Weekly Market Insights | Markets Retreat After Data-Heavy Week

Stocks fell last week as investors assessed progress on trade negotiations, new U.S. tariffs, and fresh data on the U.S. economy. The Standard & Poor’s 500 Index dropped 2.36 percent, while the Nasdaq Composite Index declined 2.17 percent. The Dow Jones Industrial Average fell 2.92 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, lost 2.95 percent.^1,2

Action-Packed Week

Stocks largely traded sideways over the first half of the week as investors waited for more Q2 corporate results, fresh economic data, and the Fed decision. The U.S.-E.U. trade agreement announced over the weekend had a muted impact on the market as the week began. Stocks then retreated as China trade talks appeared to stall, with the Dow declining the most of the three major averages through midweek.^3,4

Stocks gained on Wednesday morning after the latest gross domestic product (GDP) report showed consumer spending powered the economy back to 3 percent annualized growth in Q2. That afternoon, the Federal Reserve announced they were holding rates steady, which put some pressure on stocks.⁵

Selling pressure continued on July’s final trading day as investors continued to fret about the Fed’s next move. The Personal Consumption and Expenditures (PCE) Index—the Fed’s favored inflation metric—showed a June uptick in core goods prices, unsettling investors.⁵

The S&P 500 traded down over 1.6% on Friday and stocks were under pressure from the opening bell as investors sorted through fresh tariff announcements from the White House, a softer-than-expected July jobs report, and mixed Q2 corporate reports from two megacap tech names.^6,7

Mixed Economic Signals

There was a trove of economic data for investors to parse last week. First, there was economic growth. While 3 percent GDP growth in Q2 is a solid step up from a 0.5 percent contraction in Q1, consumer spending largely drove the increase, offset by slower business spending—especially investment in equipment and buildings.⁸

The PCE report showed why the Fed remains focused on inflation. Finally, Friday's jobs report pointed to a slowdown in hiring in July. A bit more concerning was that the jobs data from prior months were revised lower. The Fed has no meeting in August, with three other meetings scheduled for 2025.

Federal Reserve Governors Christopher Waller and Michelle Bowman, who voted last week against keeping a key interest rate locked in place, said Friday they believe the central bank is making a mistake with its wait-and-see decision, considering rising threats to the nation's labor market. Bowmen and Waller's desire to lower rates now was confirmed by Friday's jobs report which pointed to a slowdown in hiring in July. A bit more concerning was that the jobs data from prior months were revised lower. The Fed has no meeting in August, with three more meetings scheduled for 2025. There is now a clear reason for the Fed to start lowering rates in September, but I think the Fed is late and many Americans will continue to suffer from higher debt payment rates.

Bitcoin kicked off the second half of the year strong, reaching a new all-time high of $123,000 on July 14th.  For the month, ETFs attracted $5.4 billion in inflows, and public companies like Sequans collectively bought over 100,000 BTC. The current price action shows a maturing market, but volatility will remain with an underpinning of more money chasing a finite amount of twenty one million Bitcoin. 

Ethereum gained nearly 50% in July, driven by record inflows into Ether exchange-traded products, rising demand from crypto treasury corporations, and passage of the GENIUS Act2 which was landmark U.S. legislation establishing a regulatory framework for stablecoins. The network also saw growing traction across tokenized assets, institutional blockchain adoption, and crypto derivatives markets.

Bitcoin and Ethereum traded a few percent lower last week, but the optics and the runway for both remain positive for the longer term IMHO, so buckle up and enjoy the ride. 
Gold, that shiny yellow precious metal of the ages, traded higher for the week. Commodity indices have moved sideways year-to-date, but this masks significant dispersion as energy weakness diluted stronger performance in precious metals and industrial commodities. However, bearish investor positioning has pushed crude oil prices well below 'fair' value, setting the stage for a likely recovery closing out 2025. 

Partner with a Certified Financial Fiduciary at Castle Financial - In these volatile and uncertain times, the biggest value of working with a seasoned advisor, acting as a fiduciary, is having someone to help control emotions and not get caught up in making bad investment decisions. Let's face it, when times are turbulent, emotions will often trump logic, leading to devastating financial decisions. 

Email julie@castlefinancial.com or call us at 732-888-4994 to schedule a complimentary 30 minute consultation and second opinion if you are not already a valued client of Castle Financial.

