Everything to Know about Macro and Markets
The S&P 500 (SPX) fell 2.4% last week, snapping a multi-week winning streak and logging its worst weekly drop since late May. Also, the Dow Jones Industrial Average (DJIA) lost 2.9% and the Nasdaq-100 (NDX) slid 2.2%. Weak jobs data, new U.S. tariffs on dozens of trading partners, and Amazon’s (AMZN) unimpressive earnings weighed on investor sentiment.
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Markets Stumble on Weak Jobs Report, Tariffs
The July nonfarm payrolls report showed just 73,000 jobs added, far below the expected 110,000. Also, the unemployment rate rose from 4.1% to 4.2%. In response, Trump fired Bureau of Labor Statistics Commissioner Erika McEntarfer, accusing her of manipulating the data.
Meanwhile, Trump rolled out new “reciprocal” tariffs through executive order. While the U.S. secured trade agreements with the UK, Japan, and the EU, other nations saw steep new rates, ranging from 10% to 41%. Switzerland, for example, was hit with a 39% tariff, while India and Japan saw rates of 25% and 15%, respectively. The new tariffs are set to begin on August 7.
As a result, markets pulled back after a strong run, with investors now facing growing concerns over global trade tensions and a slowing labor market. Still, expectations for Fed rate cuts in September and the prospect of a pending tax bill may offer some relief ahead.
A Big Week Ahead
Trade tensions are back in the spotlight this week as the U.S. moves ahead with import duties set to take effect August 7. Meanwhile, trade talks with China have resumed ahead of a key review on August 12, when a pause in tariffs is set to expire. Any progress or failure could spark sharp market reactions.
Next, all eyes will be on the ISM Services PMI due Tuesday. This report will show how service-sector activity and consumer demand held up in July. The report follows last week’s weak jobs data and may offer further signs of an economic slowdown.
Later in the week, Fed Chair Jerome Powell will speak at the Kansas City Fed’s annual policy forum. Investors will be watching closely for any signals on the timing of future rate cuts.
Meanwhile, corporate earnings remain a key market driver. With over half of S&P 500 companies having reported Q2 results, strong results, especially from big tech, have helped keep stocks near record highs. Reports due next week from Disney (DIS), McDonald’s (MCD), Palantir (PLTR), and AMD could set the tone for the days ahead.
Stocks That Made the News
▣ SoFi Technologies (SOFI) impressed investors with its market-beating second-quarter revenue and earnings. The company raised its outlook for 2025. It now expects net revenue of about $3.375 billion for the full year, above the previous high-end estimate of $3.310 billion.
▣ PayPal (PYPL) stock fell even after delivering better-than-expected second-quarter results. PayPal President and CEO Alex Chriss attributed this to “continued strength across many of our strategic initiatives ranging from PayPal and Venmo branded experiences to PSP and value-added services.”
▣ Microsoft (MSFT) stock soared after the tech giant reported its fiscal fourth-quarter earnings results. The earnings were fueled by rising demand for cloud and AI services. Meanwhile, Meta Platforms (META) also reported strong second-quarter financial results that blew past Wall Street forecasts.
▣ Amazon stock declined even after delivering better-than-expected second-quarter results. The selloff was due to the subdued outlook and lofty expectations from Amazon Web Services (AWS) cloud division, which failed to impress to the extent rival Microsoft (MSFT) Azure did with its June quarter performance.
▣ Exxon Mobil (XOM) gained after the oil giant posted better-than-expected second-quarter earnings. Strong fuel margins and cost controls helped offset lower crude prices.
▣ Chevron (CVX) reported mixed Q2 results, beating on earnings but missing revenue estimates. The company saw weaker oil and gas production but reaffirmed its full-year guidance, pointing to strength in downstream operations.
Upcoming Earnings and Dividend Announcements
The Q1 2025 earnings season is past its peak, but many earnings releases are scheduled for the next few days. Reports in focus this week are coming from Palantir Technologies (PLTR), Hims & Hers Health (HIMS), Advanced Micro Devices (AMD), Lucid Group (LCID), Super Micro Computer (SMCI), Rivian Automotive (RIVN), Energy Transfer (ET), Uber Technologies (UBER), Walt Disney (DIS), and SoundHound AI (SOUN), among others.
Ex-dividend dates are coming this week for Citigroup (C), Blackstone Group (BX), Las Vegas Sands (LVS), Metlife (MET), Eaton (ETN), International Business Machines (IBM), Energy Transfer (ET), Weatherford International (WFRD), and other dividend-paying firms.
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