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Anna's Markets Recap

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Saturday, 5:14 AM

August 2, 2025

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

The Gmail app usually clips the bottom quarter of our emails, we recommend you reading our full article online here.

What do Washington's most powerful insiders know about the market?

In the last 30 days, we’ve seen a flurry of trading activity from Capitol Hill. They aren't just buying index funds. We're seeing targeted buys in major technology and healthcare stocks, and some significant sales.

One senator's spouse sold up to $250,000 of a popular restaurant stock. Another, who sits on the powerful Appropriations Committee, bought shares in Nvidia, Meta, and Amazon. A member of the Armed Services committee sold a major logistics company right before a key vote.

Are these just smart, well-timed trades?

Our latest report breaks down 46 recent transactions from 11 senators and a House member. We list the stocks, the amounts, and the key committees they sit on. See the full analysis and decide for yourself.

Click here to view Full Report [Premium]

What Moved Markets Last Week

The final week of July delivered a stunning reversal to Wall Street, which began the week at all-time highs buoyed by a strong earnings season and ended with the worst weekly losses since May. The S&P 500 set a record close on Monday, capping a six-session winning streak, supported by a strong advance estimate for Q2 GDP that showed 3.0% annualized growth. However, the optimism was shattered on Friday, August 1, by two powerful macroeconomic shocks.

First, the July jobs report profoundly missed expectations, with the U.S. economy adding only 73,000 nonfarm payrolls against a forecast of 106,000. Compounding the miss were massive downward revisions for the prior two months, erasing over 258,000 jobs and suggesting the economy was on weaker footing than previously believed. Second, the confirmation of new trade tariffs, effective August 1, threatened to raise consumer prices and slow consumption.

The market reaction was severe. For the week, the S&P 500 fell 2.4%, the Dow Jones Industrial Average dropped 2.9%, and the Nasdaq Composite declined 2.2%. The CBOE Volatility Index (VIX) spiked over 27%, signaling a sharp increase in market fear. Investors fled to safety, pushing the 10-year U.S. Treasury yield down from 4.44% to 4.21%. While the Federal Reserve held interest rates steady on Wednesday, the weak jobs report sent the probability of a September rate cut soaring to over 84%. Yet, the market sold off heavily, indicating that fears of an economic slowdown had eclipsed the potential benefit of easier monetary policy.

Tech and Growth

The technology sector faced a pivotal week of earnings, where strong individual results were ultimately overwhelmed by macroeconomic fears. The "Cloud Wars" were a central theme, with Microsoft reporting an impressive 39% acceleration in Azure growth, confirming momentum in its AI-driven enterprise services. In contrast, Amazon Web Services (AWS) reported a 17.5% growth rate. While strong, the figure was less than half that of its main rival, causing Amazon’s stock to plummet 8% on Friday as the market punished any sign of relative weakness.

Platform giants also felt the pressure. Meta Platforms delivered blowout Q2 results, with revenue surging 22% on the back of its AI-powered advertising system. The stock initially jumped over 11% in after-hours trading but finished the week down 3%. Similarly, Apple beat estimates with 10% revenue growth, driven by strong demand for its new iPhone 16 lineup. However, the stock fell 2.5% on Friday due to concerns over its exposure to trade tensions and potential tariff impacts. High-growth stocks like Tesla fell approximately 7% on fears that a consumer slowdown would crimp demand for its vehicles.

Banks and Financials

The financial sector was undermined by the dramatic plunge in Treasury yields, which stoked fears of significant net interest margin (NIM) compression. Lower long-term rates directly threaten bank profitability, a headwind that rendered positive company news almost entirely ineffective. JPMorgan Chase and Bank of America both fell despite recent strong earnings and, in Bank of America's case, a new $40 billion share repurchase program and a dividend increase.

Sentiment was further damaged by reports on Friday that Berkshire Hathaway had sold 39% of its massive stake in Bank of America over the prior nine months. The timing of this disclosure, from one of the world's most respected financial sector investors, amplified concerns about the industry's outlook. The major payment networks, Visa and Mastercard, also fell despite reporting robust quarterly growth, as the market discounted their strong backward-looking results and focused on the risk of a future consumer slowdown.

Consumer Goods and Healthcare

The defensive Consumer Staples and Healthcare sectors provided relative shelter from the market storm, though they were not immune to losses. For major retailers like Walmart and Costco, the environment presented a dual threat: while they may attract more customers in a downturn, they are also directly exposed to the inflationary effects of tariffs.

Within healthcare, a clear divergence emerged. Innovation-driven pharmaceutical companies showed strength, with AbbVie raising its full-year guidance on the back of soaring sales for its immunology drugs Skyrizi and Rinvoq. Eli Lilly was a standout performer, rallying 2.4% on Friday against the market downdraft, as investors showed confidence in the non-discretionary demand for its blockbuster weight-loss drugs. In contrast, managed care giant UnitedHealth Group plunged 4.8% on Friday after its guidance pointed to rising medical costs that are pressuring profit margins.

Energy and Industrials

Energy and Industrial firms were caught between strong operational execution and a deteriorating economic outlook. On Friday, Exxon Mobil reported Q2 earnings that comfortably beat analyst forecasts, driven by record quarterly production and significant cost savings. However, the stock’s initial gains faded as the market focused on the weakening commodity price environment.

The industrial sector was weighed down by continued stagnation in the housing market, where high mortgage rates have frozen transaction volumes. For a company like Home Depot, this challenging backdrop was compounded by the weak jobs report, which threatens to curtail spending on large-scale home improvement projects and hurt its crucial "Pro" customer segment.

Commodities

Commodity markets sent conflicting signals, reflecting the week's "risk-off" narrative. Gold rallied as a primary safe-haven asset amid the market turmoil. As investors fled equities and sought to hedge against economic uncertainty, gold prices climbed, finishing the week above $3,300 per ounce. In contrast, West Texas Intermediate (WTI) crude oil fell 1.4% for the week to settle at $66.36 per barrel. The decline was fueled by fears of demand destruction, as a slowing global economy, rattled by the weak U.S. jobs report and trade tensions, would consume less energy.

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Baked with love,

Anna Eisenberg ❤️