Market Decode: Tariffs, Jobs, and Earnings Insights

Fresh news and strategies for traders. SPY Trader episode #1331. This market update dissects the implications of new tariffs and a surprisingly weak jobs report that has fueled expectations for a September Fed rate cut. It reviews a mixed Q2 earnings season, spotlighting strong corporate results from tech leaders and others, while noting disappointments. The episode covers broad market and sector performance, highlighting the Nasdaq's record close, the strength of technology and utilities, and the current undervaluation of the healthcare sector. Investment strategies are provided for growth, income, and value investors, emphasizing diversification and the significant impact of potential monetary policy shifts.

Episode Transcript

(00:00):
Welcome back to Spy Trader , your daily dive into the market's pulse !
It's 6 am on Friday , August 8th , 2025 , Pacific time , and I'm your host , Chuckles Charts .
We've got a lot to unpack this morning as the market navigates a really interesting mix of tariffs , a surprising jobs report , and some compelling corporate earnings .

(00:22):
Let's get right into it .
First up , the big headlines .
We've seen some fresh ' reciprocal ' tariffs on goods from numerous U.S.
trading partners officially kick in yesterday , August 7th .
On top of that , President Trump announced plans for a whopping 100% tariff on chip imports , though with a crucial exemption for U.S.based manufacturing , which gave a nice boost to our domestic chip stocks .

(00:48):
Shifting gears to jobs , we got a surprisingly weak report on August 1st .
Nonfarm payrolls increased by only 73,000 in July , well below expectations , and prior months saw some significant downward revisions .
This has really shifted expectations towards a September interest rate cut by the Federal Reserve .

(01:12):
And then there's corporate earnings .
Q2 season has been largely positive , with many companies beating lowered guidance .
Apple , for instance , climbed over 3% yesterday after CEO Tim Cook announced a massive 100 billion dollar investment in U.S.
production .
In medical tech , Insulet , Becton Dickinson , and Zimmer Biomet Holdings all posted betterthanexpected earnings , sending their stocks higher .

(01:40):
However , not everyone had a great run ; cybersecurity firm Fortinet saw its shares plummet 22% after its earnings outlook didn't quite impress analysts .
On the bright side , McDonald's shares rose after beating forecasts and offering optimistic guidance , and Palantir announced its revenues hit 1 billion dollars for the first time , boosting its fullyear outlook .

(02:03):
But Eli Lilly saw its shares plunge 14% after disappointing trial results for its experimental weightloss pill .
Now , let's talk about what all this means for your portfolio .
The U.S.
stock market has been a bit of a mixed bag , but generally resilient .
The S&P 500 , tracked by SPY , saw a slight dip of 0.1% yesterday , and the Dow dropped 0.5% .

(02:29):
However , the techheavy Nasdaq Composite , represented by QQQ , bucked the trend , advancing nearly 0.4% to hit a record closing high .
Yeartodate , the broader market , as reflected by SPY , is up 7.79% , while QQQ has gained 8.63% .

(02:49):
Despite some shortterm pullbacks , especially after that August 1st market dip due to tariffs and the jobs report , the underlying bullish trend , particularly in technology , remains strong .
When we look at sectors , Utilities have really shined , with the Utilities Select Sector SPDR Fund , XLU , rallying an impressive 16% yeartodate .

(03:14):
This is largely because they're seen as safe havens , offering reliable dividends and benefiting from increasing electricity demand driven by things like cloud computing and AI .
Industrials , tracked by XLI , are also doing great , up 15.1% .
Technology , which was the bestperforming sector in July , climbing over 5% , continues to impress , with companies like Apple , Nvidia , and Broadcom seeing significant gains .

(03:44):
On the flip side , Healthcare has been the worst performer yeartodate , down 3.87% through July , largely due to policy uncertainty and rising costs .
Interestingly , Healthcare and Communications are currently considered the most undervalued sectors .
The macroeconomic picture is giving us mixed signals .

(04:06):
The Federal Reserve kept interest rates steady in July , but that surprisingly weak jobs report has dramatically increased expectations for a September rate cut , with markets pricing in an 80% chance !
This sent Treasury yields tumbling , signaling a potential shift towards easier monetary policy .
While Q2 GDP growth was stronger than expected at 3% , it was partly due to technical factors , and forecasts suggest slower growth for the year .

(04:36):
Inflation worries persist , but the focus has certainly shifted to growth concerns and those potential rate cuts .
So , where do we go from here ?
For my growthoriented investors with a higher risk tolerance , I'd say maintain exposure to technology and growth sectors .
AI continues to be a massive driving force , and if rate cuts materialize , it will only make future earnings more valuable .

(05:01):
Specifically , look at the Invesco QQQ Trust , QQQ .
It's heavily weighted towards tech giants and AI innovators .
For even more direct exposure to S&P 500 tech companies , the Technology Select Sector SPDR Fund , XLK , is an excellent choice , benefiting directly from the likes of Apple and those strong chip stocks .

(05:24):
Now , if you're an incomefocused or defensive investor , stability and income are key .
Given the potential for falling interest rates , utilities and highquality bonds look attractive .
The Utilities Select Sector SPDR Fund , XLU , has been a standout performer for a reason , offering consistent dividends and stability .

(05:47):
For your fixedincome allocation , the iShares Core U.S.
Aggregate Bond ETF , AGG , is a solid choice .
It tracks the total U.S.
investmentgrade bond market and has shown positive performance as Treasury yields have fallen .
You could also consider the Vanguard Total Bond Market ETF , BND , for similar broad diversification in bonds .

(06:12):
And for those of you seeking value and potential rebound opportunities , while more speculative , the Healthcare sector , tracked by the Health Care Select Sector SPDR Fund , XLV , is currently the worst performer yeartodate and considered undervalued .
While it faces some headwinds , the longterm drivers like demographics and scientific advancements are still very much intact .

(06:37):
Keep an eye on policy developments here for a potential turnaround .

Overall , my guidance remains clear (06:41):
diversification is your friend , especially with mixed signals and volatility .
Broad market ETFs like SPDR S&P 500 ETF Trust , SPY , or the Vanguard Total Stock Market ETF , VTI , can be excellent core holdings .

(07:01):
And importantly , keep monitoring that macroeconomic data , especially inflation reports and what the Federal Reserve says next .
The high probability of a September rate cut is a huge factor for market direction .
Remember , despite the shortterm ups and downs , a longterm investment perspective is often the most rewarding .

(07:22):
That's all for this edition of Spy Trader .
I'm Chuckles Charts , wishing you profitable trading !