Dog Days of Summer Produces Sharp Reversal In Stocks This Week- ( $FIG $GLD $MCD $META $MODD $NVDA Rise!)
- Published Aug 01, 2025
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As July closed and the dog days of summer arrived, U.S. equities faced a sharp reversal, punctuating several weeks of bullish momentum with a sobering dose of volatility—a direct consequence of new trade tensions and discouraging labor market reports.
Index Performance
All four major U.S. indices registered notable weekly losses as investor confidence wavered in the face of sweeping new tariff announcements and softer-than-anticipated economic data:
- The S&P 500 slumped 2.4%, closing at 6,287.28 on Friday, enduring its steepest single-day drop since May
- The Dow Jones Industrial Average tumbled 2.9%, down 1,313 points for the week, with cyclical sectors under particular pressure.
- The Nasdaq Composite—often resilient thanks to large cap tech—fell 2.2% to 20,650.13, led lower by a pullback in high-flying growth names.
- The Russell 2000 tracked its large-cap peers, posting a similar loss as heightened risk aversion pushed investors out of more speculative corners of the market.
Macroeconomic Reports
Weekly data reflected mounting economic challenges:
- Employment: July’s nonfarm payrolls increased by only 73,000—far below expectations and the weakest reading in over two years. Previous months were revised sharply downward. The unemployment rate ticked up to 4.2%, amplifying market anxiety about a potential slowdown in hiring and economic growth.
- Federal Reserve Policy: The Fed left its benchmark interest rate unchanged at 4.25%-4.5% for the fifth consecutive meeting, citing “moderate” economic activity, lingering inflation, and greater uncertainty tied to tariffs and labor softness. Policymakers offered no indication of imminent rate moves, instead signaling a data-dependent approach for the remainder of the year.
- Yield Curve: The yield curve remained modestly inverted. The 3-month Treasury bill was at 4.41% and the 10-year Treasury bond at 4.39%, creating a slightly negative slope— a historical harbinger of slower growth, if not outright recession. Recession probabilities over the next year rose slightly to 25.7%. Market participants are still broadly expecting possible Fed cuts later in 2025 given the deteriorating data and tighter financial conditions.
Major Corporate News and Stock Moves
- NVIDIA (NVDA): Shares ended the week at $173.72, up ,13% over the last 5-days, brushing near all-time highs on persistent AI chip demand. NVIDIA’s record-shattering Q2 revenue and forward guidance reinforced its preeminence in the AI sector, even as broader tech swooned.
- Tesla (TSLA):Â Tesla closed at $302.63, down 4.25% over the last 5-days. Reports of a new battery supplier and initiatives to reduce supply-chain exposure to Chinese tariffs were interpreted as strategic positives, but slumping auto demand and tariff uncertainties checked further gains.
- Meta Platforms (META): Meta’s Q2 earnings dazzled, showing 22% revenue growth and 36% profit gains. Shares rose 5.245 over the last 5-days closing at $750.01.
- McDonald’s (MCD): Defensive appeal kept McDonald’s moved shares higher closing at $302.89(+1.48% over the last 5-days). Investors favored its consistent dividend and stable sales, even as questions arose about sector competition and same-store trends.
- Rio Tinto Group (RIO):Â Rio Tinto dropped 5.47% over the last 5-days after reporting a 16% year-over-year earnings decline to $4.8 billion, squeezed by weaker iron ore and minerals pricing, though aluminium and copper divisions outperformed. The miner maintained a notable dividend, reflecting solid cash flows despite industry headwinds.
- Palantir Technologies (PLTR):Â Palantir closed at $154.27, -2.85% over the last 5-days and rains up 103.98% YTD. Investors cheered growing commercial/government AI contracts and robust revenue growth, with additional catalysts anticipated as the company prepares to report Q2 results in early August.
Mergers, Acquisitions & Buyouts
M&A activity remained subdued for S&P 500 constituents, with few headline deals finalized this week. Markets remain watchful for regulatory progress on previously announced transformations, such as the Charter-Cox cable merger and prospective mega-buyouts. No blockbuster acquisitions or buyouts involving index heavyweights were announced this week.
IPO Activity
IPO issuance on the NYSE/Nasdaq continued at a brisk pace, with over 200 deals year-to-date. Highlights this week included:
- Figma, Inc. (FIG) debuted on July 31 at $33 and soared to $115.50 by week’s end (+250%), marking one of the year’s most successful tech IPOs.
- Other new offerings: D. Boral ARC Acquisition I Corp. (BCAR), Shoulder Innovations (SI), and Ambiq Micro (AMBQ), with varying first-day performances.
Trade Policy & Tariff Updates
Trade developments dominated the headlines:
- Tariffs:Â President Trump signed sweeping new tariff orders, including a 35% levy on Canadian imports effective immediately and baseline 10% tariffs on all partners starting in early August. Mexico received a 90-day extension, while South Korea acceded to a new bilateral deal. High-profile copper tariffs and elimination of the de minimis rule for low-value imports intensified trade friction, causing broad commodity and equities volatility.
- The White House’s aggressive stance raises consumer and corporate cost pressures, prompting pushback from business groups. Nevertheless, broader economic fallout remains contained as markets digest the evolving trade landscape.
Commodities & Cryptocurrency
- Gold:Â Rose to $3,416.00/ounce, up +3.23% over the last 5-days. SPDR Gold Shares rose .56% over the last 5-days.
- Silver:Â Finished at $37.105/oz, off 2.42%over the last 5-days.
- Crude Oil:Â Prices weakened on Friday dropping 2.89% closing at $67.26/bbl as supply compensated for concerns over global trade restrictions and recession risks (exact pricing not supplied but trend noted in sector commentary).
- Bitcoin:Â Bitcoin saw outsized volatility & ended lower for the week at $114,265.
Outlook
Markets ended July on an uncertain note, grappling with aggressive tariffs, underwhelming labor data, and the prospect of prolonged policy disruptions. While megacap tech continues to offer bright spots, broader sentiment is cautious with lingering worries about Fed inaction and persistent global economic headwinds. Investors now shift their focus to August’s data releases, FOMC updates, and the critical next phase of U.S. trade negotiations—each poised to influence the market’s direction in the weeks ahead.