Stock-Guide

The following is a summary of the latest developments in the US stock market on Monday, August 4, 2025:

1. Review of last Friday's market

• All three major indices fell: The market's concerns about the economic slowdown intensified due to the US July nonfarm payroll data falling far short of expectations (73,000 new jobs, compared to the expected 100,000) and a significant downward revision of the previous figure. The Dow Jones Industrial Average fell 1.23% (43,588.58 points), the S&P 500 dropped 1.60% (6,238.01 points), and the Nasdaq Composite declined 2.24% (20,650.13 points).

• Weekly performance: The S&P 500 fell 2.4% for the week (the worst since May 23), the Dow Jones Industrial Average fell 2.9% (the worst since April 4), and the Nasdaq fell 2.2%.

• Sectors and individual stocks: Technology stocks led the decline, with Amazon plunging 8.27%, Apple and Nvidia falling more than 2%, and Tesla and Microsoft falling more than 1%; Most Chinese ADRs declined, with the Nasdaq Golden Dragon China Index falling 1.82%, while NIO bucked the trend with a 2% gain.

2. Key influencing factors

• Nonfarm payroll data shock: Weak labor market signals have fueled expectations of a Fed rate cut in September, with CME data showing the probability rising to 89.1%.

• Trump's tariff policy: Reciprocal tariffs (with rates ranging from 10% to 41%) have taken effect for multiple countries, intensifying market concerns about inflation and economic pressures.

• Seasonal risks: Historical data shows August is traditionally a weak month for U.S. stocks, with the Dow Jones and S&P 500 often performing poorly.

3. Morning Market Movements

• Limited volatility in U.S. stock futures: S&P 500 and Nasdaq 100 futures are nearly flat, while Dow Jones futures rose slightly by 0.1%. The market is still digesting the nonfarm payroll data and tariff impacts.

• Commodities: Gold rose slightly to $3,363.86 per ounce; WTI crude oil fell nearly 1% to $66 per barrel, as OPEC plans to increase production in September.

4. Other Important Events

• Apple establishes Answer team: Reportedly developing a ChatGPT competitor, which may accelerate competition in the AI sector.

• Federal Reserve personnel changes: Board member Kugler announced his resignation on August 8, which may impact policy continuity.

• Corporate Earnings: Berkshire Hathaway's Q2 net profit plummeted 59%, with cash reserves nearing historical highs, warning that tariffs will impact performance.

5. Market Outlook

Short-term U.S. stocks may continue to fluctuate, with weak economic data and policy uncertainty dominating sentiment. Technology stocks face significant adjustment pressure, but the communication services and healthcare sectors may become rotation focal points. In the medium to long term, attention should be paid to corporate profit resilience and the Federal Reserve's policy path.

Translated with DeepL.com (free version)