Market Recap – Wednesday, August 6, 2025
Tech Rally Powers Markets Higher Despite Trade Jitters
Stocks ended mostly higher today, with the Nasdaq gaining 1.2% and the S&P 500 rising 0.7%, thanks in large part to a strong showing from Big Tech. Apple, Tesla, and Meta all posted solid gains, lifting the overall market even as smaller and more economically sensitive names lagged. The Dow rose 0.2%, while the Russell 2000 inched up just 0.2%, reflecting underperformance from small-caps and retail favorites.
Beyond tech, winners included networking and IT equipment, staples retailers, apparel, and fast food stocks like McDonald’s, which impressed with solid earnings. On the downside, pharma and biotech names, regional banks, and semiconductors fell. Meanwhile, gold held steady, oil declined for a fifth straight day, and Bitcoin rose 1.4%. Treasury yields moved slightly higher at the long end of the curve, and the U.S. dollar dipped 0.6%.
There wasn’t a major economic data release today, but Fed official Neel Kashkari added to the recent chorus of dovish comments, pointing to the need for the Fed to respond to a slowing economy. That helped keep the “buy-the-dip” sentiment alive, even as longer-term concerns about higher rates and sluggish economic growth linger.
On the earnings front, results remained a key driver of stock moves. Shopify soared on strong sales and margin growth, Arista Networks jumped after a major beat driven by AI demand, and New York Times rose on better-than-expected ad and subscription revenue. On the flip side, AMD fell after its AI chip performance underwhelmed versus sky-high expectations, and Snap dropped sharply after missing revenue targets and warning of slowing ad growth. Also in focus: Apple announced a $100B increase in U.S. manufacturing investment, while OpenAI is reportedly in talks for a private share sale valuing the company at $500B.
In geopolitics, Trump imposed an additional 25% tariff on India, citing its ties with Russia. While the market brushed it off today, trade tensions remain an undercurrent that could resurface.
Here's Our Take
Markets are grinding higher, led by Big Tech, even as warning signs start to stack up. While earnings have been surprisingly strong — with over 80% of S&P 500 companies beating estimates — gains have been concentrated in a few names. Broader participation remains limited, and underwhelming results from companies like AMD and Snap show the risk of overly optimistic expectations, especially around AI.
The Fed’s dovish tone and talk of rate cuts continue to support bullish sentiment, as does the recent wave of corporate buybacks, AI investment momentum, and M&A activity. But concerns around tariffs, a softening labor market, and higher long-term yields warrant caution. We're watching for signs of rotation beyond tech, and we remain focused on earnings quality and macro resilience heading into the back half of Q3.
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