Market Recap – Friday, August 1, 2025
US Equities Close Lower Amid Weak Jobs Report and Trade Concerns
Stocks finished the week lower, with major indices logging declines after two consecutive weeks of gains. The S&P 500 and Nasdaq posted losses, while the Dow and Russell 2000 were hit particularly hard, down more than 1% each. Big tech stocks like Amazon and Apple underperformed after earnings reports. Other laggards included energy, banks, and managed care, while sectors such as pharma, housing, and staples fared better.
Trade tensions remained a key theme as President Trump issued new tariff announcements, including a 25% tariff on India and a 50% tariff on copper imports. The market also absorbed the impact of a softer-than-expected July jobs report, which was revised downward for the prior two months. The report, showing only 73K new jobs, added to concerns that the labor market may be weakening. This, along with softer ISM manufacturing data, pushed expectations for a September rate cut closer to 90%.
On the earnings front, big tech was mixed, with Microsoft and Meta showing strength in AI growth, while Amazon's AWS performance underwhelmed. Consumer confidence data for July came in better than expected, though job availability perceptions weakened. The Treasury market saw some movement as rate-cut expectations grew, with yields falling sharply across the curve.
Here’s Our Take
Despite weaker-than-expected economic data, the market’s focus remains on the potential for more aggressive Fed rate cuts, especially after the July jobs report and ISM manufacturing data. The growing likelihood of a September rate cut could offer support to equities, but concerns over tariffs and weaker labor market trends may dampen investor sentiment in the short term. We remain cautious about the impact of ongoing trade uncertainty and are keeping an eye on the upcoming nonfarm payrolls report, which could provide more clarity on the labor market's direction.
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