This content was published on <\/p>\n
August 4, 2025 – 20:03\n<\/p>\n
(Bloomberg) \u2014 A renewed wave of dip buying lifted stocks, with traders sifting through solid earnings amid bets the Federal Reserve will soon cut rates. Treasuries wavered ahead of a heavy slate of US debt sales.<\/p>\n
As equities halted a four-day slide, the S&P 500 climbed over 1%, the most since May. Tech megacaps, which bore the brunt of the recent selling, led the bounce. Corporate results also buoyed sentiment, with 82% of the companies in the US benchmark so far beating estimates.<\/p>\n
Subscribe to the Stock Movers Podcast on Apple, Spotify and other Podcast Platforms.<\/p>\n
Investors should buy into the selloff in US stocks because of the robust earnings outlook for the coming year, said Morgan Stanley\u2019s Michael Wilson. At Goldman Sachs Group Inc., David Kostin noted executives had so far sounded confident in their ability to mitigate the impact of tariffs on profits.<\/p>\n
S&P 500 firms are on track to post a 9.1% jump in profits, far above analysts\u2019 projection of 2.8%, according to data compiled by Bloomberg Intelligence. The share of companies beating estimates is also the highest in four years.<\/p>\n
\u201cThis week is a quiet one on the economic calendar, so traders may be taking their cues from earnings, along with any new tariff and trade developments,\u201d said Chris Larkin at E*Trade from Morgan Stanley.<\/p>\n
Larkin also noted that a key question now is whether traders will view any signs of economic weakness as a market negative, or as a catalyst for the Fed to cut rates sooner rather than later.<\/p>\n
Action in the bond market was fairly muted as the US is set to auction $125 billion of new three-, 10- and 30-year debt this week. The dollar was little changed. Oil prices fell in choppy trading as traders took stock of OPEC+\u2019s latest bumper supply increase while US President Donald Trump\u2019s stepped up threats to penalize India for buying Russian crude.<\/p>\n
\u201cThis week will be a telling one: a tug-of-war is unfolding between traditional institutional seasonality, which suggests weakness, and retail investors who may see a dip as a buying opportunity,\u201d said Mark Hackett at Nationwide. \u201cIt\u2019s a good test for who\u2019s really in control.\u201d<\/p>\n
Looking ahead, the setup into fall favors the bull case with potential rate cuts and strong corporate earnings laying the groundwork for a renewed rally into year-end and a fresh slate for 2026, Hackett added.<\/p>\n
\u201cThe incoming batch of economic data will provide clues on which direction we\u2019re going, but for now, the equity market has voted loud and clear, and investors are enthusiastic about profit momentum going forward,\u201d said Jose Torres at Interactive Brokers. \u201cTime will tell.\u201d<\/p>\n
While S&P 500 earnings are crushing second-quarter expectations, with stocks near all-time highs, the question is whether this recovery still has legs, according to BI strategists Gina Martin Adams and Wendy Soong.<\/p>\n
\u201cManagement sentiment is at an eight-year high, yet guidance tells a more cautious story with concerns about tariffs and rising costs,\u201d they noted. \u201cThe market shows this tension: misses in large caps and small are punished sharply, beats draw only modest applause.\u201d<\/p>\n
Following a broad flight from risk assets at the end of last week, equities also bounced amid bets the Fed will cut rates this year.<\/p>\n
Investors see around 85% odds that the Fed will lower rates by a quarter point in September, based on swaps tied to policy-meeting dates. While that\u2019s down from Friday\u2019s peak of 90%, it was around 40% before the Friday\u2019s weak payroll data was published.<\/p>\n
\u201cIf the Fed starts to cut rates at its September meeting, we believe this would be supportive for markets,\u201d said David Lefkowitz at UBS Global Wealth Management. \u201cIn combination with our positive view on earnings, we expect further upside for US stocks over the next 12 months.\u201d<\/p>\n
Societe Generale strategists Manish Kabra and Charles de Boissezon see US stocks extending their climb into next year, lifted by the Fed\u2019s looming rate cuts.<\/p>\n
\u201cFed cuts to shape the index,\u201d they wrote, adding that gradual cutting would be positive, while aggressive cuts could drive markets to a valuation bubble.<\/p>\n
While Friday\u2019s jobs report doesn\u2019t mean we are entering a recession, it shows that companies are freezing hiring and firing until there is more policy certainty and business confidence, according to Robert Ruggirello at Brave Eagle Wealth Management.<\/p>\n
\u201cThe slowing labor market makes a Federal Reserve rate cut easier than it was a week ago, and echoes some of the warnings that Jerome Powell has been sounding about how tariffs could slow the economy and cause too much uncertainty for small business hiring plans,\u201d he said.<\/p>\n
As investors across Wall Street eagerly piled into US stocks in July, sending the S&P 500 to 10 all-time highs in a month, a notable group was heading in the opposite direction: corporate executives.<\/p>\n
Insiders at just 151 S&P 500 companies bought their own stocks last month, the fewest since at least 2018, according to data compiled by the Washington Service. And while July\u2019s selling by corporate insiders slowed from June\u2019s pace, purchases dropped even more, pushing the ratio of buying-to-selling to the lowest level in a year, the data shows.<\/p>\n
\u201cIn the near term, risk-on sentiment may need to contend with an economic outlook of slowing growth, elevated inflation, and ongoing policy uncertainty. So far, companies have navigated the tariff noise without much visible strain, but pressures are likely to grow,\u201d said Seema Shah at Principal Asset Management.<\/p>\n
