August 30, 2025 • 11 mins
Fresh news and strategies for traders. SPY Trader episode #1353.
The market experienced a rollercoaster week in late August, reaching record highs midweek before a Friday pullback due to new inflation data. Despite this, August closed with solid monthly gains for major indices. Key drivers included strong GDP revisions and robust earnings from tech, though the sector also saw significant declines on Friday led by Nvidia and Dell. Inflation, particularly core PCE, remains above the Fed's 2% target, yet a September interest rate cut is anticipated amidst signs of a cooling labor market. Investment recommendations include diversifying into smallcap and value stocks, closely monitoring Fed policy, strategic sector selection (caution with tech, consider industrials and healthcare), and using gold as a hedge against volatility.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
Hey everyone , and welcome to Spy Trader !
I'm your host , Chip Dip , and it's 6 am on Saturday , August 30th , 2025 , Pacific time .
We've just wrapped up an eventful week in the markets , and let's dive right into what's been moving the needle .
The past few days saw a bit of a rollercoaster , with the major indices hitting record highs midweek before a bit of a pullback on Friday .
(00:26):
But despite that endofweek hiccup , August closed out with some really solid monthly gains for our main market players .
So , let's get into the nittygritty .
Wednesday , August 27th , saw modest gains , with the S&P 500 , which you can track with an ETF like SPY , hitting a new record high , up 0.2% .
(00:46):
The Nasdaq Composite , think QQQ here , also advanced 0.2% , and the Dow Jones Industrial Average gained 0.3% .
Tech stocks were definitely leading the charge .
Then , on Thursday , August 28th , the good times kept rolling !
Both the Dow and the S&P 500 soared to fresh record highs .
(01:10):
The Dow climbed 0.16% to 45,636.90 , and the S&P 500 rose 0.32% to 6,501.86 .
The Nasdaq Composite added 0.53% to 21,705.16 , all thanks to an upward revision in secondquarter GDP and some robust earnings from AI chip giant Nvidia .
(01:38):
But then , Friday , August 29th , played spoiler .
Markets retreated , closing lower as new inflation data put a damper on investor spirits .
The Dow fell about 0.20.3% , the S&P 500 declined by about 0.30.4% , and the techheavy Nasdaq Composite dropped nearly 1% , specifically 1.15% to 1.2% .
(02:06):
This downturn was largely due to a slump in semiconductor stocks , including the big names like Nvidia and Dell .
Despite Friday's dip , the broader market closed the week higher , marking the fourth consecutive month of gains for the S&P 500 and Dow , and the fifth for the Nasdaq .
The S&P 500 gained around 0.50.6% for the week , the Nasdaq Composite added about 1% , and the Dow Jones Industrial Average finished nearly flat but with a small gain .
(02:40):
Even the Russell 2000 index , representing smallcap stocks , rose approximately 0.7% over the week .
Now for a quick look at sector performance .
Technology , which you can find in ETFs like the Technology Select Sector SPDR Fund , XLK , or Invesco QQQ Trust , QQQ , led earlier in the week , fueled by AI optimism and Nvidia's strong performance .
(03:08):
However , it saw significant declines on Friday , with XLK falling 1.53% and QQQ dropping 1.16% .
This sector was particularly hit by news regarding tariffs on chip imports and some companyspecific results .
Financials , like the Financial Select Sector SPDR Fund , XLF , experienced some pressure on Friday , partly due to that inflation data .
(03:35):
Healthcare , represented by the Health Care Select Sector SPDR Fund , XLV , posted a gain of 0.73% on Friday , showing some defensive strength when the broader market was pulling back .
Industrials faced pressure too , with major companies like Caterpillar citing tariffs as a big earnings headwind .
(03:58):
Smallcaps , such as the Russell 2000 Index , returned a very impressive 7.7% from the end of July through Thursday , significantly outperforming the S&P 500's 2.7% return over the same period .
This hints at a potential rotation into this segment , which many still consider undervalued .
(04:20):
On the news front , inflation is a huge focus for the Federal Reserve .
The Personal Consumption Expenditures , PCE , index , which is the Fed's preferred gauge , rose 2.6% yearoveryear in July , consistent with June .
However , core PCE , excluding food and energy , increased to 2.9% yearoveryear , the highest since February and still above the Fed's 2% target .
(04:46):
This persistent inflation contributed to Friday's market downturn .
Despite that , the Federal Reserve has signaled a likely interest rate cut in September .
This anticipation is partly influenced by emerging weakness in the labor market and some political pressure .
The U.S.
economy , though , is showing resilience , with secondquarter GDP growth revised upward to an annual rate of 3.3% .
