US Banks Signal Slowdown as European Lenders Post Stellar Wins: Trade Tensions & Earnings in Focus

• Why Are US Banks Facing a Slowdown?
• How Bad Are the Numbers for US Firms?
• What’s Next for Investors?
• Why Is the G20 Meeting Adding to Market Jitters?
• What’s on the US Economic Calendar?
• FAQs: Your Burning Questions Answered

The financial world is bracing for a turbulent week as US banks hint at a slowdown amid rising tariffs and political chaos, while European banks surprise with their strongest half-year performance since 1997. Investors are scrutinizing earnings reports for clues on how companies are navigating trade wars, inflation, and sluggish global demand. Meanwhile, the absence of US officials at the G20 meeting in South Africa adds another LAYER of uncertainty to already fragile markets.

Why Are US Banks Facing a Slowdown?

The backdrop? A perfect storm of trade disputes, fresh tariffs, political turmoil at the G20, and a US economic calendar that looks like a minefield. This week, banking giants like JPMorgan, Goldman Sachs, Bank of America, Citi, and Morgan Stanley will report earnings within just two days. The big question: How much has Trump’s trade policy started to bite? Goldman Sachs analysts note that US companies are grappling with higher tariff costs but have only marginally raised prices—meaning profits are taking the hit. Their team pointed to weak responses from firms with soaring import costs, signaling trouble ahead.

How Bad Are the Numbers for US Firms?

The squeeze is already visible. Goldman predicts S&P 500 earnings-per-share growth will drop to just 4% year-over-year—a sharp decline from the 12% growth seen in Q1. The equation is simple: Costs are climbing, revenue isn’t keeping pace, and companies are stuck in the middle. While US firms brace for bad news, European banks are defying expectations. They’ve just posted their best first-half performance since 1997, driven by booming investment banking fees and a flurry of M&A activity. US firms might hope to replicate this success, but with trade tensions escalating, there’s no guarantee.

What’s Next for Investors?

Wall Street isn’t just looking for solid numbers—it wants proof that companies can handle what’s coming. Inflation, more tariffs, consumer pullbacks, and weaker global demand are all on the horizon. CEOs will face tough questions during earnings calls, and their answers could MOVE markets instantly. As one BTCC analyst put it, "The real test isn’t past performance—it’s preparedness for the next shock."

Why Is the G20 Meeting Adding to Market Jitters?

While banks report earnings in New York, global politics are heating up in Durban. G20 finance ministers and central bankers are meeting this week in South Africa—but the US delegation is notably absent. Treasury Secretary Scott Bessent skipped the event entirely, opting for a trip to Japan instead. This leaves a glaring gap in US representation at a time when international trust is already thin. The tension traces back to May, when a White House meeting between TRUMP and South Africa’s President Cyril Ramaphosa ended in flames after Trump made false claims about "white genocide" in South Africa. Relations haven’t improved since—the US recently slapped a 30% tariff on South Africa, making it the only sub-Saharan nation hit by the latest round of trade penalties.

What’s on the US Economic Calendar?

Markets will react Monday to fresh tariffs on Mexico and the EU. Tuesday brings June inflation data via the Consumer Price Index, followed by the Producer Price Index on Wednesday. Retail sales figures land Thursday, and Friday closes with the University of Michigan’s July consumer sentiment report. And if that weren’t enough, 12 Federal Reserve speakers are scheduled throughout the week—each word parsed for hints of policy shifts. As TradingView data shows, volatility is almost guaranteed.

FAQs: Your Burning Questions Answered

How are European banks outperforming US banks?

European lenders are riding high on investment banking gains and M&A deals, marking their best half-year since 1997. US banks, meanwhile, are squeezed by tariff costs and stagnant revenue growth.

Why did the US skip the G20 meeting?

Treasury Secretary Bessent’s absence reflects strained US-South Africa relations, exacerbated by recent tariffs and diplomatic spats. The move signals deeper fractures in global cooperation.

What’s the key takeaway from this week’s earnings reports?

Investors are less focused on past performance and more on whether CEOs have plans to tackle inflation, tariffs, and slowing demand—answers that could sway markets instantly.