A global trade win with Japan gave markets room to run. A top industrial name just posted strong guidance. 

Mortgage activity is rising, but permits are stalling. And as the Fed fights to hold its ground, leading indicators tell a quieter story. Here’s what investors are watching today.

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The Big Picture

Tourism

Billions Lost in Border Slump: Sharp Drop in Canadian Tourism Hits U.S. Travel Sector 

The U.S. travel sector is experiencing an uneven rebound in international tourism, with visitor numbers from Canada declining while those from Mexico continue to rise.

New data from the U.S. Travel Association shows a nearly 19% drop in Canadian visits during the first half of 2025 compared to the same period last year.

That decline alone has shaved $1.9 billion off overall travel spending.

Canadian traffic has dropped sharply, resulting in a 3.4% decline in total international arrivals.

Analysts say the shortfall is starting to show up in booking trends across airports, hotels, and entertainment districts in key border states.

At the same time, travel from Mexico has generated nearly 940,000 visitors and $500 million in related spending.

That rise is helping offset the broader slowdown and signals a potential rebalancing in the U.S. inbound tourism mix.

For U.S. industries tied to leisure, hospitality, and retail, this shift carries operational and pricing implications.

Cities like Las Vegas, Orlando, and San Diego are susceptible to changes in North American travel flows.

While international interest remains resilient in some regions, new federal policies that slash funding for U.S. tourism promotion and hike visa fees could add headwinds ahead of major global events.

The outcome may shape not just travel receipts but also local economic activity across dozens of metro areas.

Housing

U.S. Housing Market Hits 9-Month Low as Affordability Gap Widens 

Existing home sales in the U.S. fell to a nine-month low in June, reinforcing signs that affordability challenges are reshaping the national housing market.

According to data from the National Association of Realtors, sales declined 2.7% to a seasonally adjusted annual rate of 3.9 million units.

Despite steady demand, two major forces continue to hold back transaction volumes: record-high home prices and persistently elevated mortgage rates.

The median home price reached $435,300 in June, marking the highest level ever recorded for the month and underscoring the lingering effects of years of underbuilding.

Inventory remains tight, especially in entry-level segments, where first-time buyers are increasingly priced out.

The combination of high borrowing costs and constrained supply has stalled momentum, despite population growth and household formation rates suggesting significant latent demand.

Mortgage rates in the second half of June averaged around 6.8% for a 30-year fixed loan, according to Freddie Mac.

That level has remained sticky for months, further limiting buying power for renters and sidelining existing homeowners who locked in lower rates during the pandemic-era lows.

While homebuilders have shown signs of increasing construction activity, the pace has not yet caught up to demographic demand.

Structural constraints, which range from zoning policies to labor shortages, continue to limit the development of new supply.

The U.S. housing sector remains a key bellwether for economic resilience, with significant knock-on effects across the construction, lending, and consumer spending sectors.

The sales dip suggests a more profound affordability issue that is challenging to address.

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Commodities

Domestic Sugar Mills Eye Relief as Import Curbs and Price Supports Expand

The U.S. sugar industry is receiving renewed federal support as policymakers move to restrict certain specialty sugar imports and expand price guarantees for producers.

The latest restrictions are to enforce existing trade limits and curb market share losses to foreign suppliers.

Domestic producers have struggled to maintain competitiveness against subsidized imports, particularly from Brazil and Mexico.

Over the past two decades, U.S. sugar growers have lost an estimated 15% of their market share, contributing to the closure of processing plants and mill consolidations across several states.

To address these pressures, the U.S. Department of Agriculture has clarified that it will not exceed its trade obligations for specialty sugar purchases under current trade agreements.

This cap aims to protect against oversupply and price suppression in the domestic market.

At the same time, updates to the U.S. Sugar Program will increase the price floor for raw and refined sugar sold to the government, raising revenue opportunities for producers.

The new rates represent a 35% boost from previous levels, according to the Government Accountability Office.

The U.S. imported nearly $2.6 billion in raw sugarcane last year under a tiered tariff regime. Once import thresholds are exceeded, higher tariffs are automatically triggered.

The new measures aim to manage this volume better and ensure long-term supply chain resilience.

As global competition intensifies and trade relationships evolve, these steps aim to stabilize a sector considered essential for domestic food security.

Metrics to Watch

• LEI Declines Sharply: The Leading Economic Index dropped 0.3% in June, capping its steepest six-month slide since 2023.

• Permits Still Lag Despite Starts Rebound: Housing starts rose to 1.32 million in June, but flat permitting data points to uncertainty among developers.

• Mortgage Applications Jump: Applications for new mortgages rose 22% YoY in mid-July, driven by rate dips and growing price fatigue.

• Tariff-Sensitive Prices Tick Up: Inflation in categories such as apparel and toys increased in June, indicating early pass-through effects from tariffs.

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Market Movers

📈 U.S. Resilience Surprises Forecasters:
A spring slump in sentiment gave way to a midsummer rebound as retail sales, consumer confidence, and credit card data all came in stronger than expected.

JPMorgan, Goldman Sachs, and Bank of America now say a 2025 recession is off the table, marking a sharp shift from the gloomy consensus in April.

With earnings season off to a solid start, the narrative is shifting from survival to soft landing, even as tariff-related risks remain unresolved.

U.S.–Japan Trade Pact Eases Global Tensions:
Markets breathed a sigh of relief after the U.S. and Japan reached a new trade agreement that capped tariffs at 15%, down from the previously threatened 25%.