(05:13):
Plus , the Atlanta Fed's GDPNow model significantly revised its Q3 2025 growth forecast upward to 3.5% on August 29th , from 2.2% just three days prior .
That's strong economic activity !
The labor market , on the other hand , is showing signs of cooling , with monthly job growth slowing and the unemployment rate projected to rise slightly .
(05:39):
Consumer spending saw a significant jump of 0.5% in July , the largest increase since March , while incomes rose 0.4% , boosted by healthy wage gains .
Finally , tariffs imposed by President Trump continue to be a factor , contributing to inflation and negatively impacting some corporate earnings .
(06:02):
A U.S.
appeals court ruling on August 29th that many of these tariffs are illegal could be a really significant development .
Now for some key company events (06:09):
Nvidia , NVDA , announced strong quarterly earnings and revenue that beat expectations , but growth in AI chipset sales slowed .
Its stock declined over 2% in afterhours trading and fell 3.4% on Friday , hurting the broader tech sector .
(06:30):
Dell's shares fell 8.9% on Friday , due to increased competition and higher costs for AI products .
On a brighter note , Alibaba , BABA , surged 12.9% on Friday following strong cloud computing results .
This shows that positive companyspecific news can still drive big gains .
(06:52):
Caterpillar , CAT , declined on Friday due to concerns about tariffs , leading to missed earnings and a lowered outlook .
And MongoDB , MDB , shares skyrocketed approximately 38% on August 27th after reporting betterthanexpected sales and profits and raising its fullyear outlook .
(07:13):
The U.S.
stock market is in a dynamic phase , balancing robust economic indicators like strong GDP growth and consumer spending against the persistent challenge of abovetarget inflation and a moderating labor market .
The anticipation of a Federal Reserve rate cut in September is a key driver , but the details of this policy shift and future inflation readings will really dictate future movements .
(07:38):
So , what are my investment recommendations for you , my fellow Spy Traders ?
First , embrace diversification with a smallcap and value tilt .
Given the strong recent performance of smallcap stocks and their comparatively lower valuations , increasing your exposure here could offer attractive riskadjusted returns .
(07:59):
For broad market exposure , Vanguard S&P 500 ETF , VOO , or iShares CORE S&P 500 ETF , IVV , are excellent core holdings .
To capture that smallcap opportunity , consider the iShares Russell 2000 ETF , IWM , or the Vanguard SmallCap ETF , VB .
(08:23):
For a more valueoriented approach within smallcaps , the Vanguard S&P SmallCap 600 Value ETF , VIOV , could be a compelling choice as smallcaps are still seen as cheap .
Second , closely monitor Federal Reserve policy and inflation .
The market's reaction to inflation data on Friday really underscores its sensitivity to the Fed's stance .
(08:47):
While a September rate cut is widely expected , any signals of further sustained inflation or a more hawkish tone from the Fed could introduce volatility .
Pay close attention to the upcoming August jobs report and the September Consumer Price Index , CPI , release .
For fixedincome exposure , the Vanguard Total Bond Market ETF , BND , or the iShares Core U.S.
(09:14):
Aggregate Bond ETF , AGG , provide broad investmentgrade bond exposure , which can offer stability .
However , with interest rate uncertainty , maintaining a flexible approach to bond duration is advisable .
Third , think about strategic sector selection , but with caution .
For Technology , while the longterm growth story , especially in AI , remains compelling , the sector's high valuations and recent volatility , as seen with Nvidia and Dell , warrant a cautious and selective approach .
(09:48):
Longterm investors who believe in the AI narrative might view recent dips in key players like Nvidia , NVDA , as potential buying opportunities , but always acknowledge the inherent risks and high expectations .
For Industrials , with robust GDP forecasts and signs of economic resilience , cyclical sectors like Industrials could benefit .
(10:12):
However , the impact of tariffs remains a concern for some companies .
The Industrial Select Sector SPDR Fund , XLI , offers broad exposure to this sector .
For Healthcare , often considered a defensive sector , Healthcare can provide stability during periods of market uncertainty .
(10:33):
The Health Care Select Sector SPDR Fund , XLV , is a good option for investors seeking exposure to pharmaceutical , biotechnology , and other healthcare companies .
Finally , consider gold as a portfolio hedge .
Given the ongoing inflationary pressures and geopolitical uncertainties , like those tariffs and their legal challenges , gold can serve as a valuable hedge against market volatility and inflation .
(11:01):
The SPDR Gold Shares , GLD , ETF provides an accessible way to gain exposure to gold bullion without direct physical ownership .
