How this week's avalanche of news from Washington to Wall Street kept investors guessing
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The S&P 500 closed this past Monday at a record high and then went on a four-session losing streak. Friday.
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investment
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August 2, 2025
04:19 PM
CNBC
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It was a dizzying week on Wall Street
The S & P 500 closed this past Monday at a record high and then went on a four-session losing streak
Friday was particularly unsettling as terrible jobs data slammed the market and triggered President Donald Trump
Trump started the day by slamming Federal Reserve Chairman Jerome Powell for not cutting interest rates on Wednesday
He accused the Fed of cutting rates at the end of last year to help elect Kamala Harris
Later in the day , the president used similar reasoning when firing the head of the Bureau of Labor Statistics, which puts out the employment report
Trump accused BLS Commissioner Erika McEntarfer, a Biden appointee, of negatively manipulating the numbers during his presidency and inflating them before Election Day to help Harris
Also on Friday afternoon, Fed Governor Adriana Kugler resigned
The Biden appointee didn't give a reason
As if all that were not enough, just before his self-imposed Aug. 1 deadline, Trump set new "recical" tariff rates to go into effect on Aug. 7
The president also on Friday ordered two nu submarines "to be positioned in the appriate regions" after a warning to the U.S. from Russian official Dmitry Medvedev
On Monday, Medvedev said that "each new ultimatum" the Ukraine conflict is a "threat and a step towards war" between Russia and the U.S. .SPX .IXIC 5D mountain S & P 500 and Nasdaq performance this week It was no wonder the S & P 500 lost more than 1.5% on Friday, in a session even further pressured by a drop in stocks ing Amazon 's post-earnings stock decline of more than 8%
For the week, the broad market index lost nearly 1%, ending a two-week win streak
The -heavy Nasdaq was the big loser Friday, dropping more than 2.2% on the session and more than 2% for the week
It, too, snapped two straight weekly gains
As bad as the calendar page turn to August was on Friday, the S & P 500 and the Nasdaq wrapped July on Thursday with gains of 2.2% and 3.7%, respectively
The S & P 500 a three-month winning streak, while the Nasdaq ext its monthly run to four straight
It was certainly a busy week, jam-packed with macroeconomic , trade negotiations, a Fed rate decision — and, of course, an earnings onslaught, with four of the Magnificent Seven reporting
Trump trade The week started out with the U.S. on Sunday striking a trade deal with the European Union
South Korea slipped in under the wire before the president's Friday deadline
Both trade partners are now subject to a 15% tariff on exports to the U.S., down from the respective 30% and 25% rates in place prior to the agreements
The deal with the EU will also see the trading bloc purchase $750 billion in U.S. energy, while an additional $600 billion into the U.S
The deal with South Korea included an agreement for $350 billion in U.S. investments
Negotiations with China remain , with the tariff deadline being pushed to Aug. 12
Mexico was granted a 90-day extension of current 25% rates ing a discussion with Mexican President Claudia Sheinbaum
Canada, however, was slapped with a 35% tariff rate
As for the trade partners that have yet to strike a deal, new rates were announced last Thursday evening and are set to take effect this coming Thursday
Weak jobs Just hours after the new tariff rates were announced, the Friday jobs report was released
The July nonfarm payroll growth of 73,000 positions fell way short of the 100,000 additions economists had expected
Worse yet, the June and May readings were both revised significantly lower for a combined 258,000 less jobs than originally reported for those two months
All of that, besides setting Trump off, put a September rate cut back on the table, according to the CME FedWatch tool
The market odds of a cut flipped from 38% on Thursday to nearly 83% on Friday
Shortly after the weak jobs report, Jim Cramer said that while he has been a big backer of Powell, this number says: "You didn't need to wait" to cut rates
Warmer inflation The day after the Fed held rates steady, the central bank's preferred measure of inflation — the personal consumption expenditure (PCE) price index — was released Thursday morning
Both the headline PCE reading, as well as the core rate excluding food and energy prices, came in one-tenth hotter than expected on a year over year basis, seemingly supportive of the Fed's decision to leave rates unchanged
However, the negative jobs data clouds the picture a bit and will force the Fed to weigh the importance of both parts of its dual mandate — maintaining price stability, around their target 2% inflation rate, and fostering maximum employment
