Stocks Climb Higher
All major US Stock indexes climbed higher last week, with the Nasdaq leading the way, gaining 3.91%. Year to date, the Dow is up 3.94%, the S&P 500 8.69% and Nasdaq 11.11%. Only the small cap Russell 2000 is down, (.43%)
The only 2 sectors within the S&P 500 not participating in the year-to-date upside, Healthcare, down (5.60%) and Energy (1.03%).
Foreign stocks also participated, moving higher 3.61% and emerging market stocks 2.53%.
90% of S&P 500 companies have reported 2nd quarter earnings with 81% beating estimates, according to Fact Set. At the end of the day, increasing profits tend to drive markets. The current Forward PE ratio of the S&P 500 sits at 22.1. The 5-year average is 19.9 and the 10-year 18.5. Are we overvalued?
Apple
In addition to positive profit news, Apple decided to join the party, pledging to invest 100 million in US manufacturing. News the iPhone may be eligible for the tariff exemption shot shares higher by 13.33% for the week, according to CNBC. Many investors are happy to see Apple moving higher as it is a significant and prominent position in many portfolios. Even after last week’s move higher, Apple is down (8.41%) for 2025.
Economic and Rate News
The 10-year US Treasury ended last week range bound, yielding 4.285%. Rates have trended lower, on the heels of the prior weaker than expected job numbers report and last week’s lower than expected ISM service sector report. Many are now believing the Fed will turn dovish and lower rates at Septembers Federal Reserve meeting.
The Fed will have several important data points announced prior to the September 17 rate announcement.
This week we will witness inflation reports, as the Consumer Price Index (CPI) reports on Tuesday and the Producer Price Index (PPI) reports Thursday. The PPI may garnish additional attention to see how much the tariff costs, so far, have crept into Producer costs, which is often a precursor to consumer prices.
The Fed will also hear several August data reports in early September prior to its September meeting. There should not be a lack of data to digest. Let’s hope the data is more accurate than not.
In summary, corporate profits along with the optimistic belief, tariff impact may not be as significant as previously believed, have propelled markets to new heights.
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All data sourced from Wall Street Journal August 8, 2025.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested directly.
