Market Recap - Week of July 28 through August 1, 2025
- Gordon Achtermann, CFP®, CSRIC®, MBA
- Aug 5
- 2 min read
The S&P 500 index fell 2.4% this week as payrolls data missed forecasts.
The index ended Friday's session at 6,238.01, and is up 6.1% this year. The S&P rose 2.2% in July, its third consecutive monthly gain.
Nonfarm payrolls rose by 73,000 in July, according to data released Friday by the Bureau of Labor Statistics, missing the consensus estimate compiled by Bloomberg for a 104,000 increase. The unemployment rate increased to 4.2% in July, in line with the market view.
Materials led decliners, falling 5.4%, while consumer discretionary lost 4.5% and healthcare was down 3.9%.
Utilities and communications were the only two gainers, climbing 1.5% and 0.01%, respectively.
Last Week’s Economic Reports
· GDP grew at a 3.0% annual rate in 2Q in line with expectations.
· Job openings decreased by 250K, disappointing forcasters.
· Nonfarm payrolls rose by a worse than expected 73K, which is not enough to keep up with population growth.
S&P 500 Sector and Stylebox Returns
Thought of the week:
America runs on consumerism. The post-COVID spending boom drove above-average GDP growth in 2023 and 2024, but now, the consumer is slowing down. Consumer companies have been highlighting a deceleration in sales growth since the end of last year. Customers are still willing to spend, but they’ve become increasingly choosy and value conscious. Cruise ship companies, for example, have continued to report strong demand, but as this week’s chart shows, airlines and hotels have struggled. Large retailers are seeing a similar trend, with trade-downs in the lower-income brackets and bulk buying in the higher-income brackets. Tariffs are the outstanding question. Companies will need to pass on some of their increased costs by raising prices, but many are concerned about demand destruction. Confidence is low, and tolerance for additional price hikes may be especially limited after the inflation in 2022. Nevertheless, balance sheets remain in good shape. Household net worth has grown by $50 trillion since before the pandemic, and consumers have $9 in assets for every $1 in liabilities. Delinquencies are rising for student, auto, and credit card loans, but these categories combined only account for 25% of consumer liabilities. During second-quarter earnings calls, banks reported their customers remain in good health, citing a slight improvement in credit quality from last quarter and bank account balances still above pre-pandemic levels.
Moving ahead, investors should keep a particularly close eye on the labor market. Friday’s downward revisions to hiring data increase the risk of a more pronounced slowdown in consumer spending, but if layoffs remain tame, consumer credit should remain solid, supporting continued slow growth in consumer spending and the economy overall.
Source: JP Morgan (edited)
Up Next
Next week's economic data releases will include the June trade deficit, factory orders, wholesale inventories, consumer credit, July S&P purchasing managers' index, and 2Q US productivity.
Want more? You can always find our latest Monthly Market Update webinar here:
All the Best,
Gordon Achtermann, CFP®
703-573-7325
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