Daily Newsletter 8/1/25

Strong earnings from Microsoft and Meta allowed investors to momentarily shrug off concerns about U.S. economic growth and warnings of a stock market bubble. Earlier in the trading day, the S&P 500 traded higher despite a hawkish Federal Reserve meeting. However, the financial markets later experienced a choppy session, closing with overall declines despite early gains driven by these robust tech earnings.

This morning's unemployment data for the U.S. shows a slight rise in the unemployment rate to 4.2% in July 2025, up from 4.1% in June. Employers added 73,000 jobs last month, which was below expectations and marked a noticeable slowdown in job growth. Additionally, job gains in May and June were revised downward significantly, indicating a gradual weakening in the labor market. This development raises the likelihood of an earlier Federal Reserve rate cut. However, the Fed will consider a substantial amount of upcoming data before making its decision.

The implementation of several of President Trump's new tariff increases, originally expected to take effect on August 1, 2025, has been delayed to August 7, 2025. This one-week extension applies to many of the reciprocal tariffs on various countries' goods, including notable trading partners. The delay is intended to give affected countries additional time to negotiate tariff agreements or seek reductions before the tariffs officially begin.