Weekly Market Recap: Week of July 27, 2026

The week in review

• U.S. flash PMI rose to 53.6
• Michigan consumer sentiment came in at 54.4

The week ahead

• Trade balance
• Initial claims
• Unemployment

Thought of the Week

The average U.S. headline tariff rate has moderated meaningfully from its April 2025 peak, as the authorities under which the administration has attempted to impose tariffs have continued to evolve. After briefly reaching 18%, the average headline tariff rate has fallen to roughly 10%, although it remains well above pre-2025 levels. Much of the decline reflects the Supreme Court’s ruling against the administration’s use of tariffs under the International Emergency Economic Powers Act (IEEPA), which led to the removal of many emergency tariffs. Looking ahead, however, new sector-specific tariffs under Section 232 are expected to offset part of this decline, leaving the average tariff rate elevated relative to history.

While the headline tariff rate captures announced policy, the realized burden on businesses has also eased. The effective tariff rate – which reflects actual duties paid as a share of goods imports – fell from a peak of approximately 12% late last year to around 7% in May, as the IEEPA tariffs were replaced by temporary tariffs at a lower rate under a different authority. At the same time, tariff refunds surged following the Supreme Court’s decision. The Treasury paid $49.2 billion in tariff refunds in June, roughly double new tariff collections for the month.

Preliminary analyses suggest that much of the tariff burden was absorbed by the companies themselves, rather than being passed onto consumers. Whether companies continue to absorb tariff costs will be important for corporate profits and inflation going forward. However, with a lower headline rate, neither threat is as significant as it was a year ago.

Chart of the Week: Source: Tax Policy Center, J.P. Morgan Asset
Management. Average statutory tariff rate of a policy (on a day) is the
sum of tariff rates (on that day) on all import flows, imposed by that
policy conditional on all other policies being in effect, weighted by
import flows’ 2025 import volumes. Estimates exclude AD/CVD.
“Section 232 ” is an aggregation of Section 232 automobile (and
parts), truck (and parts), and bus tariffs, as well as Section 232
aluminum, steel, copper, wood, semiconductor, and pharmaceutical
tariffs. IEEPA is the International Emergency Economic Powers Act.
forecasts is by Tax Policy Center, a nonpartisan think tank which
provides analysis on current and longer-term tax and policy issues.
Thought of the week: Source: Federal Bank of St. Louis, U.S. Treasury
Department, J.P. Morgan Asset Management.

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Originally Posted July 27, 2026 – Weekly Market Recap

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