The latest projections from the Fed’s policy-setting Federal Open Market Committee hint at two cuts before the year is out. Tuesday saw economic data that, for better or worse, could encourage intervention:

• Core prices rose 2.7% in May, the Commerce Department announced last week, which is slightly above the Fed’s 2% inflation target, a primary concern related to their rate-setting. But Tuesday saw mixed signals from the labor market: The Bureau of Labor Statistics said job openings rose in May by 374,000 to 7.77 million, the most since November, but actual hires fell 112,000 to 5.5 million. Manufacturing, meanwhile, contracted for the fourth month in a row in June, according to the Institute for Supply Management.
• In addition to stable inflation, a weakening economy could prompt the Fed to cut rates to stimulate activity, which would, in either case, make borrowing money cheaper for firms. Powell said a “solid majority” of Fed officials believe it “will become appropriate later this year to begin to reduce rates again” and left the door open to taking policy action at any time, stating he “wouldn’t take any meeting off the table or put it directly on the table.”

Don’t Bet On It: A rate cut at the Fed’s monetary policy meeting later this month seems unlikely, although jobs data due Thursday will undoubtedly impact officials’ thinking. Investors see a 78.8% chance that rates will be held steady at the July 29-30 meeting, according to CME Fedwatch.

Shares in two of Detroit’s Big Three automakers went into overdrive Tuesday as Ford and General Motors reported surging sales in the second quarter.

New overall market data, however, suggests the windfall — felt by other automakers as well —was fueled largely by panic buyers trying to get ahead of tariffs. The concern now is that the second half of 2025 will be like driving a compact sedan down the Rubicon Trail.

Panic at the Showroom

The auto industry and prospective US auto buyers are in a road race with economics, in a sense. The Trump administration slapped a 25% tariff on imported cars and trucks in April, along with duties on foreign-made parts. With the looming threat of price hikes, Americans flocked to showrooms and purchased roughly 173,000 extra vehicles in March and April, according to JD Power analysts. On Tuesday, automakers reported sterling sales numbers thanks to the combination of panic buying and incentives to clear out inventory amid the customer frenzy, most notably Ford offering employee discount pricing through July 6. (Saddling that Mustang will become pricier next week).

Ford said that its second-quarter sales rocketed 14% from a year earlier to 612,095 vehicles, or “about 10 times the estimated 1.4% industry increase,” the company boasted. Sales of the company’s F-Series, Ranger, and Maverick pickups climbed 15% to 288,564. Ford shares jumped 4.6% and have climbed over 14% this year. GM said its second-quarter sales rose 7% to 746,588 vehicles, sending its shares up 5.7% on Tuesday. GM said it sold a record number of crossovers so far this year, including its Chevrolet Trax, Traverse, and Equinox; GMC Acadia and Terrain; and Buick Envista and Encore GX. But there’s already data that suggests the once burning-hot sales trend is, like the Canadian territory that lends the GMC Yukon its name, on the cool side:

• JD Power estimates the annualized pace of auto sales dropped to 15 million in June from 17.6 million in April, the slowest in 12 months. The firm’s analysts wrote that the 173,000 extra vehicles sold in March and April amount to a “pull-ahead effect” that “has now become a payback effect, deflating June sales below the actual level of vehicle demand.”
• Sales may grow even more sluggish if carmakers conclude that they need to raise prices to pass on tariff costs to consumers. Cox Automotive estimates importing a car will cost $5,700 more under tariffs and assembling one in the US will cost $1,000 more, with consumers looking at 4% to 8% price hikes. JD Power, however, says buyers still may have time, predicting that even if some price hikes may arrive this month and in August, “it will likely be at year’s end before manufacturers’ new pricing and incentive strategies fully materialize.”

Ford and GM’s South Korean rivals also reported strong sales Tuesday: Hyundai said 10% US sales growth led to its best first-half ever, with Kia’s 8% sales growth helping it reach the same landmark.

Humming Along: GM sold over 4,500 electric Hummer SUVs in a banner second quarter for electric vehicle sales that bucked a trend of slumping EV sales in the broader industry. The company, which became America’s second-largest EV seller after Tesla last year, sold a total of 46,280 electric vehicles in Q2, representing a 111% year-over-year increase. Ford’s sales of all-electric vehicles, meanwhile, fell 31% YoY in the quarter, though sales of hybrid vehicles rose 23%. The Chevy Equinox EV, which sold over 17,000 units, is the breakout star of GM’s electrified run.

Home Depot wants to improve its bottom line, whether homeowners are embracing home improvement or not.

It’s why the company paid $4.3 billion this week to win a bidding war for building products distributor GMS. The acquisition is among a series of moves that give the big box retailer a critical direct line to commercial contractors.

Raise the Roof

Home Depot’s retail roots have historically made it a one-stop shop for homeowners tackling big home improvement projects with a do-it-yourself mentality. The problem with that strategy in 2025? Thanks to a slowdown in home sales and persistently high interest rates, practically nobody is doing DIY home improvement projects anymore. Which is why the retail player has spent the past few years seeking avenues to diversify into the typically steadier business of professional construction projects (sorry, suburban dads, but haphazardly wielding power tools and insisting “don’t worry, I’m a pro” does not actually make you one).

The push into the pro market began in earnest last year, when Home Depot dropped $18.5 billion to buy SRS Distribution, which sells supplies to roofers, landscapers and other professionals in the contracting world. The acquisition of GMS — which was completed at about a 35% premium to the company’s share price, and including debt, holds a total enterprise value of around $5.5 billion — gives it an ever deeper reach in the professional world:

• Based in Tucker, Georgia, GMS operates about 320 distribution centers and sells, rents and delivers products such as drywall and steel framing directly to contractors at commercial job sites.
• Home Depot is completing the acquisition through SRS, which will remain a subsidiary of the big-box retail company. Together, GMS and SRS will operate “a network of more than 1,200 locations and a fleet of more than 8,000 trucks capable of making tens of thousands of jobsite deliveries per day,” SRS CEO Dan Tinker said in a statement.

Build Your Own Business: Home Depot’s bidding-war win is billionaire Brad Jacobs’ loss. Last year, Jacobs launched a building products company, QXO, with the express purpose of creating an industry empire through mergers and acquisitions. GMS had been Jacobs’ latest target; he offered $5 billion in cash for the firm last week and threatened a hostile takeover if the bid was rejected. Home Depot ultimately topped that bid. Which means to build a bigger construction business, Jacobs may have to rely on a little less M&A and a little more DIY spirit.