August 4th Market Overview

Happy Monday

Trump fired the head of Labor Statistics, and a Fed governor unexpectedly resigned, which the markets apparently see as wins that outweigh one weak jobs number. The Dow gained over 500 points as traders bet that solidified policy changes and rate cuts are coming sooner rather than later.

Let's dig in...

Market Summary

Markets Bounced Back Fast 
The Dow gained over 500 points as investors decided policy changes matter more than one weak jobs report. The VIX dropped sharply as traders bet on September Fed cuts after Friday's disappointing 73,000 jobs number.

Key Personnel Changes
Trump fired BLS Commissioner Erika McEntarfer, signaling major changes to how economic data gets collected. Fed Governor Adriana Kugler's surprise resignation gives Trump an unexpected chance to reshape monetary policy sooner than expected.

Earnings Season Highlights
 Wayfair $W ( ▲ 0.42% ) delivered a huge earnings beat while American Eagle Outfitters $AEO ( ▼ 1.0% ) got the Trump social media boost. Tesla $TSLA ( ▲ 1.39% ) approved Musk's $24 billion stock award ahead of Palantir $PLTR results after the close.

Trade Pressure Eases Slightly 
The EU paused retaliatory tariffs for six months while Switzerland offered to negotiate better terms after getting hit with 39% tariffs. Thursday's deadline still matters for several countries.

Market Overview

U.S. Stock Indexes, This Week so Far

Stock Spotlight

American Eagle Outfitters $AEO ( ▼ 1.0% ) became the day’s standout mover after President Trump praised the retailer’s controversial Sydney Sweeney campaign as the “hottest ad out there” on Truth Social. The Trump endorsement effect proved powerful once again.

Wayfair $W ( ▲ 0.42% ) delivered one of the quarter’s biggest earnings surprises, reporting 87 cents per share versus 33 cents expected on revenue of $3.27 billion against $3.13 billion forecasts. CEO Niraj Shah called it the strongest revenue growth since early 2021.

Palantir Technologies $PLTR ( ▼ 1.77% ) hit fresh all-time highs ahead of after-hours earnings, riding momentum that’s delivered over 500% gains in the past year. The data analytics company reports results today after market close.

Figma $FIG ( ▼ 4.11% ) gave back roughly a quarter of its value after last Thursday’s blockbuster IPO debut. The design software company had tripled on its first trading day, making some profit-taking inevitable.

Big Name Updates

Tesla $TSLA ( ▲ 1.39% ) board approved a 96 million share restricted stock award for Elon Musk valued at approximately $24 billion. The CEO can’t sell or transfer vested shares for five years except to cover taxes. Separately, Tesla delivered 67,886 China-made EVs in July, down from the previous year, though Musk teased robotaxi expansion to Chicago pending safety testing.

Berkshire Hathaway $BRK.A ( ▲ 0.11% ) posted operating earnings decline as Warren Buffett’s conglomerate warned that steep U.S. tariffs could hurt its businesses. The company specifically cited uncertainty from “developing international trade policies and tariffs.”

Boeing $BA ( ▼ 1.21% ) defense workers launched their first strike in 29 years, creating another challenge for the aerospace giant’s fragile turnaround efforts.

Apple $AAPL ( ▼ 0.3% ) is reportedly building its own AI-powered “answer engine” designed to pull information from across the web. The internal team is called “Answers, Knowledge, and Information” and could enhance Siri or launch as a standalone application.

Other Notable Company News

ON Semiconductor $ON ( ▼ 1.1% ) beat Q2 expectations with 53 cents per share earnings and $1.47 billion revenue, but third-quarter guidance disappointed investors expecting stronger numbers.

Tyson Foods $TSN ( ▼ 1.29% ) raised full-year revenue guidance after beating Q3 estimates, citing increased production expectations for chicken and other meat products.

Spotify $SPOT ( ▼ 0.65% ) announced Premium price increases starting September across Europe, South Asia, Latin America, and Africa, raising monthly fees from €10.99 to €11.99.

Sector Watch

Bond Market

The 10-year Treasury yield edged lower to 4.204% as traders positioned for potential Fed easing following Friday’s employment disappointment.

• Corporate credit spreads tightened as recession fears faded
• Bank of America strategists maintain that “recession risk remains low”
• Gold climbed on rate cut speculation, hitting one-week highs

Policy Watch

Trump's Washington overhaul accelerated this week with two key appointments promised. He'll name replacements for both BLS Commissioner Erika McEntarfer and Fed Governor Kugler by Friday. The Fed pick could signal his long-term monetary policy direction.

Trade developments provided some relief:

• European Union suspended planned retaliatory tariffs for six months, buying time for negotiations

• Switzerland signaled willingness to offer better trade terms after getting hit with a 39% tariff rate

• Thursday's deadline still looms for multiple countries facing Trump's trade ultimatum

Trump kept pressure on other fronts, renewing threats against India over Russian oil purchases while behind-the-scenes negotiations continue across multiple countries.

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What to Watch

Palantir Earnings After Close
The data analytics company reports today with the stock trading at all-time highs following a massive run over the past year. Revenue growth and AI-related commentary will be key given the premium valuation.

Thursday’s Trade Deadline
Multiple countries face Trump’s tariff ultimatum with negotiations ongoing. Any breakthrough deals or escalations could move markets significantly given the elevated uncertainty around global trade policy.

Fed Appointments This Week
Trump promised to name both a new BLS commissioner and Fed governor by week’s end. The Fed choice could signal his long-term monetary policy direction and potential strategy for replacing Jerome Powell.

September Fed Meeting Expectations
Markets are increasingly pricing aggressive rate cuts. Any economic data or Fed communication that challenges this narrative could trigger volatility similar to Friday’s initial reaction to the jobs report.

Thanks for reading 🙂

- John