In conclusion , while the U.S.
stock market has shown remarkable resilience and achieved new highs recently , the persistent inflation and an evolving labor market continue to create a nuanced environment .
(11:26):
A diversified portfolio , with careful consideration of sector exposure and a vigilant eye on macroeconomic data and central bank actions , will be key for navigating the months ahead .
That's all for this episode of Spy Trader !
Thanks for tuning in , and happy trading !
Hey everyone , and welcome to Spy Trader !
I'm your host , Chip Dip , and it's 6 am on Saturday , August 30th , 2025 , Pacific time .
We've just wrapped up an eventful week in the markets , and let's dive right into what's been moving the needle .
The past few days saw a bit of a rollercoaster , with the major indices hitting record highs midweek before a bit of a pullback on Friday .
(00:26):
But despite that endofweek hiccup , August closed out with some really solid monthly gains for our main market players .
So , let's get into the nittygritty .
Wednesday , August 27th , saw modest gains , with the S&P 500 , which you can track with an ETF like SPY , hitting a new record high , up 0.2% .
(00:46):
The Nasdaq Composite , think QQQ here , also advanced 0.2% , and the Dow Jones Industrial Average gained 0.3% .
Tech stocks were definitely leading the charge .
Then , on Thursday , August 28th , the good times kept rolling !
Both the Dow and the S&P 500 soared to fresh record highs .
(01:10):
The Dow climbed 0.16% to 45,636.90 , and the S&P 500 rose 0.32% to 6,501.86 .
The Nasdaq Composite added 0.53% to 21,705.16 , all thanks to an upward revision in secondquarter GDP and some robust earnings from AI chip giant Nvidia .
(01:38):
But then , Friday , August 29th , played spoiler .
Markets retreated , closing lower as new inflation data put a damper on investor spirits .
The Dow fell about 0.20.3% , the S&P 500 declined by about 0.30.4% , and the techheavy Nasdaq Composite dropped nearly 1% , specifically 1.15% to 1.2% .
(02:06):
This downturn was largely due to a slump in semiconductor stocks , including the big names like Nvidia and Dell .
Despite Friday's dip , the broader market closed the week higher , marking the fourth consecutive month of gains for the S&P 500 and Dow , and the fifth for the Nasdaq .
The S&P 500 gained around 0.50.6% for the week , the Nasdaq Composite added about 1% , and the Dow Jones Industrial Average finished nearly flat but with a small gain .
(02:40):
Even the Russell 2000 index , representing smallcap stocks , rose approximately 0.7% over the week .
Now for a quick look at sector performance .
Technology , which you can find in ETFs like the Technology Select Sector SPDR Fund , XLK , or Invesco QQQ Trust , QQQ , led earlier in the week , fueled by AI optimism and Nvidia's strong performance .
(03:08):
However , it saw significant declines on Friday , with XLK falling 1.53% and QQQ dropping 1.16% .
This sector was particularly hit by news regarding tariffs on chip imports and some companyspecific results .
Financials , like the Financial Select Sector SPDR Fund , XLF , experienced some pressure on Friday , partly due to that inflation data .
(03:35):
Healthcare , represented by the Health Care Select Sector SPDR Fund , XLV , posted a gain of 0.73% on Friday , showing some defensive strength when the broader market was pulling back .
Industrials faced pressure too , with major companies like Caterpillar citing tariffs as a big earnings headwind .
(03:58):
Smallcaps , such as the Russell 2000 Index , returned a very impressive 7.7% from the end of July through Thursday , significantly outperforming the S&P 500's 2.7% return over the same period .
This hints at a potential rotation into this segment , which many still consider undervalued .
(04:20):
On the news front , inflation is a huge focus for the Federal Reserve .
The Personal Consumption Expenditures , PCE , index , which is the Fed's preferred gauge , rose 2.6% yearoveryear in July , consistent with June .
However , core PCE , excluding food and energy , increased to 2.9% yearoveryear , the highest since February and still above the Fed's 2% target .
(04:46):
This persistent inflation contributed to Friday's market downturn .
Despite that , the Federal Reserve has signaled a likely interest rate cut in September .
This anticipation is partly influenced by emerging weakness in the labor market and some political pressure .
The U.S.
economy , though , is showing resilience , with secondquarter GDP growth revised upward to an annual rate of 3.3% .
(05:13):
Plus , the Atlanta Fed's GDPNow model significantly revised its Q3 2025 growth forecast upward to 3.5% on August 29th , from 2.2% just three days prior .
That's strong economic activity !
The labor market , on the other hand , is showing signs of cooling , with monthly job growth slowing and the unemployment rate projected to rise slightly .
