Inflation Creep, Earnings Heat, and 5 Stocks We’re Watching Right Now

Markets are wobbling this week as investors juggle two competing narratives: signs of tariff-driven inflation and a potentially better-than-expected start to Q2 earnings season. 

While headline CPI rose 0.3% in June and annual inflation clocked in at 2.7%, much of Wall Street remains focused on forward earnings guidance and the strength of corporate balance sheets, especially in sectors vulnerable to rising input costs and shifting trade dynamics.

President Trump’s new 30% tariffs on imports from Mexico and the EU, set to take effect August 1, have yet to derail the rally in major indexes, but signs of pressure are emerging beneath the surface.

Durable goods inflation ticked higher in the June report, a sign that tariffs are beginning to filter through the supply chain. 

That’s adding new uncertainty ahead of the Producer Price Index report and further Fed commentary later in the week.

At the same time, earnings season has officially begun, with the largest banks posting solid but cautious results.

Johnson & Johnson and other consumer-facing names are up next, and the S&P 500 is expected to post just 4.3% year-over-year earnings growth for Q2, down sharply from Q1’s double-digit pace.

With the bar set low, strong beats could fuel another leg higher in the market.

Here are five stocks we’re watching closely:

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Huntington Bancshares | HBAN

Price: $16.64

Huntington Bancshares has been in the spotlight after announcing a $1.9 billion all-stock acquisition of Veritex, a move aimed at expanding its regional lending footprint and deposit base. 

While the strategic rationale makes sense, especially amid a competitive environment for quality loan growth, the market hasn’t fully embraced the deal.

Shares slid more than 3% on the news, reflecting investor unease over integration risk and near-term dilution.

HBAN offers a compelling long-term story.

The bank reported $1.92 billion in Q1 revenue and maintains a net interest income base of $1.43 billion, anchored by a diversified loan book and stable deposit flows. 

With a P/E ratio of 12.77 and a 3.7% dividend yield, the stock trades at a discount to peers.

Profitability metrics remain solid, including a 32% pretax margin and 8.9% return on equity.

The market is likely to remain cautious until more details emerge regarding cost synergies and cultural fit following the acquisition.

But for value-oriented investors with a longer time horizon, HBAN could be setting up as a turnaround story worth revisiting—especially if Q3 results show stabilization in loan quality and efficiency ratios.

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Kenvue Inc. | KVUE

Price: $21.85

Shares of Kenvue, the $41 billion consumer health spin-off from Johnson & Johnson, jumped after the company's CEO, Thibaut Mongon, stepped down, prompting a board-led strategic review.

Kirk Perry, a seasoned executive and board member, is stepping in as interim CEO as the company explores various options, including potential divestitures from its underperforming skin and beauty portfolio.

Investors welcomed the shakeup, especially in light of weaker-than-expected preliminary Q2 results.

Organic sales fell 4.2%, while adjusted EPS came in at $0.28–$0.29.

While the top line disappointed, analysts believe operational improvements and portfolio optimization could reinvigorate growth. 

With a 3.8% dividend yield, strong gross margins (58%), and potential catalysts tied to the strategic review, KVUE could become more than just a defensive play.

SoundHound AI | SOUN

Price: $11.80

SoundHound has been one of the most volatile AI names of the past year, and that trend isn’t letting up.

Shares are down nearly 44% year-to-date, following a meteoric rise in 2024; however, the underlying business is gaining traction.

The company reported a 151% YoY revenue increase in Q1 and reaffirmed full-year guidance of $157–$177 million in sales.

The key to SoundHound’s growth story is its scalable, high-margin voice AI platform, which is rapidly gaining customers across fast food, healthcare, and automotive sectors.

Clients such as Firehouse Subs, White Castle, and major hospital systems have expanded their deployments, fueling SoundHound’s recurring revenue model.

With over $240 million in cash and no long-term debt, the company is well-positioned to weather volatility as it pushes toward breakeven.

For risk-tolerant investors who believe in the future of conversational AI, SOUN remains a high-beta vehicle for tapping into a multi-billion-dollar addressable market.

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Occidental Petroleum | OXY

Price: $42.63

Occidental has been trading in a tight range ahead of Q2 earnings, but analysts are split on where the stock goes next.

JPMorgan raised its price target to $48 while warning of an “underwhelming” quarter.

They expect EPS of just $0.24 versus the Street’s $0.34 estimate, with weakness likely in the chemical segment and flat-to-down oil production due to Gulf Coast issues.

Still, there are reasons to stay interested.

Occidental has maintained its dividend payout for 52 consecutive years and recently inked a Direct Air Capture deal with ADNOC in South Texas, part of its longer-term strategy to lead in low-carbon energy. 

Operationally, efficiency gains in drilling and frac design have helped reduce capital expenditures (capex) and offset commodity price headwinds.

With oil production poised to rebound in the Permian and a potential contract extension in Oman on the horizon, OXY may surprise to the upside in H2.

Freshworks Inc. | FRSH

Price: $13.91

Freshworks is quietly emerging as a turnaround candidate in the crowded SaaS landscape.

The company is trading at a steep discount after its founder and CEO stepped down earlier this year, passing the reins to Dennis Woodside, an operator with stints at Dropbox and Impossible Foods.

Since the transition, FRSH has focused on larger enterprise clients and AI-infused customer experience tools, winning praise for usability and price flexibility.

Although the stock is down 13% YTD, Freshworks has consistently beaten top- and bottom-line estimates.

It recently reported revenue above $157 million and is sitting on over $400 million in cash, with no debt.

The product suite has drawn comparisons to ServiceNow and Zendesk, but at a fraction of the price, making it an appealing option in today’s budget-conscious IT landscape.

Valuation remains favorable, with the stock trading 40% below fair value on a discounted cash flow basis, according to third-party models. 

If execution continues and AI adoption accelerates, FRSH could see a rerating by year-end. Analysts watching the SaaS rebound are keeping it on their radar.

As Wednesday’s session wraps up, investors are digesting both the June inflation data and the first batch of major earnings.

Tariff effects are beginning to be reflected in core inflation inputs, but services and housing remain relatively stable.

That means the Fed will likely remain cautious, even as markets flirt with new highs.

For investors, the setup remains complicated, but not hopeless.

Companies with operational flexibility, solid balance sheets, or sector tailwinds (like AI or energy) may outperform.

Names like Amcor and Huntington offer defensiveness with income, while more speculative bets like SoundHound and Freshworks hinge on execution.

We’ll be watching the next round of earnings and macro data for clearer signals. In the meantime, this remains a market where selectivity is key.