Volatility Returns: Tariffs, Earnings & Mixed Signals
Week Ending August 1, 2025
Markets pulled back sharply last week as investors digested stalled trade talks, new U.S. tariffs, and a flood of economic data. Despite a strong GDP reading, mixed earnings and inflation concerns weighed on sentiment.
Market Overview
Weekly Market Performance (July 28 – August 1)
- S&P 500: –2.36%
- Nasdaq Composite: –2.17%
- Dow Jones Industrial Average: –2.92%
- MSCI EAFE (International Developed Markets): –2.95%
- TSX (Canada): –1.89%
Action-Packed Week
Markets started the week on uncertain footing, with investors awaiting corporate earnings and the Federal Reserve’s rate decision. A weekend trade agreement between the U.S. and E.U. had little market impact, but tensions ramped up midweek as China negotiations appeared to stall.
The Dow led the market’s retreat, with losses accelerating after the Fed held interest rates steady on Wednesday. While a Q2 GDP report showed a rebound to 3% annualized growth, thanks to strong consumer spending, markets remained uneasy.
On Friday, stocks opened lower and stayed there after:
A softer-than-expected July jobs report
New tariff announcements from the White House
Mixed earnings results from two major tech firms
The PCE Index (the Fed’s preferred inflation gauge) showed a worrisome uptick in core goods prices
Canada & the TSX
The S&P/TSX Composite Index declined 1.89% last week as Canadian markets tracked global weakness. Energy stocks fell on softening crude prices, and financials were weighed down by cautious outlooks. Canadian economic data was lighter than in the U.S., but investor sentiment remains tethered to global trade and monetary policy developments.
Mixed Economic Signals: Growth vs. Inflation
Investors were left parsing a complicated picture:
Economic Growth
Q2 GDP rebounded to 3% (up from Q1’s 0.5% contraction), driven almost entirely by consumer spending.
Business investment slowed, particularly in equipment and structures.
Inflation Concerns
The PCE Index showed an uptick in core goods prices in June.
This reinforced investor concerns that the Fed may resume tightening if inflation persists.
Jobs Report
July’s employment report showed weaker hiring and downward revisions to prior months, suggesting some softening in the labor market.
Key Economic Reports: Week Ahead (August 4–8, 2025)
Monday, August 4
- Factory Orders
- Motor Vehicle Sales
Tuesday, August 5
- U.S. Trade Balance
- ISM Services Index
Wednesday, August 6
- Treasury Buyback
- 10-Year Treasury Auction
- Fed Speaker: Mary Daly
Thursday, August 7
- Productivity & Costs
- Weekly Jobless Claims
- Wholesale Inventories
- Consumer Credit
- Fed Balance Sheet
- Fed Speaker: Raphael Bostic
Friday, August 8
- Fed Speaker: Alberto Musalem
Corporate Earnings: This Week
Monday
- Palantir Technologies (PLTR)
- Vertex Pharmaceuticals (VRTX)
Tuesday
- Advanced Micro Devices (AMD)
- Caterpillar (CAT)
- Amgen (AMGN)
- Arista Networks (ANET)
- Pfizer (PFE)
- Duke Energy (DUK)
Wednesday
- McDonald’s (MCD)
- Walt Disney (DIS)
- Uber (UBER)
- Shopify (SHOP)
- AppLovin (APP)
- DoorDash (DASH)
- Brookfield Asset Management (BAM)
Thursday
- Eli Lilly (LLY)
- Gilead Sciences (GILD)
- ConocoPhillips (COP)
- Constellation Energy (CEG)
“Judge each day not by the harvest you reap but by the seeds you
plant.”
– Robert Louis Stevenson
They can run side by side for thousands of miles; they are made of steel.
While they constantly touch the ground, they seldom meet or touch each
other. What are they?
Last Week's Riddle:A man leaves home and makes three left turns. He comes home again and sees two masked men waiting for him, but he jogs straight toward them with a smile as others cheer. Why is this man so unafraid?
Answer: Because he just hit a home run!
On top of Mount Whistler in Jasper
Footnotes and Sources
1. WSJ.com, August 1, 2025
2. Investing.com, August 1, 2025
3. CNBC.com, July 28, 2025
4. CNBC.com, July 29, 2025
5. WSJ.com, July 31, 2025
6. MarketWatch.com, August 1, 2025
7. WSJ.com, August 1, 2025
8. WSJ.com, July 30, 2025
9. IRS.gov, July 30, 2024
10. Once Upon a Chef, March 18, 2025
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