(05:39):
Consumer spending saw a significant jump of 0.5% in July , the largest increase since March , while incomes rose 0.4% , boosted by healthy wage gains .
Finally , tariffs imposed by President Trump continue to be a factor , contributing to inflation and negatively impacting some corporate earnings .
(06:02):
A U.S.
appeals court ruling on August 29th that many of these tariffs are illegal could be a really significant development .
Now for some key company events (06:09):
Nvidia , NVDA , announced strong quarterly earnings and revenue that beat expectations , but growth in AI chipset sales slowed .
Its stock declined over 2% in afterhours trading and fell 3.4% on Friday , hurting the broader tech sector .
(06:30):
Dell's shares fell 8.9% on Friday , due to increased competition and higher costs for AI products .
On a brighter note , Alibaba , BABA , surged 12.9% on Friday following strong cloud computing results .
This shows that positive companyspecific news can still drive big gains .
(06:52):
Caterpillar , CAT , declined on Friday due to concerns about tariffs , leading to missed earnings and a lowered outlook .
And MongoDB , MDB , shares skyrocketed approximately 38% on August 27th after reporting betterthanexpected sales and profits and raising its fullyear outlook .
(07:13):
The U.S.
stock market is in a dynamic phase , balancing robust economic indicators like strong GDP growth and consumer spending against the persistent challenge of abovetarget inflation and a moderating labor market .
The anticipation of a Federal Reserve rate cut in September is a key driver , but the details of this policy shift and future inflation readings will really dictate future movements .
(07:38):
So , what are my investment recommendations for you , my fellow Spy Traders ?
First , embrace diversification with a smallcap and value tilt .
Given the strong recent performance of smallcap stocks and their comparatively lower valuations , increasing your exposure here could offer attractive riskadjusted returns .
(07:59):
For broad market exposure , Vanguard S&P 500 ETF , VOO , or iShares CORE S&P 500 ETF , IVV , are excellent core holdings .
To capture that smallcap opportunity , consider the iShares Russell 2000 ETF , IWM , or the Vanguard SmallCap ETF , VB .
(08:23):
For a more valueoriented approach within smallcaps , the Vanguard S&P SmallCap 600 Value ETF , VIOV , could be a compelling choice as smallcaps are still seen as cheap .
Second , closely monitor Federal Reserve policy and inflation .
The market's reaction to inflation data on Friday really underscores its sensitivity to the Fed's stance .
(08:47):
While a September rate cut is widely expected , any signals of further sustained inflation or a more hawkish tone from the Fed could introduce volatility .
Pay close attention to the upcoming August jobs report and the September Consumer Price Index , CPI , release .
For fixedincome exposure , the Vanguard Total Bond Market ETF , BND , or the iShares Core U.S.
(09:14):
Aggregate Bond ETF , AGG , provide broad investmentgrade bond exposure , which can offer stability .
However , with interest rate uncertainty , maintaining a flexible approach to bond duration is advisable .
Third , think about strategic sector selection , but with caution .
For Technology , while the longterm growth story , especially in AI , remains compelling , the sector's high valuations and recent volatility , as seen with Nvidia and Dell , warrant a cautious and selective approach .
(09:48):
Longterm investors who believe in the AI narrative might view recent dips in key players like Nvidia , NVDA , as potential buying opportunities , but always acknowledge the inherent risks and high expectations .
For Industrials , with robust GDP forecasts and signs of economic resilience , cyclical sectors like Industrials could benefit .
(10:12):
However , the impact of tariffs remains a concern for some companies .
The Industrial Select Sector SPDR Fund , XLI , offers broad exposure to this sector .
For Healthcare , often considered a defensive sector , Healthcare can provide stability during periods of market uncertainty .
(10:33):
The Health Care Select Sector SPDR Fund , XLV , is a good option for investors seeking exposure to pharmaceutical , biotechnology , and other healthcare companies .
Finally , consider gold as a portfolio hedge .
Given the ongoing inflationary pressures and geopolitical uncertainties , like those tariffs and their legal challenges , gold can serve as a valuable hedge against market volatility and inflation .
(11:01):
The SPDR Gold Shares , GLD , ETF provides an accessible way to gain exposure to gold bullion without direct physical ownership .
In conclusion , while the U.S.
stock market has shown remarkable resilience and achieved new highs recently , the persistent inflation and an evolving labor market continue to create a nuanced environment .
(11:26):
A diversified portfolio , with careful consideration of sector exposure and a vigilant eye on macroeconomic data and central bank actions , will be key for navigating the months ahead .
That's all for this episode of Spy Trader !
Thanks for tuning in , and happy trading !
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