Anna's Markets Recap

_{Just facts, you think for yourself}

Saturday, 5:15 AM

July 12, 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 week presented a study in contradictions as powerful, forward-looking narratives about artificial intelligence clashed with unsettling economic data. Stocks hit record highs mid-week. The week began on a sour note, with the S&P 500 falling 0.8% on Monday over renewed trade tensions. However, a wave of fierce optimism around AI reversed these losses, propelling the Nasdaq to an all-time high of 20,611.34 by Wednesday and the S&P 500 to a record 6,280.46 on Thursday. Both indices pulled back on Friday, with the S&P 500 closing the week at 6,259.75 and the Nasdaq finishing down at 20,585.53.

The market's volatility was rooted in a confusing economic picture. While Q1 GDP data confirmed a 0.5% contraction, the more recent June jobs report showed a resilient labor market, with the economy adding 147,000 nonfarm payrolls, beating forecasts. This divergence created a policy dilemma for the Federal Reserve, complicating the outlook for interest rates and fueling investor anxiety.

Tech and Growth

The technology sector was the epicenter of the week's drama, driven by narratives of AI dominance and regulatory pressure.

NVIDIA (NVDA) cemented its status as the leader of the AI revolution, briefly touching a historic $4 trillion market capitalization on Wednesday. The surge was driven by the ongoing AI arms race among tech giants, who are funneling billions directly to NVIDIA for its essential GPUs, positioning it as the primary hardware supplier for the AI boom.

Tesla (TSLA) experienced extreme volatility. Shares plunged 6.8% on Monday after CEO Elon Musk announced a new political party and new legislation eliminated key EV tax credits. However, the stock staged a remarkable reversal, erasing all losses by the end of the week. The recovery was fueled by bullish investors who looked past the near-term headwinds to focus on the long-term narrative of Tesla as an AI and robotics company.

Amazon (AMZN) gained momentum as it expanded its signature Prime Day sales event from two to four days (July 8-11). For investors, the move signaled an aggressive strategy to maximize revenue and served as a powerful potential catalyst for third-quarter earnings.

Meta (META) underperformed, falling 1.3% on Friday amid intensifying regulatory pressure in the EU. The company faces the threat of significant daily fines over its "pay-or-consent" model, creating a financial and valuation overhang for the stock.

Alphabet (GOOGL) gained over 1% on Friday, bolstered by a narrative that the company is an undervalued AI investment. Strong growth in its Google Cloud division and the successful monetization of its "AI Overviews" feature in Search supported this view.

Banks and Financials

The financial sector broadly underperformed as investors grew cautious ahead of a crucial earnings season, reflecting anxiety about the impact of conflicting economic signals on bank profitability.

JPMorgan Chase (JPM) and Bank of America (BAC) saw their shares decline as investors took a risk-off approach, unwilling to place big bets ahead of their quarterly earnings reports scheduled for the following week.

Visa (V) and Mastercard (MA) shares fell despite the dismissal of a major antitrust lawsuit related to Apple Pay fees. The positive legal news was completely neutralized by overriding market fears that an economic slowdown would curtail consumer spending—the lifeblood of their revenue.

Berkshire Hathaway (BRK.B), a proxy for the broader U.S. economy, saw its shares decline to their lowest level since April. The drop was not tied to specific company news but to widespread uncertainty stemming from conflicting economic data and tariff risks.

Consumer Goods and Healthcare

A sharp divergence emerged within these traditionally defensive sectors, as the market rewarded innovation while punishing companies facing near-term operational challenges.

Eli Lilly (LLY) was a standout performer, rallying after announcing a deal worth up to $870 million to develop long-acting versions of its blockbuster GLP-1 drugs for obesity. The move was seen as a proactive strategy to defend its market leadership.

UnitedHealth Group (UNH) came under pressure from concerns about rising medical costs. Downward revisions to consensus earnings estimates fueled anxiety that margin pressure would impact profitability.

Walmart (WMT) faced a significant product safety issue, recalling 850,000 water bottles after reports that ejecting lids caused serious injuries. The recall created a significant reputational challenge for the retail giant.

Energy and Industrials

Performance in this sector was split, reflecting the different forces acting on companies tied to global commodities versus those linked to domestic consumer activity.

Exxon Mobil (XOM) had a strong week, with its stock rising over 3.8%. The move was driven by climbing crude oil prices and reports that the company was in talks to sell its Singapore fuel retail business in a deal valued at around $1 billion, signaling a disciplined portfolio strategy.

Home Depot (HD) faced headwinds after a competitor, LL Flooring, filed for bankruptcy, serving as a warning about the weakening health of the housing and remodeling markets. The company also faced a planned nationwide boycott over changes to its DEI initiatives.

Commodities

Gold prices served as a real-time barometer of investor anxiety. The precious metal started the week strong, hitting $3,337 per ounce as traders sought a safe haven from trade tensions. However, the price retreated mid-week as the dollar strengthened on the back of resilient jobs data. Gold's movement captured the market's core conflict: its price was supported by geopolitical risk and the potential for an economic slowdown, but capped by signs of labor market strength that could keep the Federal Reserve from cutting interest rates.

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Baked with love,

Anna Eisenberg ❤️