Global Highlights This Week: Weak Jobs and Tariff Concerns—Can U.S. Stocks Regain Momentum This Week?
Last week, all three major U.S. stock indices recorded declines, with the S&P 500 falling 2.4%, its worst performance since May 23, the Dow dropping 2.9%, its worst week since April 4, and the Nasdaq down 2.2%.
The turning point came on Friday, when the U.S. July nonfarm employment data, released that day, fell far short of expectations, with significant downward revisions to May and June job figures. This shattered market optimism about economic strength and reignited speculation of a September Fed rate cut.
Additionally, a new round of tariff measures by U.S. President Trump took effect on Friday, adding further pressure on stocks.
This week’s U.S. economic calendar is relatively light, but Tuesday’s release of the July ISM Services Index is expected to be a market focal point.
The prior manufacturing ISM index missed expectations, and combined with weak jobs data, it has heightened concerns about slowing growth.
If services data also shows weakness, markets will likely solidify expectations of a September rate cut. LSEG data indicates U.S. money markets now price in about a 90% chance of a September cut, up from less than 45% before the jobs data.
In Europe, the Bank of England will announce its interest rate decision, with markets widely expecting a potential rate cut.
In Asia, the Bank of Japan will release meeting minutes, likely revealing policy discussions prior to its recent U.S.-Japan trade agreement. Additionally, India will unveil its latest interest rate decision.
The U.S. Q earnings season is over halfway, with about 81% of companies beating analyst expectations, above the 76% average over the past four quarters.
Meta and Microsoft posted strong earnings last week, driving significant gains in their stock prices. In contrast, Amazon and Apple saw their shares decline after their quarterly reports.
This week, Dow components Disney, McDonald’s, and Caterpillar will release earnings, offering investors a window into the broader economy.
In Europe, Novo Nordisk will report on Wednesday, its stock having plummeted over 32% this week due to a lowered annual guidance.
Novo Nordisk’s biggest rival, Eli Lilly, will report on Thursday. Investors are left wondering whether Novo’s performance signals Eli Lilly eating into its market share or if both have hit a ceiling in the GLP-1 weight-loss drug market.
This Week’s Earnings Highlights
Overview of Key Overseas Economic Events This Week :
Monday: U.S. June factory orders m/m, Eurozone August Sentix Investor Confidence Index
Tuesday: France/Germany/Eurozone July Services/Composite PMI final, UK July Services/Composite PMI final, U.S. July S&P Global Services/Composite PMI final, U.S. July ISM Non-Manufacturing PMI
Wednesday: Eurozone June retail sales, U.S. July Global Supply Chain Pressure Index, U.S. EIA crude inventories to August 1, India RBI interest rate decision
Thursday: U.S. 10-year note auction to August 6, Germany June adjusted trade balance, France June trade balance, Bank of England interest rate decision, minutes, and monetary policy report
Friday: Bank of Japan July monetary policy meeting summary, Mexico central bank interest rate decision