Anna's Markets Recap

_{Just facts, you think for yourself}

Saturday, 5:06 AM

August 9, 2025

Good morning news friend! Here is a quick recap of what happened in the markets this week. 📰🌟

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What Moved Markets Last Week

The first full week of August was defined by a stark divergence between a policy-fueled rally in the technology sector and mounting evidence of a cooling global economy. While major indices posted gains—the S&P 500 rose 2.4% and the Dow Jones Industrial Average added 1.6%—the tech-heavy Nasdaq Composite surged 3.9%, closing at a record high. This performance was not driven by broad economic strength but by specific government actions that directly benefited mega-cap companies.

Market sentiment was largely shaped by the prior week’s weak July jobs report. The market’s reaction during the week of August 4th reflected a growing consensus that the Federal Reserve would be forced to cut interest rates to support a deteriorating labor market. This expectation, coupled with persistent inflation concerns, created a classic stagflationary environment. The bond market responded accordingly, with the 10-year Treasury yield falling to a three-month low as investors sought safety and priced in a more accommodative Fed. The week’s narrative became a tale of two markets: a real economy showing clear signs of distress, and a technology sector buoyed by targeted political intervention.

Tech and Growth

The technology sector was the week's standout performer, driven by significant, company-specific policy news. On August 6, Apple (AAPL) shares began a powerful three-day surge after CEO Tim Cook announced a $100 billion investment in U.S. manufacturing, which was immediately followed by a presidential statement exempting the company’s chips from new tariffs. The move, which directly de-risked the company from trade-war impacts, sent the stock up 6% for the week.

The semiconductor industry rode the same wave. On August 7, NVIDIA (NVDA) and Broadcom (AVGO) hit record highs after the administration stated that companies committing to U.S. manufacturing would be exempt from tariffs. NVIDIA’s rally was amplified by news that Tesla would increase its use of the company's AI hardware.

Other tech giants posted more modest gains. Microsoft (MSFT) was supported by a positive analyst note on August 6 citing the strength of its Azure platform. Tesla’s (TSLA) volatile week ended higher, as the market viewed the board's August 4 approval of a new $29 billion stock award for Elon Musk as "golden handcuffs" that outweighed the news of class-action lawsuits filed on August 6. In contrast, Salesforce (CRM) shares fell after a regulatory filing on August 4 revealed an insider stock sale by its CEO, compounding investor concerns over recent cybersecurity breaches.

Banks and Financials

Financial institutions faced significant political and economic headwinds. On August 5, shares of JPMorgan Chase (JPM) and Bank of America (BAC) dropped after being singled out in a presidential interview, with the administration threatening an investigation into their "debanking" practices. The market immediately priced in the risk of heightened regulatory scrutiny.

Berkshire Hathaway (BRK.B) stock fell sharply on August 4, reacting to its second-quarter earnings report released over the weekend. The results revealed a 3.8% drop in operating earnings and, most notably, that the company conducted no share buybacks, allowing its cash pile to swell to a near-record $344 billion. The market interpreted this decision to hoard cash as a powerful bearish signal from Warren Buffett on current market valuations and the health of the physical economy.

Consumer Goods and Healthcare

The healthcare sector was dominated by news-driven events. Eli Lilly (LLY) shares plunged 14% on August 7 despite reporting spectacular quarterly earnings. The market completely ignored blockbuster sales of its weight-loss drugs and focused instead on simultaneously released clinical trial data for its experimental oral obesity pill, which investors deemed underwhelming compared to a rival drug.

Regulatory pressures continued to weigh on UnitedHealth Group (UNH). On August 7, the Department of Justice announced it would require "broad divestitures" to resolve its antitrust challenge to the company's planned acquisition of Amedisys, casting doubt on its growth-by-acquisition strategy.

In retail, a defensive rotation into value-oriented names was evident. Walmart (WMT) shares surged over 4% on August 6, and Costco (COST) received a price target upgrade from JPMorgan on August 7. With no company-specific news driving the moves, the performance suggested investors were moving into retailers they believe are best positioned to weather an economic downturn.

Energy and Industrials

Sectors tied to the physical economy responded to the week’s conflicting signals. Exxon Mobil (XOM) announced a significant operational milestone on August 8: the start of production at its fourth offshore project in Guyana, months ahead of schedule. However, the stock’s muted performance reflected the powerful headwind of falling crude oil prices, which undercut the value of the new production.

Uncertainty hit the industrial sector as Home Depot (HD) announced on August 7 that it was withdrawing and refiling its premerger notification for its planned acquisition of GMS Inc. This procedural move, made to give the DOJ’s Antitrust Division more time for review, signaled potential regulatory hurdles for the deal.

Commodities

The clearest signal of rising stagflation fears came from the divergent paths of gold and oil. Gold continued its strong 2025 run, trading above $3,300 per ounce. The rally was fueled by the market’s reaction to the weak jobs data, which solidified expectations for a Federal Reserve rate cut. This tends to weaken the dollar and increase the appeal of non-yielding safe-haven assets like gold.

In sharp contrast, WTI crude oil prices fell throughout the week, dropping below $64 per barrel. The same economic slowdown fears that boosted gold sank oil, as traders anticipated lower future demand for fuel and industrial activity. This classic bifurcation—gold up on monetary easing hopes, oil down on growth fears—encapsulated the market’s core anxiety for the week.

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Baked with love,

Anna Eisenberg ❤️