Everything to Know about Macro and Markets
Stocks closed the week firmly in the green after Friday’s rally flipped the previous days’ losses to gains. The Dow Jones Industrial Average (DJIA) surged 1.53%, notching a fresh record high, while the S&P 500 (SPX) logged in a 0.27% weekly gain after its best day since May. The tech large-cap benchmark Nasdaq-100 (NDX) was down 0.90% for the week, despite Friday’s surge, as the previous five-day sell-off in AI names took a toll.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
Rotating Currents
Throughout the down streak, headlines were flashing a “rotation” narrative, with investors taking interest in defensive trades along profitable – and slower-growing – names trading at more sustainable multiples, driving DJIA’s outperformance over that period. However, some analysts warned that it is too early to call a change, because the traditional anti-bull sign – outperformance of consumer staples – was visibly missing over the red market days, while the VIX index remained at historically low levels. These and other signals prompted Goldman Sachs to advise buying the dip in momentum stocks.
Friday has shown that these bullish voices were right, as investors rushed in to buy the dip – even where a dip had not meaningfully occurred – after Powell signaled a potential change in monetary policy. While the Fed Chair didn’t commit to rate cuts outright, noting that “short-term risks to inflation are on the upside,” he acknowledged that the balance of risks was shifting in a way that “may warrant” less restrictive monetary policy. Stock markets interpreted this as a green light to keep the rally going.
Stocks That Made the News
▣ Nvidia (NVDA) has halted H20 AI chip production as Beijing intensifies pressure on domestic tech groups to forgo U.S. processors, citing security and compliance risks. The H20 chip – currently the most advanced Nvidia product allowed under U.S. export controls – remains central to China’s AI ambitions, powering platforms at Alibaba, Tencent, Baidu, DeepSeek, and ByteDance, though Chinese alternatives are gaining ground. Current H20 inventory is constrained, and Nvidia instructed its suppliers – including TSMC, Samsung, Amkor, and Foxconn – to cease production while it awaits updated U.S. export approvals. Nvidia and AMD have agreed to pay the U.S. government a 15% share of sales revenue from these chips to secure export licenses. Regulatory scrutiny is mounting from both sides, with U.S. lawmakers arguing the H20 enables China’s AI and military advancements.
▣ Meta Platforms (META) has signed a cloud computing deal with Alphabet’s Google (GOOGL) valued at over $10 billion, marking a significant partnership between the two tech giants. Throughout the six-year agreement, Meta will utilize Google Cloud’s servers, storage, networking, and other services to support its growing infrastructure needs, signaling a major win for Google in the competitive cloud market. This deal follows a similar agreement Google recently made with OpenAI. Google’s cloud business has seen strong growth, with a 32% jump in second-quarter revenue, benefiting from these large-scale AI partnerships. Meanwhile, Bloomberg reported another probable win for Google – Apple (AAPL) plans to use Google’s Gemini AI to power an overhauled Siri voice assistant, after struggling to catch up on generative AI developments.
▣ Palantir (PLTR) shares tumbled following a critical report from prominent short seller Citron Research, which flagged concerns over the stock’s valuation being detached from fundamentals. Despite Palantir’s strong growth – recently surpassing $1 billion in quarterly revenue, driven by AI demand and government contracts – the stock’s extremely high valuation multiples raised worries about a potential bubble. This triggered profit-taking and a correction amid broader tech sector weakness, fueled by skepticism over the sustainability of the AI rally. Citron argued that if Palantir traded on a comparable price-to-revenue multiple as OpenAI, its fair value would be closer to $40 per share, far below current levels. Palantir’s price decline marks its longest losing streak since April 2024, reflecting heightened volatility despite its robust fundamentals.
▣ Intel (INTC) rallied after President Donald Trump said the embattled chipmaker has agreed to give the U.S. government a roughly 10% position in the company in a deal that would convert grants under the CHIPS Act – which have been extended but not yet paid – into an equity stake. The potential for such a deal was first reported a couple of weeks back. Earlier last week, Intel also disclosed the upcoming sale of a $2 billion stake to the Japanese tech giant SoftBank.
▣ Conversely, Micron (MU) and Taiwan Semiconductor Manufacturing Company, or TSMC (TSM), rallied after the Trump administration denied rumors that it would be seeking an equity stake in either company in exchange for funds received under the CHIPS Act. The U.S. government is not planning to take stakes in large, established chipmakers that are increasing their U.S. production.
▣ Target (TGT) beat revenue and EPS estimates but saw a sharp stock decline due to underlying business concerns. Comparable sales fell year-over-year, with fewer customer transactions and lower average transaction values. Investors were also disappointed by the announcement of leadership changes and the ending of the partnership with Ulta Beauty, which had been a traffic driver. Additionally, the company reaffirmed guidance for a low single-digit sales decline in 2025, signaling ongoing challenges in its turnaround efforts.
▣ Walmart (WMT) also disappointed investors as EPS fell short of expectations, marking the retail giant’s first quarterly miss since 2022. Revenue came above estimates and U.S. same-store sales posted healthy growth, but operating income dropped, hurt by legal and restructuring charges. The company’s full-year profit outlook was on the cautious side, contributing to a stock decline post-release. However, the retail giant continued to gain market share over the quarter, winning it from peers including Target.
Upcoming Earnings and Dividend Announcements
The Q2 2025 earnings season is winding down, but several notable releases are still scheduled for this week.
The highlight of the week – and for many investors, of the entire earnings season – will be Nvidia’s (NVDA) earnings release, scheduled for Wednesday, August 27. The company’s results – and even more so, its guidance – carry significant implications for the market, especially amid recent investor concerns about high valuations in AI-related stocks.
Other noteworthy earnings releases this week include MongoDB (MDB), Okta (OKTA), CrowdStrike (CRWD), Snowflake (SNOW), Veeva Systems (VEEV), Agilent (A), HP (HPQ), Pure Storage (PSTG), Nutanix (NTNX), Dell Technologies (DELL), Marvell (MRVL), Autodesk (ADSK), Lululemon Athletica (LULU), Ulta Beauty (ULTA), and Dick’s Sporting Goods (DKS).
Ex-dividend dates are coming this week for LyondellBasell (LYB), Atmos Energy (ATO), Skyworks Solutions (SWKS), Johnson & Johnson (JNJ), NextEra Energy (NEE), Dow Inc (DOW), Kraft Heinz (KHC), Tyson Foods (TSN), among other dividend-paying firms.
For additional exclusive market insights and content from TipRanks Macro & Markets research analyst Yulia Vaiman, click here.