Market Update | August 4th - August 8th

Indexes

After last week's disappointing news, all major indexes rebounded. The S&P 500 gained 2.4%, the DOW rose 1.4%, and the NASDAQ added 3.9% on the week. These gains reflect a growing sense of optimism for a potential interest rate cut in September and the continuation of Mag 7 dominance.

Bonds

U.S. Treasury yields (the annual payment received on a bond, expressed as a percentage) rose throughout the week as investors took into account possible effects of higher tariffs on economic growth and inflation. This was the case for the 2-year, 10-year, and 30-year bonds.

Commodities

The price of U.S. crude oil dropped over 5% this week to the lowest level in more than two months at around $64 a barrel. For reference, it was trading around $75 in mid-June. Gold is current trading at around $3,439 per ounce. At the start of 2025, gold was trading around $2,670. This reflects rising demand among investors for a safe haven amid economic uncertainties. They think that gold will keep its value whereas stocks may fluctuate more heavily.

Events

More Trump Tariffs

On Thursday, the Trump administration implemented reciprocal tariffs impacting imports from many U.S. trading partners. One of the steepest tariffs was a 39% duty on products coming from Switzerland. Additionally, a 100% tariff was introduced on imported semiconductors, but companies that pledge to produce chips within the United States are exempt from this charge.

Growing Expectations for Interest Rate Cut

The well below expected job numbers from last week's report signified a slowing economy. This raised expectations that the Federal Reserve will cut interest rates at their next meeting in September to stimulate it.

Solid Earnings Reports

Approximately 82% of S&P 500 companies reported earnings exceeding expectations, driven by robust performances in the technology sector. This trend has contributed to the ongoing stock market rally.

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Next week, you can look forward to fresh economic data, such as the Consumer Price Index data from U.S. Bureau of Labor Statistics which measures inflation, as well as the University of Michigan's Index of Consumer Sentiment which measures overall feelings about the market going forward. Both will be very impactful. You can expect the CPI data on Tuesday and the U Mich data on Friday.