Published Friday, August 1 2025, 12:35 p.m. ET
Introduction#
The opening optimism that briefly surfaced on Wall Street fizzled fast after two catalysts punched holes in the risk trade. First came the July non-farm payrolls print—73,000 net new jobs versus 104,000 expected, according to the Labor Department and cited by Bloomberg. Minutes later, the White House confirmed a sweeping 35 % tariff package on a broad array of imports from Canada, Brazil, India and Taiwan. Taken together, the weak labor signal and an aggressive trade salvo have driven a midday retreat into defensives, pushing headline indices firmly into the red while lifting volatility to multi-week highs.
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Market Overview#
Intraday Indices Table & Commentary#
| Ticker | Current Price | Price Change | % Change |
|---|---|---|---|
| ^SPX | 6 229.95 | –109.43 | –1.73 % |
| ^DJI | 43 502.94 | –628.05 | –1.42 % |
| ^IXIC | 20 632.61 | –489.84 | –2.32 % |
| ^NYA | 20 225.79 | –232.65 | –1.14 % |
| ^RVX | 27.59 | +2.92 | +11.84 % |
| ^VIX | 21.33 | +4.61 | +27.57 % |
The S&P 500 is nursing a 1.7 % slide, weighed down by its largest sector—Technology—which accounts for roughly one-third of the benchmark’s market cap. The NASDAQ Composite is feeling the brunt, off more than 2 % as mega-caps from Apple to Nvidia retreat. Meanwhile, the VIX has vaulted above 21 for the first time since early June, underscoring the market’s abrupt shift from complacency to caution. Turnover is also heavy: Monexa AI tallies 1.98 bn S&P prints by midday, already 64 % of a normal full-session volume, indicating institutions are actively de-risking.
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Macro Analysis#
Economic Releases & Policy Updates#
July’s payroll miss was not merely a headline disappointment—its internals were soft: private-sector hiring rose just 55 000, while manufacturing shed 18 000 positions. Average hourly earnings ticked up 0.2 % MoM, below the prior month’s 0.4 %, hinting at easing wage pressure but also at slower income growth. According to Reuters, Fed-funds futures now imply a 76 % probability of a 25-bp rate cut at the September FOMC, up from 48 % yesterday, as traders bet the Fed will lean against a possible growth down-shift.
Tariffs complicate that calculus. New levies land next week and focus on intermediate goods—from steel re-rollers in Canada to semiconductor substrates in Taiwan—raising input costs for domestic manufacturers already battling soft demand. The immediate market takeaway is stagflation risk: weaker employment momentum meets potential price stickiness, a scenario that can handcuff monetary policy.
Global / Geopolitical Developments#
Overnight, Asian bourses absorbed early headlines on the tariff plan, but Europe had to chase U.S. weakness at its open, driving the Stoxx Europe 600 down 1.3 %. Canadian officials, per CBC, threatened to “walk away” from trade-pact talks if the U.S. enforces the 35 % duty. Meanwhile, Moody’s Analytics chief economist Mark Zandi told CNBC that the tariff wave could add 0.4 ppt to core PCE inflation over the next two quarters, a data point that traders circulated widely on trading desks this morning.
Sector Analysis#
Sector Performance Table#
| Sector | % Change (Intraday) |
|---|---|
| Consumer Defensive | +1.13 % |
| Utilities | +0.79 % |
| Healthcare | +0.32 % |
| Basic Materials | +0.22 % |
| Communication Svcs | –1.09 % |
| Industrials | –1.16 % |
| Consumer Cyclical | –1.34 % |
| Technology | –1.44 % |
| Real Estate | –1.45 % |
| Energy | –1.59 % |
| Financial Services | –1.67 % |
Consumer Defensive is today’s clear haven, buoyed by staples such as Costco and Procter & Gamble as investors prefer predictable cash flows. Utilities catch a bid on the same logic, with Dominion Energy up more than 2.6 %. On the flip side, Financial Services is under broad pressure; a 15 % earnings-driven plunge in Coinbase and a 3–4 % fade in money-center banks like Bank of America and Wells Fargo have dragged the sub-index lower.
Technology weakness is surprisingly uniform. Giants such as Microsoft and Apple are softer by roughly 2.3 %, while high-beta names like Arista Networks slump in excess of 5 %. The lone bright spots come from niche hardware: Monolithic Power Systems is up almost 10 % after beating earnings and guiding higher, illustrating that stock-specific fundamentals can still trump macro gloom—at least temporarily.