Japan committed to a $550 billion U.S. investment package, and carmakers won reduced levies on vehicle exports.

Toyota shares surged 14% on the news, and the Nikkei closed up 3.5%.

The deal helped offset fears of wider trade disruptions, though it raised pressure on Europe to secure a similar outcome.

🏘️ Housing Market Breaks from the Script:
Spring failed to revive the U.S. housing market, with June existing-home sales falling to a nine-month low even as prices hit a new record of $435,300.

High mortgage rates and limited inventory continue to squeeze affordability.

But, it is shifting: 25% of listings received price cuts last month, and buyers are increasingly seeking assumable mortgages or smaller homes.

Sellers, facing longer time on the market, are starting to negotiate again, a trend not seen since 2019.

⚠️ EU Prepares to Retaliate as Trade Talks Falter:
European officials are drawing up countermeasures as U.S. demands for greater concessions threaten to derail ongoing negotiations.

With Trump’s Aug. 1 deadline looming, the bloc is considering digital services taxes, limits on public procurement access, and expanded tariffs, including those targeting U.S. pharmaceuticals and tech firms.

Germany and France, once divided on strategy, are now aligned on pushing back, warning that “if they want war, they will get war.”

🏗️ Tariff Ripples Hit Construction and Investment:
June housing starts rose modestly, but permits remained weak, indicating that builders remain cautious.

Developers and small businesses say tariff uncertainty is driving up input costs and stalling new projects.

However, others are shifting their focus toward existing operations and customer retention, with some accelerating hiring in areas such as sales and marketing.

With Trump’s landmark tax bill now law, analysts say its full impact on capital spending won’t materialize until late Q3 or early Q4.

Market Impacts

Equities: The S&P 500 and Nasdaq closed at new all-time highs on Wednesday, buoyed by bullish earnings and continued optimism about trade.

Alphabet beat on both revenue and earnings, gaining 2% in after-hours trading. However, Tesla fell 4% after another decline in auto revenue, and IBM slipped 5% due to weak software sales.

Health care led sector gains, with Thermo Fisher surging 9.1% on strong results. Meanwhile, ServiceNow jumped 7% after raising full-year guidance.

Investors cheered reports of a finalized U.S.–Japan trade pact and signs of progress with the EU, reinforcing the bullish case despite pockets of earnings volatility.

Bonds: Treasury yields edged higher Wednesday after Treasury Secretary Scott Bessent downplayed the risk of Powell’s removal, helping soothe fears about Fed instability.

The 10-year yield rose to 4.39%, while the 2-year moved up to 3.88%. Markets now expect the Fed to hold rates steady at its July 29–30 meeting, with hopes for a rate cut pushed into the fall.

Traders are closely watching political rhetoric for any renewed threats to Fed independence, which remains a key concern for investors in longer-dated bonds.

Currencies: The dollar softened against the yen early Wednesday on news of the U.S.–Japan tariff deal, but later recovered as political rumors in Tokyo pressured the yen.

The dollar last traded at 146.44 yen, down 0.1%, while the euro rose 0.4% to $1.1762. The Swiss franc slipped as risk appetite improved.

Currency markets remain volatile, with investors cautious ahead of the August 1 trade deadline.

Analysts say recent moves reflect both trade optimism and lingering uncertainty around global policy direction.

Commodities: Oil prices stabilized after three straight days of declines.

Brent settled at $68.51 and WTI at $65.25, as news of the U.S.–Japan trade agreement lifted sentiment, although delays in EU and China talks capped the upside.

Meanwhile, gold fell 1.3% to $3,387.67 as safe-haven demand ebbed, but silver briefly touched a 14-year high before pulling back.

Metals traders are closely watching the dollar, with a weaker greenback likely to reignite demand for both gold and silver.

The EU’s approach to retaliatory tariffs could also swing commodity flows in the weeks ahead.

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Key Indicators to Watch

• 📅 Durable Goods Orders – Friday, July 25:
  Headline orders are expected to fall sharply in June after a major aircraft-related spike the prior month. The focus will be on the core figure, excluding transportation, which is expected to rise modestly and could signal resilience in business investment.
  

• 📅 Consumer Confidence – Tuesday, July 29:
  The Conference Board’s index is forecast to dip to 93.0, down from 100.4, amid Powell-related uncertainty and mixed inflation readings. This will be a key gauge of whether recent drama is finally starting to hit household sentiment.
  

• 📅 S&P Case-Shiller Home Prices – Tuesday, July 29:
  May’s report is expected to show continued price growth in major metro areas, despite high mortgage rates. A reading above 3.4% YoY would confirm that limited inventory remains the driving force in the housing market.
  

• 📅 JOLTS Report – Tuesday, July 29:
  Job openings are forecast to come in around 7.8 million for June. Any surprise drop could rekindle labor market concerns and increase pressure on the Fed, especially with wage growth still trending above historical norms.

Everything Else

• U.K. firms that left during Brexit may now return as Trump's tariffs drive them to reconsider their global operations.

• Inflation expectations have returned to pre-tariff levels, according to the latest University of Michigan survey, signaling a potential shift in consumer psychology.

• Some U.S. trade deals have closed, but others, including key players like China, Mexico, Canada, and the EU, remain unresolved ahead of the August 1 deadline.

• The European Central Bank is pausing its rate cut plans as trade negotiations cloud the eurozone’s economic outlook.

• China’s deflation problem won’t disappear overnight, even with industrial reforms and policy easing underway.