August 4th, 2025
Stocks Rebound as Rate Hopes Rise
U.S. stocks bounced back sharply on Monday, recouping losses from last week’s sell-off driven by weak labor data and ongoing trade tensions.
The S&P 500 (^GSPC) gained 1.3%, while the Dow Jones Industrial Average (^DJI) climbed over 400 points, or 1.1%. Leading the rally, the Nasdaq Composite (^IXIC) jumped approximately 1.7%.
Economic Takeaways:
- The 10-year Treasury yield slipped to 4.21%, marking a three-month low.
- Mega-cap tech names are leading the advance, while energy stocks lag behind after oil prices fell more than 2%.
- President Trump said on Monday he will “substantially” raise tariffs on India.
- Over the weekend, OPEC+ announced a major output increase, effectively reversing 2023’s voluntary cuts.
- The labor market remains a focal point after Friday’s jobs report came in well below expectations. The U.S. added just 73,000 jobs last month, missing forecasts for 100,000.
- With earnings season past its peak, 27% of S&P 500 companies have yet to report. So far, Q2 earnings are tracking 8% growth — down from last quarter but twice the 4% forecasted at the start of the season.
- Expectations of a September rate cut rose to 83.4% early Monday, according to the CME FedWatch Tool, from under 40% Thursday.
- President Trump fired Bureau of Labor Statistics (BLS) commissioner Erika McEntarfer late Friday, speculating that the data released was inaccurate.
- Federal Reserve Governor Adriana Kugler said she would step down before her term ends in January.
- Commerce Secretary Howard Lutnick is recruiting CEOs for a potential delegation to join President Trump’s meeting with President Xi, The New York Timesreported, and the passenger list could have market implications.
American Eagle stock jumps 16% after Trump praises Sydney Sweeney ad
American Eagle (AEO) shares surged as much as 16% on Monday after former President Trump publicly praised the brand’s viral ad campaign starring actress Sydney Sweeney.
“Sydney Sweeney, a registered Republican, has the ‘HOTTEST’ ad out there,” Trump posted on Truth Social, the social platform he owns. “It’s for American Eagle, and the jeans are ‘flying off the shelves.’ Go get ‘em Sydney!”
The campaign sparked controversy with its play on homophones — “Sydney Sweeney has great jeans” and “Sydney Sweeney has great genes” — leading to debate over the ad’s intended message.
In response, American Eagle addressed the backlash on Sunday via Instagram, stating: “‘Sydney Sweeney has great jeans’ is and always [has been] about the jeans. Her jeans. Her story.”
UBS: Tariffs Unlikely to Trigger Recession or End Bull Market
As President Trump’s tariff strategy continues to unfold, UBS strategists say the measures are unlikely to derail the economy or halt the ongoing bull market.
“Our base case remains that US tariffs will eventually settle around 15%,” wrote Ulrike Hoffmann-Burchardi, chief investment officer for the Americas and global head of equities at UBS Global Wealth Management, in a Monday morning note. “While this would be the highest since the 1930s, and six times higher than when Trump returned to office, we do not expect it to cause a recession or end the equity bull market.”
Trump has announced a series of trade moves in recent days, including a 90-day reprieve for imports from Mexico and 15% tariffs on goods from the European Union. On Friday, he signed an order raising tariffs on Canadian imports to 35%, while setting a baseline minimum rate of 10% across all trading partners. The new tariffs are set to take effect this week.
On the Move
- Berkshire Hathaway shares are down nearly 3% following an earnings miss and a $3.8 billion write down tied to its Kraft Heinz investment.
- Amazon (AMZN) tumbled 8% on Friday despite guiding for stronger-than-expected revenue this quarter. Investors were disappointed by a softer operating profit outlook and slowing cloud growth.
- Bitcoin (/BTC) fell 3.3%, closing its early July price gap and nearing the $110,000 support level. Crypto-related stocks took a hit: MicroStrategy (MSTR) plunged 8.77%, and Coinbase (COIN) sank 16.7%. However, BTC kicked off the week on a stronger note, climbing back over 1% toward $115,000.
- Blade Air Mobility (BLDE) surged 16% premarket following a Bloomberg report that Joby Aviation (JOBY) is exploring an acquisition; JOBY rose 5%. CommScope (COMM) soared 42% on news it will sell its broadband connectivity unit to Amphenol (APH) for $10.5 billion. APH climbed 4%.
- Exxon Mobil (XOM) slipped nearly 2% despite topping earnings expectations, as revenue fell more than 12% year over year due to lower oil prices. Chevron (CVX) also edged lower after its earnings beat.
- Kodiak Gas Services (KGS) gained 5% premarket after being added to the S&P Small Cap 600 Index.
- Moderna (MRNA) dropped almost 8% even after beating estimates; weak forward guidance weighed on sentiment.
- Opendoor (OPEN) jumped 14% after announcing it had regained Nasdaq listing compliance.
- Spotify (SPOT) rose 3% in early action on reports it plans to raise the price of its premium subscription.
- Steelcase (SCS) surged 45% premarket after announcing it will be acquired by HNI (HNI), which slid 20% on the news.
What’s Ahead
Tuesday brings ISM services data, while Thursday will feature Q2 productivity and weekly jobless claims.
Five Fed officials are slated to speak, likely addressing the implications of recent labor softness.
President Trump also announced plans to nominate a new Fed governor and head of labor statistics in the coming days.
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