Company-Specific Insights#
Midday Earnings and Key Movers#
• Energy infrastructure operator ONEOK slipped 3.5 % even after Raymond James upgraded the stock to “Outperform.” Traders appear to be focusing on crude’s $3 pullback rather than the company’s robust expected EPS of $1.33 and 5 % dividend yield.
• Chevron trades only modestly lower (–0.5 %) despite a projected EPS drop to $1.75 from $2.55. Wells Fargo reiterated “Overweight,” citing cost discipline and progress on the Exxon-Mobil arbitration around Hess.
• Staples manufacturer Newell Brands cratered 17 % after guiding lower on tariff-induced cost pressure—an early example of how today’s duties may flow straight into consumer-product P&Ls.
• Biotech is split. Moderna fell 7.6 % after trimming its 2025 sales outlook, while Regeneron eked out a small gain on a 4 % revenue beat driven by strong Dupixent sales.
• In the high-growth corner, Amazon’s 8 % slide stands out. Cloud growth slowed to 10 % y/y—well below the 19 % posted by Microsoft—raising concerns that tariff-linked cost inflation may be colliding with slowing enterprise IT spend.
Extended Analysis#
Intraday Shifts & Momentum#
The market’s tone changed within the first 90 minutes. S&P futures opened flat to slightly positive, reflecting overnight resilience in Asia. Once the labor report hit, short-dated Treasury yields nosedived—two-year notes rallied 12 bp—signalling a dovish shift in rate expectations. Yet equities failed to capitalize because the concurrent tariff news introduced a margin-squeezing narrative: lower rates may not cushion profits if input costs—and uncertainty—multiply.
Breadth is poor: Monexa AI shows 71 % of S&P issues lower, and advancers are clustered in low-beta pockets. Options flow underscores fear: put-call ratios are nearing 1.2, the highest since the June inflation scare. Dealers report concentrated hedging in September S&P 6 000 strikes, which could cap any afternoon bounce.
Momentum turned especially vicious in Financials once Coinbase earnings crossed. Consensus had looked for $1.49 EPS, but the exchange delivered $0.12 as retail trading revenue under-performed. The print stoked concerns that crypto activity—often a bellwether for speculative appetite—may be fading, dragging peer fintechs and even traditional brokers lower.
In Basic Materials, Eastman Chemical’s 21 % collapse is emblematic. Management blamed the tariff regime for cutting export volumes and raising feedstock costs. Ironically, paint maker Sherwin-Williams is up 3.5 % because tariffs spare many of its raw inputs, allowing it to raise final prices with limited competition—a reminder that tariff effects can be highly company-specific.
Commodity price action reinforces the theme. Front-month WTI slid below $75 as traders factored slower global growth, while copper futures gave back 1.8 %. Gold inched higher by 0.6 %, holding $2 030/oz as a hedge against both policy error and geopolitical friction.
Conclusion#
Midday Recap & Afternoon Outlook#
The twin blows of a softer-than-expected jobs report and fresh tariff escalation have jolted equity markets out of their summer drift. Index-level damage is broad but not indiscriminate: Technology and Financials bear the brunt, while Consumer Defensive and Utilities enjoy safe-haven inflows. Volatility is back, and consensus is coalescing around a near-term rate cut—but the very forces that drive that dovish pivot also threaten corporate margins.
Traders will watch the 6 200 level on the S&P 500; a close below may invite systematic selling. Conversely, any constructive commentary from Fed officials this afternoon—or signs that Congress could dilute tariff implementation—might spark a relief bid. Into the close, positioning remains light on the long side and heavy on short-dated hedges, suggesting more choppy price discovery rather than a decisive reversal.
Key Takeaways#
• Defensives outperform as investors prioritize earnings visibility; Consumer Staples +1.1 %, Utilities +0.8 %.
• Volatility spikes: VIX +27 % intraday, signaling a clear demand for downside protection.
• Macro double-hit: A 31 000 payroll miss and 35 % tariffs revive stagflation fears and complicate Fed policy.
• Sector rotation: Technology (–1.4 %) and Financials (–1.7 %) lead declines; Energy (–1.6 %) pressured by softer crude.
• Stock standouts: ONEOK upgraded yet down 3.5 %; MPWR bucks the trend at +9.9 %; COIN sinks 15.6 % on an earnings miss.
• Actionable lens: Consider trimming cyclical exposure, adding low-beta names with pricing power, and laddering hedges out to the September FOMC where policy clarity should improve.