US Stock Market Weekly Recap: August 1-8, 2025 – Insights from Nexus Wealth Management

The week of August 1-8, 2025, brought a welcome rebound to the US stock market after some earlier volatility, with major indices posting solid gains amid strong corporate earnings and optimistic economic signals. This deeper dive explores both domestic and international equities and fixed income markets, highlighting key drivers, top performers, biggest losers, and actionable takeaways. Whether you're benchmarking your 401k or focusing on long-term financial wellness, understanding these trends can help guide your decisions.

Domestic Equities: A Resilient Rebound

The US stock market showed resilience, closing the week higher across the board. The S&P 500 rose 2.3%, the Nasdaq Composite surged 3.8%, and the Dow Jones Industrial Average climbed 1.3%. This performance was driven by a combination of robust corporate results and positive economic data, offsetting some trade-related concerns.

Strong corporate earnings were a standout factor, with 82% of S&P 500 companies beating analysts' projections by an average of 8.5%. This beat rate reflects continued strength in sectors like technology and consumer discretionary, where AI investments have boosted productivity and innovation. US labor productivity, for instance, rose 2.4% annualized in Q2, meaning workers produced 2.4% more per hour than a year earlier—supporting wage gains and consumer spending without fueling excessive inflation.

The services sector, comprising about 80% of US GDP, also demonstrated strong expansion. The Purchasing Managers’ Index (PMI) for services hit 55.7 in July, marking its strongest growth of the year and the 30th consecutive month of expansion. This indicates robust demand in key areas like tech and finance, contributing to the Nasdaq's outperformance.

Market expectations for Federal Reserve actions added tailwinds, with a 90% probability priced in for a September rate cut. Company-specific news further lifted sentiment: Apple's announcement of a $100 billion investment in US manufacturing, exempt from new tariffs, propelled its shares up 13%, lifting broader indices.

For visual reference, here's a chart of the S&P 500's performance, showing the index's trajectory through August 2025: S&P 500 Chart. You can copy-paste this interactive graph to track daily closes, such as the high of $294.31 on August 8.

Top performers in the S&P 500 for the week included tech giants benefiting from AI momentum and earnings beats. Apple led with its 13% gain, followed by Microsoft (up ~7.5% on cloud computing strength) and Nvidia (up ~6.2% amid semiconductor demand). These stocks capitalized on productivity trends and sector expansion.

On the flip side, biggest losers were often in tariff-sensitive sectors. Ford Motor Company dropped ~4.8% due to concerns over the 25% tariff on imported cars, while Caterpillar fell ~3.2% amid broader industrial worries from escalating trade barriers. These declines highlight how policy shifts can pressure certain industries.

Domestic Fixed Income: Stability Amid Volatility

Fixed income markets provided a counterbalance, with mixed but generally stable performance. The 10-year US Treasury yield edged up slightly to around 4.25% by week's end, reflecting weaker auction demand but tempered by rate cut expectations. Overall, investment-grade corporates and high-yield bonds saw modest gains, with the Bloomberg US Aggregate Bond Index up about 0.5% for the week.

This environment underscores bonds' role in diversification, offering yields around 4% that remain attractive for income-focused strategies. Real yields at decade highs position fixed income well for potential Fed easing, helping mitigate equity volatility.

International Markets: Global Resilience with Regional Nuances

Globally, equities mirrored the US rebound, with the STOXX Europe 600 up 2.1% and Japan's Nikkei rising 2.5%, fueled by strong earnings and trade optimism. Emerging markets like China saw the CSI 300 up 1.2%, supported by 7.2% export growth despite US tariff pressures. However, trade tensions weighed on some regions, with India's markets flat amid 50% tariff hikes on its goods.

In fixed income, international bonds benefited from a weakening US dollar (down 10% YTD), with global aggregates posting ~0.8% gains. European sovereign yields dipped as ceasefire hopes in Ukraine boosted sentiment, while emerging market debt offered higher yields for diversified portfolios.

What Hurt the Markets: Headwinds to Monitor

Despite the positives, challenges emerged. Tariff escalations effective August 7 affected imports from over 60 countries, with rates up to 50% on goods like steel and 25% on cars, raising costs and uncertainty. The ongoing US-China trade war, dating back to 2018, continues as a factor, though markets have adapted somewhat.

Weaker signals included jobless claims rising from 213,000 to 226,000, hinting at labor market cooling, and the services PMI dipping to 50.1 in early August, signaling near-flat growth. Geopolitical tensions, including Middle East escalations offset by Ukraine ceasefire hopes, added volatility.

Key Takeaways for Investors

This week's recap reminds us of the importance of diversification in a global economy. Incorporating domestic and international equities alongside a balanced bond mix can help weather short-term hurdles while capturing long-term growth. For those in Missoula and Montana, reviewing your 401k benchmarking—perhaps through target date funds aligned with your retirement age—ensures your allocation suits your stage of life and risk tolerance.

At Nexus Wealth Management, our local Missoula financial advisory team specializes in personal financial planning, including inheritance planning and tax mitigation, to enhance financial literacy and wellness. Staying invested through market ups and downs, as evidenced by the S&P 500's 9.5% one-year return and 9.8% annualized over 20 years, often yields rewards—a $10,000 investment two decades ago would now be worth about $65,000.

If you're navigating these dynamics, consider reaching out for a personalized consultation. We're here to help build strategies that align with your goals in this evolving landscape.