August 5th, 2025
Markets Extend Rebound
U.S. equity markets opened slightly higher this morning, continuing yesterday’s strong rally as investors regain confidence following last week’s pullback. Once again, small-cap and tech stocks are leading the gains, buoyed by stronger-than-expected earnings—especially in AI-related names—and growing hopes for Federal Reserve rate cuts.
Technology stocks led early gains, boosted in part by Palantir’s (PLTR) strong results and anticipation ahead of upcoming earnings from Advanced Micro Devices (AMD).
Global markets also added to the positive tone, with European and Asian equities posting gains overnight.
Economic Takeaways:
- In early U.S. trading, the 10-year Treasury yield is up 2 basis points to 4.12%, though it remains near three-month lows after Friday’s bond rally sparked by a weak jobs report.
- The U.S. dollar is holding steady against a trade-weighted currency basket.
- Oil prices are slipping further as traders assess recent OPEC signals and potential signs of slower U.S. growth.
- Following last week’s FOMC meeting, markets were pricing in about 30 basis points of easing by year-end. But after Friday’s disappointing labor report, those expectations have doubled to roughly 60 basis points, with futures now implying a 90% chance of a 25 basis-point cut in September.
- Trump noted that Treasury Secretary Bessent does not wish to be nominated as Fed chair and that no decision on the role is imminent.
Nations Race for Last-Minute Trade Deals as Tariff Deadline Nears; Trump Says ‘People Love the Tariffs’
As Thursday’s tariff deadline approaches, global trade tensions escalated Tuesday with countries scrambling for last-minute negotiations, ongoing confusion surrounding earlier trade commitments, and new signals that a potential deal to delay tariffs on China may be “close.”
Importers worldwide are bracing for impact, with President Trump set to implement a key component of his trade strategy—tiered “reciprocal” tariffs ranging from 10% to 50%—starting Thursday morning.
Despite mounting pressure, Trump has made it clear he intends to move forward without delay. During a Tuesday morning appearance on CNBC, he teased that he’s unlikely to run for president again—though he constitutionally can’t seek a third term—but added that part of the reason he’d want to is because, in his words, “people love the tariffs.”
Not every country shares that sentiment. Switzerland and India, in particular, are navigating very different paths as the deadline looms.
Switzerland’s president is flying to Washington, D.C., today in hopes of securing concessions to avoid a steep 39% tariff on Swiss goods. India’s prospects, meanwhile, appear dimmer. While senior aides to Prime Minister Narendra Modi are traveling this week, they’re heading to Moscow rather than Washington.
Trump, speaking to CNBC, downplayed the possibility of any major compromises with Switzerland. Regarding India, he stated, “we settled on 25% [tariffs], but I think I am going to raise that very substantially over the next 24 hours.”
On the China front, markets are watching closely for developments ahead of a planned tariff snapback on August 12. Trump offered a potentially encouraging update, saying, “We’re getting very close to a deal.”
He also indicated that new sector-specific tariffs—particularly on semiconductors and pharmaceuticals—are on the horizon, noting that pharmaceutical-related tariffs could be announced “within the next week or so.”
President Trump said Tuesday he plans to announce new tariffs on semiconductor and pharmaceutical imports “within the next week or so,” as he looks to expand his use of sector-specific trade measures.
“We’ll be putting a initially small tariff on pharmaceuticals, but in one year — one and a half years, maximum — it’s going to go to 150%. And then it’s going to go to 250%, because we want pharmaceuticals made in our country,” Trump said in an interview with CNBC.
On the Move
- IDEXX Laboratories (IDXX) surged 27.5% on Monday after the pet healthcare company delivered better-than-expected earnings and raised both its profit and revenue forecasts for 2025.
- Palantir Technologies (PLTR) jumped 6% in pre-market trading following a strong earnings beat and an upward revision to guidance. Revenue surpassed expectations, crossing the $1 billion mark for the first time. Deutsche Bank upgraded the stock from Sell to Hold.
- Vertex Pharmaceuticals (VRTX) tumbled 13% before the open despite posting solid quarterly results. The drop came after the company announced its pain drug failed to meet its primary endpoint in a Phase 2 trial and would no longer be pursued.
- Advanced Micro Devices (AMD) ticked up 1.4% ahead of its earnings release later today. The data center division remains a key area of focus after a 57% year-over-year jump last quarter. Comments on U.S.-China trade dynamics may also attract attention.
- Hims & Hers Health (HIMS) dropped 12% in early trading. While EPS topped expectations and Q2 revenue jumped 73%, sales still fell short of analyst forecasts. The company reaffirmed full-year guidance.
- Yum! Brands (YUM) slipped nearly 2% pre-market after missing earnings estimates. While Taco Bell posted 4% U.S. same-store sales growth, Pizza Hut and KFC saw domestic sales declines. Rival McDonald’s (MCD) reports tomorrow.
- Pfizer (PFE) rose 2.4% before the bell, buoyed by earnings and revenue beats, along with improved margins.
- Eaton (ETN) fell more than 2% in early trading, despite delivering results and guidance that largely aligned with expectations.
- Spotify (SPOT) climbed 5% on Monday after announcing it will raise premium subscription prices starting in September.
- Tyson Foods (TSN) gained 2.44% on Monday after exceeding earnings and revenue estimates and boosting its fiscal 2025 outlook.
- Bitcoin (BTC) futures edged higher early Tuesday, recovering from Friday’s losses. After rising nearly 2% Monday, BTC pared back gains to close up 1.42%. Coinbase (COIN) saw a modest 1.11% lift but remains under pressure after Friday’s 16.7% plunge, falling another 2% in early trading today.
What’s Ahead
Investors should brace for a packed earnings slate as several high-profile companies report in the days ahead. On August 6, attention will be on Disney (DIS), Uber (UBER), Shopify (SHOP), AppLovin (APP), DoorDash (DASH), McKesson (MCK), Airbnb (ABNB), and Lyft (LYFT), with results likely to offer insights into the consumer, healthcare, and digital platform trends.
The action continues on August 7, with preliminary Q2 productivity data due alongside earnings from major players across sectors, including Eli Lilly (LLY), ConocoPhillips (COP), Constellation Energy (CEG), Becton Dickinson (BDX), Kenvue (KVUE), Warner Bros. Discovery (WBD), Gilead Sciences (GILD), Block (XYZ), Expedia (EXPE), and Wynn Resorts (WYNN).
Finally, on August 8, Under Armour (UA) is slated to report, wrapping up a pivotal week that could set the tone for the broader market’s next move.
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