| Name | Daily Close | Daily Change | Daily Change (%) |
|---|---|---|---|
| Dow | 43,588.58 | -542.4 | -1.23% |
| S&P 500 | 6,238.01 | -101.38 | -1.60% |
| Nasdaq | 20,650.13 | -472.32 | -2.24% |
| VIX | 20.38 | 3.66 | 21.89% |
| Gold | 3,416.00 | 16.2 | 0.48% |
| Oil | 67.26 | -0.07 | -0.10% |
OVERVIEW OF THE US MARKET
Over the week, the S&P 500 fell about 1.6%, extending a broader selloff driven by disappointing Labour data and new tariffs undercutting investor sentiment.
Most sectors posted losses, reflecting the shift in market tone:
Consumer Discretionary and Information Technology—exposed to tech-heavy megacaps like Amazon, Nvidia, and Meta—led the declines. Amazon slid ~8%, and key tech stocks dropped sharply, dragging both sectors lower.
Financials also softened as weak payrolls and tariffs clouded the economic outlook, increasing pressure on banks and payment firms.
Defensive sectors fared relatively better: Health Care, Consumer Staples, and Utilities outperformed their cyclical, benefiting from safehaven flows amid increasing volatility and recession concerns. While week-specific figures aren’t available, same sectors led gains in Q1 amid cautious sentiment.
Energy, often a laggard due to sensitivity to geopolitical shocks and tariff uncertainty, underperformed again—they posted modest gains earlier in 2025, but were weighed down in this week’s riskoff environment.
In summary, growth sectors (tech, discretionary, financials) were hit hardest, while defensive areas provided relative stability in a turbulent week. Markets look wary, with investor attention shifting toward earnings and Fed expectations heading into September.
Earnings Reports
S&P 500 Q2 Earnings Recap:
As the busiest week of Q2 earnings season concluded, results showed an impressive string of surprises. Approximately 66% of index constituents had reported, with 82% beating EPS expectations and 79% beating on revenue—both above historical averages. The blended earnings growth rate reached 10.3% YoY, up from just 4.9% at the end of Q2, signalling strong upward revisions across sectors.
Tech, Communication & Discretionary drive gains: Information Technology clocked ≈21.1% EPS growth, led by Apple and Microsoft posting notable beats.
Communication Services soared, with over 40.7% growth, thanks to standout performances from Meta and Alphabet.
Consumer Discretionary shifted from negative territory to ~4.8% growth, buoyed by Amazon’s strong EPS beat (~$1.68 vs. $1.33 est).
Financials & Healthcare also showed strength: Financials EPS growth rose to ~12.8%, fueled by beats from JPMorgan, Allstate, Coinbase, Wells Fargo, and Citigroup.
Health Care posted ~3.9% earnings growth, with positive surprises from Bristol-Myers, Regeneron, and CVS driving momentum.
Energy, Materials & Utilities lagged: Energy remains the only sector with YoY earnings decline, while Materials dropped ~5%, and Utilities barely grew (~0.3%) after downward revisions.
Revenue growth also accelerated, rising to ≈6.0% YoY, the highest since Q3 2022. This was led by strong beats in Consumer Discretionary, Health Care, and IT sectors.
In short, solid earnings surprises from mega-cap tech, financials, and consumer names bolstered sentiment, while energy and defensive sectors offered little upside. Analysts now expect continued momentum into Q3, though attention remains on guidance from the largest AI and cloud players.
Big Tech Earnings: AI Winners vs. Legacy Laggards
Q2 2025 earnings showed a sharp bifurcation among tech giants, with AI monetisation emerging as the key differentiator.
Google: AI Powerhouse
Alphabet delivered strong Q2 results:
– Revenue: $96.4B (+14% YoY)
– Cloud: $13.6B (+32%)
– EPS: $2.31 (vs. $2.18 expected)
However, its capex surged to $22.4B in Q2, driving its 2025 AI investment to $85B, mainly for data centres and Nvidia processors. Despite antitrust scrutiny, Google’s AI ecosystem (especially Gemini adoption) is accelerating, making AI a central pillar of its growth strategy.
Tesla: Struggling with Transition
Tesla’s Q2 was disappointing:
– Revenue: $22.5B (-12% YoY)
– Vehicle deliveries: Down 13.5%
– EPS: $0.40 (vs. $0.42 expected)
Revenue from regulatory credits dropped nearly 50%. New delivery bottlenecks emerged after OBBBA-related EV tax credit changes. While an affordable model is coming later in 2025, robotaxi deployment has been delayed until 2026, limiting near-term upside.
AI Execution Is Now Valuation Driver
This earnings season underscores that proven AI monetisation—rather than future promises—determines market valuation. Google’s gains contrasted with Tesla’s declines, illustrating a fundamental shift in investor focus.
The NASDAQ 100’s strength reflects institutional confidence in AI-led growth, with key firms trading above 50-day and 200-day moving averages.
OVERVIEW OF THE AUSTRALIAN MARKET
The Australian equity market slumped on August 1, 2025, as global tariff fears and disappointing US economic data triggered a broad sell-off. The S&P/ASX 200 (XJO) fell 80.8 points, or 0.92%, to close at 8,662.0, just 0.13% above its session low and 0.93% below its high. The broader S&P/ASX 300 (XKO) saw decliners overwhelmingly outnumber advancers by 204 to 70, reflecting a risk-off mood. For the week, the XJO ended nearly flat, down 4.9 points (-0.06%), but 1.3% off its intraweek high.
A combination of fresh US tariff announcements, higher-than-expected US inflation (Core PCE Price Index YY at 2.8% vs. 2.7% forecast), and a sharp reversal in global indices, particularly the Nasdaq (-0.52%), weighed heavily on sentiment. Information Technology (XIJ, -2.38%) and Health Care (XHJ, -1.92%) bore the brunt, with the latter hit by President Trump’s social media pledge to pressure Big Pharma on US drug prices. Local healthcare stocks like Telix Pharmaceuticals (TLX, -4.3%), Nanosonics (NAN, -4.4%), and Polynovo (PNV, -4.3%) suffered, though Resmed (RMD, +1.0%) bucked the trend on strong Q4 earnings.
Utilities (XUJ, +0.70%) was the sole sector to gain, reflecting its defensive appeal. Resources (XJR, -0.22%) held up relatively well despite falling base metals prices, buoyed by a rebound in Mineral Resources (MIN, +4.4%) and gains in lithium and rare earth stocks like Pilbara Minerals (PLS, +4.1%) and Lynas Rare Earths (LYC, +3.2%). White House rhetoric on promoting US rare earth processing likely supported these names.
The AUD/USD edged up 0.11% to 0.6433, but remained near a two-month low, pressured by a strengthening US dollar. Australia’s exemption from higher US tariffs (set at a baseline 10% vs. 60+ countries facing steeper levies) offered little relief amid global uncertainty. Investors awaited the US non-farm payrolls report, which disappointed at 73,000 jobs added (vs. 110,000 expected), potentially influencing Federal Reserve rate cut expectations for September.
AMP’s Shane Oliver noted that July’s strong 2.35% ASX 200 gain left valuations stretched, making markets vulnerable to corrections in August and September. However, he remains optimistic for year-end returns if global risks subside.