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Smart Investor: 60/40 Portfolios, Nvidia at $4 Trillion, Will Tariffs Bite Q2 Earnings

We wrap up our coverage of the markets and the week.

The Nvidia logo is displayed on headquarters.
Justin Sullivan via Getty

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This week’s highlights:

While the headlines are filled with renewed tariff threats from President Donald Trump, the stock market seems to be taking it in stride. (TACO trade anyone?) The result was a quiet first full week of the third quarter, with the market little changed.

If there was any excitement to be had, it was in crowning Nvidia with a new title: the first public company to be worth $4 trillion. Sarah Hansen and Bella Albrecht pulled together four charts that illustrate Nvidia’s amazing rise and dominance.

While the markets haven’t been ruffled by the ongoing tariff back-and-forth coming out of the White House, that’s not to say they don’t matter. The next big test around the impact of the new tariffs already in place will be the June Consumer Price Index report due out Tuesday. Economists are expecting inflation to start edging higher again thanks to Trump’s levies.

Also Tuesday, second-quarter earnings season kicks off with the first of the big banks reporting. With earnings growth already expected to slow in the second half of the year, analysts will be watching for signs that tariffs are biting into profit margins and dampening the outlook for growth. We take a close look at the prospects for the tariffs’ impact on earnings here.

Bigger picture, Morningstar’s director of equity research in the US, Damien Conover, sat down with Susan Dziubinski and discussed which sectors and industries are likely to be most vulnerable to tariffs as time wears on.

Against this backdrop, Morningstar’s chief US market strategist David Sekera offers up his take on the second-half outlook for stocks and where the risks and opportunities are. While the market has been quiet lately, Sekera expects volatility to return. Find out here how he thinks investors should be positioned right now.

Another key variable for investors: the weakening dollar, which just had its worst half-year performance since 1991. How much lower can it go?

You can also check out our complete second-quarter and third-quarter outlook coverage at this link. That includes a new feature: We recap changes that our analysts made to Morningstar Economic Moat Ratings on stocks they cover. These ratings a key part of Morningstar’s approach to stock-picking, and we highlight six companies that saw moat rating changes in the second quarter.

Last, this week’s must-read is our in-depth look at the long-term history—as in the past 150 years—of the 60/40 stock/bond portfolio. Emelia Frederick, with behind-the-scenes help from Bella Albrecht and some deep Morningstar research, digs into what investors can learn about how balanced portfolios perform over time. It’s a great read.

As always, be sure to visit our Markets pagefor our latest coverage and live stock market updates along with our full weekly calendar of key upcoming data and events.

The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.

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