The former currently requires more restrictive or higher rates, given that inflation remains above target, while the latter points to less restrictive or lower rates, because central bankers don't want to see any material increases in joblessness
Economic growth Part of the rationale for holding rates steady came from a strong advance second quarter reading on the economy, which was released Wednesday morning just hours before the Fed's July meeting wrapped up
The seasonally adjusted annual GDP growth rate of 3% was much better than the 2.3% advance that was expected
While the economy managed to chug along during the April to June period, despite all the fear and uncertainty caused by trade disputes, it's already August
The GDP is a backwards looking data set
That's why more weight is put on the monthly noted above, relating to inflation and the labor market — and of course, the most real-time source of data we can get, earnings. earnings So, with that, let's take a look at how earnings went this week for the
We heard from Starbucks on Tuesday evening, Meta Platforms and Microsoft on Wednesday evening, Bristol Myers Squibb on Thursday morning, Amazon and Apple on Thursday evening, and Linde on Friday morning
Starbucks : Though the coffee giant reported mixed quarterly results, we heard enough positives to confirm that CEO Brian Niccol's turnaround remains firmly on track
Meta Platforms : The social media powerhouse dered an absolute blow out quarter, with the only thing better than the results being the guidance
Bristol Myers : The drugmaker dered a solid quarterly beat and outlook raise
However, with the Cobenfy narrative — at the core of our investment thesis— going from being pretty straightforward to a show-me story, investors aren't giving the company the benefit of the doubt
We trimmed our price target ing the release
There are also the added questions marks around Trump push this week for lower prescription prices from Bristol and 16 other major drugmakers, including name Eli Lilly, which reports earnings next week
The threat of sector-specific pharma tariffs remains in play
Amazon : Overall the giant reported a solid quarter
However, s sold off as investors took issue with Amazon Web Services (AWS) failing to der the same type of cloud revenue upside as rivals Microsoft Azure and Google Cloud
Operating income guidance for the current quarter was also a bit lower than expected, though that has historically ven conservative
Ultimately, we think the concerns are overblown and think the pullback represents a buying opportunity
Apple : The iPhone maker reported a very respectable quarter
However, when taking into account the price action of the stock this year alongside the reaction to the results, it's that investors are not ready to give management much credit until they der more clarity the company's AI strategy
It was encouraging to hear CEO Tim Cook say he's open to M & A to help with that
Linde : The industrial gas stalwart dered solid quarterly results in a difficult operating environment, demonstrating the company's resiliency no matter the backdrop
Moreover, management raised the low end of its full-year earnings guidance, despite noting that the high end of the range already assumes an economic contraction
It's another important week of corporate earnings ahead, with a quarter of S & P 500 companies set to report
Six companies in the portfolio are on the docket: Coterra Energy , DuPont , Eaton , Disney , Eli Lilly , and Texas Roadhouse
Week in trades It was also a busy week of trades for the portfolio
Kicking off the week, we added to our positions in Cisco Systems and Honeywell
That was ed up by a small trim of Eaton as the stock hit new high
On Tuesday, we locked in a nice fit on Eli Lilly ing disappointing news from Novo Nordisk , its main competitor in the GLP-1 market
We also trimmed our position in Wells Fargo as s finally recovered from their post-earnings decline
On Wednesday, we added to our position in Dover and called out that we would also be adding to our stakes in Starbucks and Palo Alto Networks , we were not restricted
We'll be keeping a close eye on both in the week to come for an opportunity to step in
Palo Alto the week down nearly 15% on a four-session losing streak after reports of talks and its confirmation of a $25 billion deal to buy CyberArk were not well received by investors
We, however, feel that bundling CybarArk's identity security platform will accelerate Palo Alto's platformization strategy
Rounding out the week , on Thursday, we cut our position in Abbott , in line with prior ary in which we highlighted our concerns the company's exposure to China
We took the raised capital and redeployed it in Capital One Financial as the move we were seeing in the stock didn't reflect the fundamentals we saw when it reported second quarter earnings. (See here for a full list of the stocks in Jim Cramer's Charitable Trust.) As a r to the CNBC with Jim Cramer, you will receive a trade alert before Jim makes a trade
Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio
If Jim has talked a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade
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