On the tariff front, President Donald Trump said he would be \u201csubstantially raising\u201d the tariff on Indian exports to the US over New Delhi\u2019s purchases of Russian oil, ramping up his threat to target a major trading partner.<\/p>\n
Meantime, the European Union is expecting Trump to announce executive actions this week to formalize the bloc\u2019s lower tariffs for cars and grant exemptions from levies for some industrial goods such as aviation parts, according to people familiar with the matter.<\/p>\n
\u201cOur base case remains that US tariffs will eventually settle around 15%. While this would be the highest since the 1930s, and six times higher than when Trump returned to office, we do not expect it to cause a recession or end the equity bull market,\u201d said Ulrike Hoffmann-Burchardi at UBS Global Wealth Management.<\/p>\n
\u201cHowever, in the near term, the \u201chandshake\u201d nature of trade deals agreed so far means that tensions could resurface as the details are negotiated,\u201d she noted.<\/p>\n
Corporate Highlights:<\/p>\n
Tesla Inc. approved an interim stock award worth about $30 billion for Chief Executive Officer Elon Musk, a massive payout meant to keep the billionaire\u2019s attention on the automaker as a legal fight over a 2018 pay package drags on. American Eagle Outfitters Inc. jumped as President Donald Trump came out in support of a controversial ad from the company. The spot, with the actress Sydney Sweeney, is the \u201cHOTTEST ad out there,\u201d Trump said in a social media post. He added American Eagle jeans are \u201cflying off the shelves.\u201d Tyson Foods Inc. raised its full-year earnings forecast as strong US chicken demand and cheap feed costs help it withstand losses it its beef business. Spotify Technology SA announced it\u2019s raising premium subscription prices across many markets outside the US. Workers at Boeing Co.\u2019s St. Louis-area defense factories are striking for the first time in almost three decades after union members rejected the company\u2019s modified contract offer. Warren Buffett\u2019s Berkshire Hathaway Inc. took a $3.8 billion impairment on its Kraft Heinz Co. stake, the latest hit to a bet that\u2019s weighed on the billionaire investor\u2019s company in recent years. CommScope Holding Co. reached a deal to sell its broadband and cable equipment arm to Amphenol Corp. for about $10.5 billion in cash, the second such deal it\u2019s done with Amphenol as part of a series of divestitures aimed at paying off debt. Joby Aviation Inc. said it plans to buy the helicopter rideshare business of Blade Air Mobility Inc. for as much as $125 million in stock or cash as the electric aviation firm seeks to expand its battery-powered air taxis into a ready-made market for its aircraft. Harley-Davidson Inc. appointed the head of Topgolf Artie Starrs to be its new chief executive officer, as the motorcycle manufacturer grapples with tariffs and tepid consumer demand. Lyft Inc. said it\u2019s partnering with China\u2019s Baidu Inc. to launch autonomous vehicles in Europe starting next year, an agreement that comes after the US rideshare company finalized its first expansion into the continent.<\/p>\n
What Bloomberg Strategists say\u2026<\/p>\n
\u201cWith more than two Fed cuts priced by year-end and high odds for a cut in September, macro bears need fresh data shocks to regain control of the tape, as the \u2018Powell Put\u2019 narrative is now building. While Tuesday\u2019s services PMI data may provide that, it\u2019s more likely the ongoing debate between better-than-expected earnings and cooling economic data will continue for some time. This will allow trend-followers, volatility-control and buy-the-dip discretionary money to stay active and limit pullbacks to tactical buying opportunities.\u201d<\/p>\n
\u2014Michael Ball, Macro Strategist, Markets Live<\/p>\n
For the full analysis, click here.<\/p>\n
Some of the main moves in markets:<\/p>\n
Stocks<\/p>\n
The S&P 500 rose 1.3% as of 2:01 p.m. New York time The Nasdaq 100 rose 1.7% The Dow Jones Industrial Average rose 1.1% The MSCI World Index rose 1.1% Bloomberg Magnificent 7 Total Return Index rose 2% The Russell 2000 Index rose 1.6% Currencies<\/p>\n
The Bloomberg Dollar Spot Index was little changed The euro fell 0.1% to $1.1575 The British pound was little changed at $1.3284 The Japanese yen rose 0.3% to 146.97 per dollar Cryptocurrencies<\/p>\n
Bitcoin rose 0.7% to $115,241.39 Ether rose 5.5% to $3,686.98 Bonds<\/p>\n
The yield on 10-year Treasuries declined two basis points to 4.20% Germany\u2019s 10-year yield declined five basis points to 2.62% Britain\u2019s 10-year yield declined two basis points to 4.51% The yield on 2-year Treasuries was little changed at 3.69% The yield on 30-year Treasuries declined three basis points to 4.79% Commodities<\/p>\n
West Texas Intermediate crude fell 1.6% to $66.25 a barrel Spot gold rose 0.3% to $3,373.40 an ounce \u00a92025 Bloomberg L.P.<\/p>\n","protected":false},"excerpt":{"rendered":"This content was published on August 4, 2025 – 20:03 (Bloomberg) \u2014 A renewed wave of dip buying…\n","protected":false},"author":2,"featured_media":10407,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[64,63,5471,99,12354,13895,171,2004,12355],"class_list":["post-43453","post","type-post","status-publish","format-standard","has-post-thumbnail","category-markets","tag-au","tag-australia","tag-bonds","tag-business","tag-business-general","tag-currency-values","tag-markets","tag-stocks","tag-ticker"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/43453","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=43453"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/43453\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/10407"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=43453"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=43453"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=43453"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}