Weekly Pricing Pulse: Tariff Deadlines Approach and Freight Rates Decline

• The Material Price Index (MPI) by S&P Global Market Intelligence declined a further 0.3% last week, the second consecutive weekly decline.
• The decrease was narrow, with five of the ten subcomponents declining and five increasing.
• The freight rate subindex declined by 4.4% last week, following strong growth in the weeks prior. 
• Markets have largely calmed as the ceasefire between Iran and Israel held, but some risk premium still exists.

Last week a key piece of US legislation was passed and signed, which brings in sweeping tax cuts, rolls back clean energy tax credits, and is expected to significantly grow the US’s national debt.

Markets responded positively with the S&P 500 rising 1.7% over the week. The beginning of July also marked the dollar’s worst first half of the year since 1973, falling nearly 11% against a basket of other currencies. Meanwhile, the US’s trade deficit widened by $11.3 billion in May to $71.5 billion as exports fell 4%.

The coming week will see the tariff “D-day” of July 9, although it is unclear whether tariffs will be immediately reimposed. Vietnam and the UK have deals in place, but the fate of trade remains uncertain. Risk continues to be to the upside in anticipation of new unknowns.

The Material Price Index (MPI) by S&P Global Market Intelligence declined a further 0.3% last week, the second consecutive weekly decline. The decrease was narrow, with five of the ten subcomponents declining and five increasing. The MPI is approximately 9.7% lower than it was the same week a year ago, indicating a general easing in commodity prices over the past 12 months.

The freight rate subindex declined by 4.4% last week, following strong growth in the weeks prior. The past few weeks saw stronger pricing as US importers attempted to get goods in—notably from mainland China—before the July 9 deadline for tariffs arrived. As the deadline nears, importers are unwilling to cut it so close, and so demand declined and brought prices with it.

The energy index fell again last week—1.2%—as oil prices declined a further 1.5%. Markets have largely calmed as the ceasefire between Iran and Israel held, but some risk premium still exists. Brent crude, the international benchmark, sat around $68/barrel last week, about $4/barrel higher than when the conflict began. Brent crude prices are well below their 2024 average of $81/barrel.

—By Gregory Muller

This article was published by S&P Global Market Intelligence and not by S&P Global Ratings, which is a separately managed division of S&P Global.