Market Perspective for August 3, 2025

Market Perspective for August 3, 2025

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The final few trading days of July were busy. Among the most consequential reports were the ADP and BLS nonfarm payroll figures in addition to the Fed’s July interest rate decision.

On Wednesday, the ADP announced that the economy added 104,000 jobs compared to an expected 77,000. In addition, the job report from June was revised to a loss of 24,000 positions. Also on Wednesday, the Fed decided to keep interest rates in a range from 4.25 percent to 4.5 percent.

Finally on Wednesday, advanced gross domestic product (GDP) figures for the past three months were released. It indicated the economy grew 3 percent during the previous quarter compared to an expected increase of 2.5 percent.

On Thursday, the Core PCE Price Index came out and revealed that prices for most goods increased by .3 percent compared to an expected .2 percent. This is the Fed’s preferred inflation gauge, and combined with July’s inflation report finding that inflation increased to 2.7 percent on an annual basis, it’s easy to see why the Fed stood pat. Unemployment claims data was also made public that day and found that 218,000 people made requests for benefits compared to an expected 222,000.

On Friday, the BLS nonfarm payroll report came out and found that 73,000 jobs were added during the month of July. This was below the 106,000 positions analysts believed had been added during that period. It’s worth noting that the June figure was revised downward to just 14,000. The BLS also revised May’s figure downward to 19,000.
The unemployment rate ticked up to 4.2 percent while monthly average hourly earnings rose by .3 percent, and each of those figures was in line with expectations. Later Friday morning, the ISM Manufacturing PMI came in at 48 compared to an expected 39.5.

At the close of trading Friday, the S&P 500 stood at 6,238, which was a loss of 155 points or 2.44 percent over the last five trading days. On Tuesday, the market made a high of 6,402 before remaining flat most of the week. However, on Friday, the index took a nosedive and made a low of 6,214.

The Dow was also off this week, closing down 2.77 percent to finish at 43,588. This was a loss of over 1,200 points for the market that made its weekly high on Monday and weekly low on Friday. The weekly high was 44,932 while the weekly low was 43,440.

Finally, the Nasdaq followed the other two major indexes lower and closed out the week at 20,650. This was a loss of 2.43 percent or 515 points for the tech-heavy market. On Thursday, the index made a high of 21,394 before reversing and making a weekly low of 20,569 on Friday.

In international news, the Bank of Canada announced that the country’s key interest rate would remain at 2.75 percent. On Thursday night, the Bank of Japan announced that the nation would also retain the status quo by keeping its interest rate at just below .50 percent.

The upcoming week will surely be another interesting one as tariffs are set to take effect for many countries. The ISM Services PMI will be released on Tuesday while unemployment claim numbers are set to be released Thursday as usual. International traders will want to keep an eye out for Great Britain’s next rate decision, which is scheduled to be released on Thursday morning.

Market Perspective for July 27, 2025

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The final full week of July was another interesting one, although scheduled news releases was limited. A massive trade deal with Japan as well as continuing his feud with Jerome Powell gave market participants something to follow this week.
Thursday saw the release of the weekly unemployment claims. Over the past seven days, there were 217,000 claims for unemployment benefits compared to an expected 221,000.

Also on Thursday, the Flash Services PMI came in at 55.2, which was higher than the projected 53 and exceeded last month’s 52.9. The Manufacturing PMI came in at 49.5, which was lower than the projected 52.7 and was lower than last month’s figure of 52.9. Ultimately, this shows the manufacturing sector is still stuck in a rut while demand for services continues to grow.

Perhaps the biggest piece of news was the announcement of a long-awaited trade deal between the United States and Japan. While the terms vary, it’s believed that Japan will face a tariff rate of 15 percent on most items with the main exception being vehicles. President Trump stated the country will also invest $550 billion into the United States. However, Japan has said that they agreed to invest $400 billion and will go as high as $550 billion.

This coming Friday paused tariffs are set to go into effect. All nations will pay at least 10 percent with others paying additional levies of up to 50 percent. Although Trump said there will be no additional delays, it’s unclear whether that statement holds up over time. Most on Wall Street believe that tariffs won’t cause a significant amount of inflation and that their long-term impacts have already been priced into the market.

It also appears Jerome Powell is staying on as Fed Chair until his term ends in May. It was Trump himself who appointed Powell in 2017, but he has been at odds with him over interest rate policies. It’s been speculated that making a change at the top of the Fed before May could cause significant market turmoil.

The S&P 500 finished the week up 1.29 percent to close at 6,388, which is an all-time high for the index. It made its low of the week on Tuesday morning when it dipped to 6,295. It would then reverse and continue to climb over the next several days before hitting a high of 6,393 on Friday.

The Dow finished the week higher by 1.13 percent to close at 44,901 at the end of trading Friday. For the week, the market dipped as low as 44,346 on Monday and peaked at 44,970 on Wednesday.

The Nasdaq closed the week .74 percent higher to close at 21,108. The index followed a similar path to the S&P making its low of the week on Tuesday before reversing and closing near its high over the past five trading days. Tuesday saw the market dip to 20,795 while the high of 21,153 came on Friday morning.

The upcoming has several important news events on the calendar. Wednesday will be an especially hectic one for traders as the ADP nonfarm payroll report comes out in the morning. That afternoon, the Fed makes its July rate decision. Advance GDP figures will also be released on Wednesday. The Core PCE Price Index is scheduled to be released on Thursday. On Friday, the Bureau of Labor Statistics (BLS) unveils its own version of the June nonfarm payroll report.