US Weekly Recap: Dow (2.92%), S&P (2.36%), Nasdaq (2.17%), Russell 2000 (4.17%)
Friday, August 01, 2025 08:12:44 PM (GMT)

• Overview:
  • US equities were lower this week, more than erasing last week’s gains, after reaching new record highs. Breadth was negative with Equal-weight S&P ETF underperforming official one by 93bps. Big Tech was mostly lower though MSFT +2.0% and META +5.2% were standouts. Underperformers included small-caps, copper/aluminum, chemicals, managed care (UNH -15.4%), biotech, apparel, hotels, casinos, bank, and airlines (LUV -10.3%). Outperformers included utilities, interactive media, tobacco (MO +3.2%), discounters, homebuilders, dollar stores, mortgages (FNMA +12.0%), and hospitals.
  • Treasuries were firmer with yield curve steepening. The dollar was stronger on the major crosses ex yen with USD Index up 1.1%. Gold was up 1.9% for the week. WTI crude was up 3.3%. Copper was down 23.3%
• What happened?:
  • Markets pulled back this week as macro growth concerns came back into focus following a disappointing July nonfarm payrolls report and sharp downward revisions to prior months. Some early optimism this week was prompted by some solid Big Tech earnings that reinforced the AI secular growth story along with trade uncertainty removal with deal announcements. However, hawkish comments from Powell midweek weighed on sentiment. While the soft labor data boosted expectations for rate cuts, it also placed greater scrutiny on US growth prospects.
  • Markets spent the week awaiting the 1-Aug trade and tariff deadline. Trump announced a new tranche of tariffs, denting the TACO narrative and shifting focus back to the sharp rise in the effective tariff rate and looming sector-specific tariffs. The new tariffs will take effect in seven days, allowing time for potential negotiations. In other trade developments, the U.S. announced multiple trade deals with the EU, Japan, and South Korea, while the tariff truce with China was extended. Trump also imposed a 25% tariff on India, with additional penalties threatened if India continues purchasing Russian oil. Brazil was hit with an additional 40% tariff, bringing the total to 50%. As expected, Trump agreed to a 90-day extension with Mexico. Additionally, a 50% tariff on copper was announced, effective August 1.
  • Weak nonfarm payrolls was a central focus point amid Fed rate path debate. Headline showed 73K increase in July along with net downward revision of -258K to the two prior months, leaving three-month average payroll growth at just 35K, lowest since 2020. Analyst takeaways regarding Fed implications had some differences, with some seeing rising urgency to cut sooner while others suggest inflation risks still tilted to the upside; Fedwatch odds for a 25bp September cut jumped at ~90% from below ~40% after this morning’s report.
  • Big tech earnings this week were mostly strong. MSFT +2.0%posted impressive revenue and operating income growth, with takeaways centered on Azure’s performance, healthy margins, and strong momentum from accelerated cloud migration. META +5.2% was another highlight, with sales growth accelerating to +22%, driven by AI tailwinds boosting both engagement and ad revenue. AAPL -5.4% beat fiscal Q3 expectations with revenue up nearly 10.5% y/y, supported by strong iPhone sales, outperformance in Greater China, and limited tariff impact. AMZN -7.2% also topped Q2 estimates and noted tariffs haven’t hurt demand, though AWS results were soft with additional focus on margin contraction.
  • The June FOMC meeting drew significant attention due to some hawkish takeaways. Rates were held at 4.25-4.50% as expected, though Governors Waller and Bowman dissented in favor of a 25bp cut. Most analyst focus was on Powell’s press conference, where he offered no signals of a potential September cut. He stated inflation remains slightly above target and the labor market is strong, adding that restrictive policy doesn’t seem to be slowing the economy. Following the conference, odds of a September rate cut dropped to ~40% from ~55% beforehand. Waller and Bowman later explained their dissents, citing possible labor market weakness. Meanwhile, Fed governor Kugler resigned, giving Trump a vacancy on the Fed board.
