Week in Review: August 8 2025

August 11, 2025

Recap & Commentary

Markets ended a busy week higher, aided by tech stocks and Apple which enjoyed its best week since 2020. Beyond tech, investors focused on another wave of corporate earnings, additional trade developments, and President Trump’s nominee for a short-term position on the Federal Reserve’s board of governors following the recent resignation of Fed Governor Adriana Kugler.

During the week, Trump increased tariffs on goods from India from 25% to 50% following its refusal to stop purchasing Russian oil. Trump also said he is considering 100% tariffs on foreign-made computer chips and up to 250% tariffs on imported pharmaceutical in an effort to encourage domestic production of both. To that end, Apple announced it will invest $100B in US manufacturing, bringing its total commitment over the next four years to $600B.

On Friday, Trump nominated current White House Council of Economic Advisors chair, Stephen Miran, to fill a short-term vacancy on the Fed’s board of governors. Miran, known as a sharp critic of the Fed is likely to push for additional rate cuts favored by Trump.

Through Friday, 90% of S&P 500 companies had reported 2Q earnings of which 81% have beaten their consensus estimate. According to industry group FactSet, consolidated S&P 500 earnings growth for the quarter is expected to 11.8%, far better than the 4.9% estimate as of June 30.

This week, investors will be focused on inflation data, particularly CPI, as they seek to better determine the impact of tariffs on consumer prices. Following last week’s disappointing job’s report, market expectations for a September rate cut increased to 90%. Should inflation show signs of accelerating while employment is cooling, it would complicate the Fed’s ability to achieve its dual mandate of maximum employment and price stability.

Economic Commentary

The services sector effectively stalled in July according to industry group Institute for Supply Management. Demand, in the form of new orders, showed little growth while employment contracted for the second consecutive month and fourth time in the past five months. Prices, however, increased at their fastest pace since October 2022, propelled by recent tariffs.

The country’s trade deficit improved in June, declining from $71.7 B to $60.2B, its lowest level since September 2023. Exports were little changed while imports fell ~$12B.  The country’s trade deficit with China fell to its lowest level in more than 21 years, having narrowed 70% over the past five months. On Sunday, Trump said he hoped China would quadruple its soybean imports from the US which he said would substantially reduce its trade deficit with China. Currently, Brazil supplies China with ~71% of its soybean imports, valued at ~$37B. The US supplies ~21%, valued at $12B. In 2016, the US supplied ~37% of China’s total soybean imports.

Weekly jobless claims rose a modest 7K to 226K. Continuing claims, which have been steadily increasing since late 2022, reached their highest level since November 2021, pointing to increasing difficulty for individuals looking for jobs.

Of Note

Tuesday, August 12, is the deadline for the US and China to reach a trade agreement. Many investors and trade experts expect the two sides to announce an additional 90-day extension of current tariffs in order to finalize a deal.

Market Indices (As of 08/01/2025)

• Consumer Inflation (CPI)
• Producer Inflation (PPI)
• Consumer Sentiment
• Retail Sales
• Industrial Production
• Initial Jobless Claims