In today’s Steady Investor, we take a closer look at the forces shaping markets this week and what they could mean for investors. Key themes include:
Should Investors Be Worried About Rising Global Bond Yields? Market-watchers could not avoid the story on rising long-term government bond yields this week, with a wave of headlines tying the moves to rising fiscal concerns and inflationary pressures. Yields on 30-year bonds in France, Germany, the Netherlands, and the UK all hit decade-plus highs, while 30-year U.S. Treasury bond yields rose more modestly. In Europe, markets focused on political instability in France, higher defense spending in Germany, and hotter-than-expected inflation data for August.
Much of the coverage attributes these yield increases to localized issues. In France, the government is expected to fail a confidence vote over budget reforms, raising fears about the country’s deficit outlook. In Germany, spending plans tied to NATO commitments are said to be undermining the haven status of Bunds. The UK faces similar scrutiny, with analysts citing political reshuffles and budget uncertainty. These stories are worth watching closely, but it may also be true that what we’re seeing here is a sentiment shift, not a fundamental change or a sign of rising fiscal stress. There also may be some good news hidden under the surface. Yield curves are steepening, particularly in countries where central banks are expected to cut short-term rates while long-term rates rise. That’s historically a positive sign for economic growth.1
Tariffs, Yields, and Earnings: What It Means for Your Portfolio
Markets are juggling a mix of rising bond yields, strong-but-selective earnings, and ongoing tariff uncertainty. For investors, these shifts don’t always cause big headlines, but they can quietly reshape risks and opportunities.
That’s why we put together our free guide, Using Market Volatility to Your Advantage2. It shows how to turn periods of uncertainty into chances to strengthen your portfolio and stay on track toward long-term goals. Inside, you’ll learn:
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Download Our Guide, “Using Market Volatility to Your Advantage”2
A Closer Look at What May Be Driving Earnings Strength – The message from Q2 2025 earnings season was clear: American corporations found ways to power ahead, despite a challenging backdrop of tariffs, policy uncertainty, and shifting global demand. As we write, total Q2 2025 earnings are on track to rise by +12.1% from a year earlier on +6.1% higher revenues. These are great results, but there are a few takeaways under the hood that investors should be aware of. First, as has been the case in recent quarters, is that Technology has done a lot of the heavy lifting. Second, margin improvements and productivity gains have been big contributors, as firms focus on automation, hiring freezes, and cost cuts to boost profitability. While this efficiency-led approach is paying off for investors, it is masking cracks in the consumer landscape. Retailers like Procter & Gamble and snack makers are seeing consumers pull back, opting to stretch household goods and delay restocking. Commerce Department data shows cutbacks in discretionary categories like restaurants and recreation. Indeed, mentions of “consumer risk” on corporate earnings calls have spiked to double typical levels, reflecting mounting concern about future demand. In short, today’s profitability boom is less about booming demand and more about belt-tightening. That may be good for shareholders in the near term, but it raises questions about sustainability if more consumer pushback arrives.3
Tariff Policy May Be Headed to the Supreme Court — The Trump administration has fast-tracked a high-stakes appeal to the U.S. Supreme Court, seeking to uphold its sweeping global tariff regime after a federal appeals court ruled last week that the administration overstepped its authority.At the heart of the case is President Trump’s use of the International Emergency Economic Powers Act (IEEPA) to justify broad import levies. The appeals court concluded that the IEEPA does not explicitly grant authority to impose taxes or tariffs, even in an emergency, and allowed the duties to remain in place only temporarily, through mid-October, while the administration petitioned the Supreme Court. That day may be arriving soon, with a petition filed to have the case be reviewed and expedited “to the maximum extent feasible,” citing the policy’s foundational role in current trade negotiations. Time will tell. But even if the Supreme Court rules against Trump’s current legal rationale, that likely won’t be the end of the story. The administration is already signaling that alternative tools are under consideration. One floated option is Section 338 of the 1930 Smoot-Hawley Tariff Act, which gives the president temporary authority to impose duties up to 50% on imports from nations that discriminate against U.S. goods. It’s not yet clear how viable such alternatives are, or whether they’d be challenged in court as well, but the groundwork is already being laid. For investors, the prospect of tariffs “by other means” likely limits any market-shaking surprise. For now, we continue monitoring the case, not just for its legal outcome, but for how it fits into the broader trajectory of U.S. trade policy, executive authority, and investor expectations.4
Tariffs, Yields, and Earnings—What Should Investors Do Now? Markets are shifting, and the outlook isn’t always straightforward. The key is staying disciplined and knowing how to position your portfolio through uncertainty.
Our free guide, Using Market Volatility to Your Advantage5, shares insights to help you navigate risks and spot opportunities, including:
If you have $500,000 or more to invest, download this free guide today by clicking on the link below.
Disclosure