This Week: Key Economic Data

Monday: Factory Orders. Motor Vehicles Sales.

Tuesday: Trade Deficit. ISM Services Index.

Wednesday: Treasury Buyback Announcement. 10-Year Treasury Note Auction. San Francisco Fed President Mary Daly speaks.

Thursday: Productivity and Costs. Weekly Jobless Claims. Wholesale Inventories. Consumer Credit. Fed Balance Sheet. Atlanta Fed President Raphael Bostic speaks.

Friday: St. Louis Fed President Alberto Musalem speaks.

^{Source: Investors Business Daily - Econoday economic calendar; August 1, 2025
The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.}

This Week: Companies Reporting Earnings

Monday:  Palantir Technologies Inc. (PLTR), Vertex Pharmaceuticals Incorporated (VRTX)

Tuesday: Advanced Micro Devices, Inc. (AMD), Caterpillar Inc. (CAT), Amgen Inc. (AMGN), Arista Networks, Inc. (ANET), Pfizer Inc. (PFE), Duke Energy Corporation (DUK)

Wednesday: McDonald’s Corporation (MCD), The Walt Disney Company (DIS), Uber Technologies, Inc. (UBER), Shopify Inc. (SHOP), AppLovin Corporation (APP), DoorDash Inc. (DASH), Brookfield Asset Management Ltd. (BAM)

Thursday: Eli Lilly and Company (LLY), Gilead Sciences, Inc. (GILD), ConocoPhillips (COP), Constellation Energy Corporation (CEG)

^{Source: Zacks, August 1, 2025. Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.}

“Judge each day not by the harvest you reap but by the seeds you plant.”

– Robert Louis Stevenson

What to Know About Excise Tax as a Business Owner

Federal and state excise taxes are for specific goods, services, and activities, such as fuel, tobacco, alcohol, airline tickets, and more. 

If your business is subject to excise tax, you must file a Form 720, Quarterly Excise Tax Return, to report the tax. You must also file this form every quarter.  

You can electronically file Form 720. Each industry may have its forms (ex: Form 2290, Heavy Highway Vehicle Use Tax). 

This information is not a substitute for individualized tax advice. Please discuss your specific tax issues with a qualified tax professional.

Tip adapted from IRS⁹

Pumpkin Bread

It started out as a seasonal treat. Now folks enjoy it all year round. Here’s how to make it for yourself.

Ingredients:

2 cups all-purpose flour
½ teaspoon salt and baking powder
1 teaspoon baking soda, ground cloves, ground cinnamon, and ground nutmeg
1½ sticks (¾ cup) unsalted butter, softened
2 cups sugar
2 large eggs
1 15-oz can pumpkin

Directions:

1. Preheat the oven to 325°F
   
   
2. In a medium bowl, combine the flour, salt, baking soda, baking powder, cloves, cinnamon, and nutmeg. Whisk until well combined; set aside.
   
   
3. With an electric mixer, beat the butter and sugar on medium speed until just blended.
   
   
4. Add the eggs one at a time, beating well after each addition. It’s okay if the mixture is grainy.
   
   
5. Add the flour mixture and mix on low speed until combined.
   
   
6. Pour the batter into greased 8x4” loaf pans and bake for 65-75 minutes. Let cool for 10 minutes.

Tip Adapted from Once Upon a Chef¹⁰

They can run side by side for thousands of miles; they are made of steel. While they constantly touch the ground, they seldom meet or touch each other. What are they?

Last Week's Riddle: They are sometimes stomped on, yet they can also be very tasty and sweet. What are they?
Answer: Grapes.

Mesquite Dunes
Death Valley National Park, California, United States

Footnotes and Sources

^{1. WSJ.com, August 1, 2025}

^{2. Investing.com, August 1, 2025}

^{3. CNBC.com, July 28, 2025}

^{4. CNBC.com, July 29, 2025}

^{5. WSJ.com, July 31, 2025}

^{6. MarketWatch.com, August 1, 2025}

^{7. WSJ.com, August 1, 2025}

^{8. WSJ.com, July 30, 2025}

^{9. IRS.gov, July 30, 2024}

^{10. Once Upon a Chef, March 18, 2025}