It’s been a mixed start to August, a historically weak month for US stocks, on Wall Street. After tanking on Friday, stocks bounced back in Monday’s session, driven by gains in big tech and increasing expectations of interest rate cuts next month.
 

Friday’s Rout

Wall Street took a pummelling at the end of last week, as the market reacted to a renewed tariff blitz from US President Donald Trump and a weaker than expected jobs report on Friday. 

The Dow Jones, S&P 500 and the Nasdaq tumbled during the session by 1.23%, 1.60% and 2.24% respectively. 
 

Tariff Announcement

Late on Thursday, President Trump announced a range of tariffs on US trading partners, just ahead of Washington’s self-imposed deadline of 1 August. These “reciprocal” tariffs range from 10%-41% and will take effect from this Thursday, 7 August. 

Brazil received a “reciprocal” tariff of 10% but was hit with an additional 40% levy in an executive order signed on Wednesday, due to the ongoing prosecution of former president Jair Bolsonaro.  

Similarly, India, which was hit with a tariff of 25%, has been threatened with an unspecified additional duty by the US president over its trade with Russia.
 

US Job Market Slows

Then, before the market open on Friday morning, the Bureau of Labor Statistics (BLS) released its monthly Employment Situation report for July. 

The US economy added fewer jobs in July than had been expected. Furthermore, monthly totals for May and June were both revised downwards by a combined 258,000 jobs.

President Trump subsequently fired the head of the BLS, accusing her, without providing evidence, of manipulating the jobs report “to make the Republicans, and ME, look bad”. 
 

Monday’s Recovery

However, US stocks staged a recovery during Monday’s session as investors appeared to shrug off concerns from the previous week. The Dow Jones, S&P 500 and Nasdaq climbed by 1.34%, 1.47% and 1.95% respectively.

Whilst Friday’s job data signalled weakness in the world’s largest economy, it has fuelled expectations that the Federal Reserve will resume its rate cutting cycle when it meets next month. 

According to the CME FedWatch Tool, traders now see a 90% chance that the Fed will cut rates by 25 basis points at its September meeting. 

Technology stocks helped power Monday’s recovery, as tech giants Alphabet, Meta Platforms and Nvidia all posted gains of more than 3%. 

However, Amazon shares continued to weigh on Wall Street indices, declining 1.44% during Monday's session after tumbling more than 8% on Friday. 

Amazon’s stock market struggles follow the release of its second quarter earnings report on Thursday. Although the e-commerce giant beat expectations on most metrics, investors were disappointed by weaker than expected profit guidance and the fact that its cloud business grew more slowly than those of its competitors.
 

What to Look Out for This Week

On Thursday, the Bank of England (BoE) is widely expected to cut interest rates by 25 basis points, amidst rising unemployment and slowing growth, in what would be the central bank’s fifth cut since last August. 

Meanwhile, earnings season rumbles on. As of Friday, 66% of S&P 500 companies had reported earnings for the second quarter of 2025. Of these, 82% have beaten expectations in terms of earnings per share. 

This week, a further 122 S&P 500 companies are slated to report earnings for Q2, including the following: 

• Tuesday, 5 August: 
  • AMD 
• Wednesday, 6 August:  
  • McDonald’s 
  • The Walt Disney Company 
  • Uber

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