Tariff Turbulence: Navigating August Markets

Fresh news and strategies for traders. SPY Trader episode #1324. The podcast reports on a market downturn in early August 2025, driven by renewed concerns over President Trump's sweeping tariffs (1041% on imports from 92 countries), mixed corporate earnings (Amazon's disappointing guidance contrasted with strong beats from Apple, Microsoft, and Meta), accelerating inflation, and a weakerthanexpected July jobs report. The Federal Reserve maintained interest rates in July, but a September rate cut is now anticipated. Investment advice includes cautious diversification, emphasizing defensive sectors like healthcare, consumer staples, and utilities. Selective tech investments (Microsoft), fixed income (core bonds, longterm Treasuries), and gold are also recommended to navigate the current volatility, with a focus on monitoring trade policy, Fed actions, and companyspecific news.

Episode Transcript

(00:00):
Hey there , market mavens and future millionaires !
Welcome back to Spy Trader , your goto podcast for navigating the daily twists and turns of the financial world .
I'm your host , Rocky Bullbear , and it's 6 am on Friday , August 1st , 2025 , Pacific time .
We're coming to you hot off the presses , as always , giving you the freshest insights every few hours .

(00:23):
Let's dive into what's moving the markets this morning !
Alright , let's get straight to it .
After a fantastic July where all three major indexes closed in positive territory – with the S&P 500 up 2.2% , Nasdaq up 3.7% , and the Dow up a modest 0.1% – we're kicking off August with a bit of a wobble .

(00:48):
U.S.
stock futures are trending lower this morning .
The Nasdaq 100 is down 1.19% , the S&P 500 is down 0.98% , and the Dow Jones Industrial Average is down 0.86% .
This follows three consecutive days of declines for the S&P 500 and Nasdaq .

(01:12):
The big news driving this downturn ?
Renewed concerns over President Trump's recently announced sweeping tariffs , which range from 10% to 41% on imports from 92 countries , taking effect on August 7th .
We're talking 35% on Canadian goods , 25% on India , and 20% on Taiwan .

(01:34):
Ouch !
Add to that , Amazon's disappointing earnings guidance , which sent its stock down over 7% in premarket trading , despite solid Q2 results .
On the flip side , Apple's shares jumped 2% after beating both earnings and sales estimates , thanks to strong iPhone sales and record services revenue .

(01:56):
Microsoft and Meta Platforms also reported strong beats .
But it's not all sunshine and roses , Procter & Gamble , for instance , saw its stock sink 3.6% after forecasting a 1 billion hit from tariffs in 2026 .
And the market is keenly awaiting the July jobs report , which just came in weaker than expected , showing only 73,000 new jobs added , far less than the 110,000 expected , and with a projected rise in unemployment to 4.2% .

(02:29):
So , what's really going on under the hood ?
First , those tariffs are a massive cloud .
Companies like Procter & Gamble are already feeling the pinch , estimating a 1 billion hit to their financials .
This isn't just about higher prices for consumers ; it's about disrupted supply chains and a big question mark over future corporate margins .

(02:52):
Second , inflation is rearing its head again .
The annual inflation rate accelerated to 2.7% in June , with core inflation at 2.9% .
Forecasts suggest it could reaccelerate above 3% in the second half of 2025 , partly thanks to these new tariffs .

(03:12):
This makes the Federal Reserve's job incredibly tough .
They just kept interest rates unchanged at 4.25% to 4.5% for the fifth straight meeting in July , adopting a ' waitandsee ' approach .
While some FOMC members wanted a rate cut , the Fed is holding firm , trying to balance inflation and employment .

(03:33):
Economists now predict a 63% likelihood of a 0.25 percentage point rate cut in September .
Third , those mixed corporate earnings .
While Apple , Microsoft , and Meta showed strength , Amazon's guidance raises questions about how tariffs might impact future sales , especially if suppliers were just stocking up .

(03:55):
And finally , the labor market is slowing .
The July jobs report , with a modest 73,000 jobs added and a projected unemployment rate of 4.2% , suggests the economy is decelerating .
This could give the Fed more flexibility for cuts down the line , but it's a shortterm negative for economic sentiment .

(04:17):
Given this complex landscape , my advice for today is to stay cautious and diversified .
We're looking for resilience .
First , defensive positioning .
In times of trade tensions and economic uncertainty , sectors that provide essential goods and services tend to be more stable .
Consider increasing exposure to the Health Care Select Sector SPDR Fund , ticker XLV .

(04:42):
Despite recent White House pressure on drug prices , healthcare is a fundamentally defensive sector .
The Consumer Staples Select Sector SPDR Fund , ticker XLP , is another great option , as people always need basic goods regardless of the economy .
And don't forget the Utilities Select Sector SPDR Fund , ticker XLU ; these companies often offer stable dividends and are less sensitive to economic cycles .

(05:09):
Second , let's talk tech .
While tech has led the market , we need to be selective .
Microsoft , ticker MSFT , remains a powerhouse .
Its valuation just surpassed 4 trillion , thanks to its strength in cloud computing and enterprise software .
It's a strong hold , or consider adding on dips .
Apple , ticker AAPL , despite its strong earnings beat , still faces potential tariff impacts , especially since most iPhones sold in the US originate from India , which now faces new tariffs .

(05:42):
Hold existing positions , but keep a close eye on trade news .
For broader tech exposure , the Technology Select Sector SPDR Fund , ticker XLK , or the Invesco QQQ Trust , ticker QQQ , are options , but remember their high concentration in largecap growth stocks makes them more sensitive to market downturns .

(06:04):
Third , fixed income for stability .
Core bond ETFs like the iShares Core U.S.
Aggregate Bond ETF , ticker AGG , or Vanguard Total Bond Market ETF , ticker BND , are excellent choices to provide stability and income to your portfolio .
If you believe the economic slowdown is going to worsen , consider the iShares 20 Year Treasury Bond ETF , ticker TLT , as longterm Treasuries can see price appreciation in a flight to safety .

(06:35):
Finally , a bit of alternative assets , specifically gold .
The SPDR Gold Shares , ticker GLD , can act as a safehaven asset .
With rising inflation forecasts and ongoing geopolitical uncertainty from tariffs , gold could continue to be a valuable hedge .

A few key considerations for your strategy (06:54):
Keep a close eye on trade policy evolution .
The full impact of these new tariffs is still unfolding , and potential retaliatory measures could change the game .
The Federal Reserve's next move in September is critical .
The jobs report and upcoming inflation data will be major drivers .

(07:16):
Always monitor companyspecific news , especially for firms with significant international exposure or those sensitive to consumer spending , like Amazon and Procter & Gamble .
Above all , diversify your portfolio and maintain a longterm perspective .
Shortterm volatility is the name of the game right now , so avoid impulsive decisions .