US Equities at New Highs Despite Macro Uncertainty, Fed Action Possible Amid Tariff Impact

Barclays warns that early signs of tariff drag on US growth could prompt the Federal Reserve to act sooner, despite resilient Q2 earnings supporting equity markets. The bank sees a cooling labor market and softer ISM data as evidence of slowing growth, with markets now pricing in a 95% probability of a September rate cut. Barclays notes that a hawkish US consumer price index report next week could reinforce rate cut expectations, while a softer print would likely cement rate cuts and lift equities.

Title: Embraer's $1 Billion US Investment to Mitigate Tariff Uncertainty

Embraer SA has announced plans to invest $1 billion in the United States over the next five years to mitigate potential tariff fallout. The Brazilian aircraft manufacturer is considering a $500 million investment in a new US assembly line and a $500 million investment in existing plants in Texas and Florida. These investments could create up to 2,500 jobs if the US government selects its KC-390 military aircraft for local production [1].

The company is urging the industry to return to a zero-tariff regime that long governed the aviation and aerospace sector. Embraer has received support from US customers, including American Airlines Group Inc., which recently announced an order of 90 E175 aircraft from the Brazilian jet maker [1].

Embraer reported $1.8 billion in revenue in the second quarter, the highest for that period in its history, alongside an adjusted operating margin of 10.5%, the highest in a decade. The company reiterated its outlook for sales, earnings, and aircraft deliveries [1].

For now, Embraer will be subject to the minimum tariff rate for imports, set at 10%, though management said the actual impact is lower. The company estimated a $65 million impact from that rate, according to Chief Financial Officer Antonio Garcia, and Embraer was able to offset the fallout with measures including cost cuts [1].

References:
[1] https://www.ainvest.com/news/embraer-invest-1-billion-tariff-uncertainty-2508/
[2] https://www.tradingview.com/news/reuters.com,2025:newsml_S0N3SZ01R:0-us-services-activity-flatlined-in-july-ism-data-shows/