  • In other news, June core PCE met expectations, though personal spending came in slightly below consensus. Q2 GDP grew +3.0% Q/Q, beating the +2.0% forecast, with personal consumption rising but slightly missing estimates. July ISM Manufacturing was below expectations, as new orders and production improved but employment declined. July ADP private payrolls beat estimates, jobless claims were steady, and June JOLTS came in-line, though the hiring rate fell to a 7-month low. July consumer confidence exceeded expectations, and final July consumer sentiment improved, helped by lower year-ahead inflation expectations. Lastly, the Treasury’s latest Quarterly Refunding Statement kept auction sizes unchanged at $58B for the 3Y note, $44B for the 10Y, and $25B for the 30Y bond.
• Earnings / Corporate highlights:
  • Busy week for earnings with 66% of S&P 500 companies now having reported results. 82% have reported a positive EPS surprise; 79% have reported positive revenue surprise. Blended Y/Y earnings growth rate for the S&P 500 is 10.3%.
  • Notable earnings takeaways: AAPL -5.4%boosted by strong iPhone and China; AMZN -7.2% beat but AWS underwhelmed; MSFT +2.0% driven by 39% Azure growth; META +5.2% benefited from AI tailwind in engagement and ads. MA -1.5%beat and raised on solid dollar volume growth. QCOM -6.4% beat, but handset revenue was light and iPhone share loss noted. UPS –18.4%Q2 EPS and operating income slightly missed; no FY guidance due to macro uncertainty. BA -4.8% beat with improved FCF and growing backlog. MRK -6.4% focus was Gardasil miss; NVO -32.7% pressured by FY guide cut; UNH -15.4% hit by high costs. SPOT -9.5%cited FX and regulatory charges. HOG -2.2% missed but announced KKR/PIMCO partnership. MO -3.2% beat on EPS and revenue. HSY +1.0%topped on early seasonal shipments. SBUX -8.0%NA comps strong, but analysts cautious on outlook. CVNA +10.7% surged after big Q2 beat. F -5.7% flagged tariff and recall headwinds. NCLH +2.8% noted strong demand. CVS +2.9%Aetna momentum in focus after weak peer results. HOOD -4.7% beat on crypto trading strength. RDDT +26.0% rose on steady user growth and ad momentum. MRNA –19.2%beat but cut revenue guidance. XOM -0.6% beat on sold Upstream performance.
  • Beyond earnings, PANW -14.9% announced acquisition of CYBR +9.3%for $25B. NSC -2.7% to be acquired by UNP -2.3%for $85B. GTLS +15.7% to be acquired by BKR -5.5% in deal valued at $13.6B. MSFT +2.0% reportedly offer AI to DoD. JPM -3.1%nearing deal with GS -2.7% to take over AAPL -5.4% credit card. FNMA +12.0% and FMCC +12.2% were up on latest privatization headlines. MODG -17.9% announced CEO resignation and delayed spin-off of Top Golf. FIG rallied on its IPO day.
• Coming next week:
  • Notable macro events: Monday: June Factory Orders; Tuesday: June Trade Balance, July Final Markit PMI, July ISM Services PMI; Thursday: Jobless Claims, Q2 Unit Labor Costs and Productivity.
  • Notable earnings: Monday AM: BRK.B, ON; Monday PM: FANG, HIMS, VAC, PLTR; Tuesday AM: ADM, CAT, DD, GFS, J, LDOS, MPC, MAR, TAP, PFE, YUM; Tuesday PM: AMD, AMGN, DVA, IFF, LCID, MTCH, SMCI, TOST; Wednesday AM: BABA, AMTM, CRL, CHH, MCD, SHOP, UBER, DIS; Wednesday PM: ABNB, APP, BMBL, CACI, DASH, EFL, LESL, LYFT, MET, MNST, OXY, TKO, ZG; Thursday AM: COP, CEG, CROX, DDOG, LLY, H, DNUT, PH, RL, WBD, YETI; Thursday PM: XYZ, EXPE, GILD, GDDY, MCHP, PINS, TTWO, TTD, WYNN; Friday AM: UAA, WEN.
• S&P 500 Sector Performance:
  • Outperformers: Utilities +1.52%, Communication Svcs. +0.01%, Consumer Spls. (1.14%), Tech (1.41%), Energy (1.64%)
  • Underperformers: Materials (5.40%), Consumer Disc. (4.54%), Healthcare (3.86%), Financials (3.75%), Real Estate (3.47%), Industrials (3.35%)

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