NVIDIA Shines, Consumers Sulk, Markets Slip

Key Takeaways

1. Markets had a panic attack over weak jobs data (73K vs 100K expected), with massive prior-month revisions revealing economists were way off

2. Trump's escalating tariff war hit Switzerland hardest (39% tariffs), while European markets showed surprising resilience

3. Fed stayed put on rates but markets now expect September cuts after one bad report – classic overreaction

4. Asian markets couldn't agree on direction, with Japan volatile, Hong Kong weak, and China steady

5. Real opportunities emerging in European value stocks as short-term noise creates long-term buying chances

Let’s start with the Fed. Powell hinted at Jackson Hole that rate cuts might be on the horizon, which gave markets a sugar rush. But then President Trump decided to try and fire Fed Governor Lisa Cook, raising questions about whether central banks are still running monetary policy—or just waiting for their next pink slip. Long story short, Wall Street is now placing its bets on a September cut, while everyone else is just wondering who’s in charge.

Across the Atlantic, the Bank of England decided to cut rates again, the fifth time since last summer. Inflation’s still at 3.5%, so it feels a little like throwing a bucket of water on a grill that’s still smoking. Meanwhile, in the eurozone, inflation ticked up ever so slightly to 2.1%. It’s not exactly a crisis, but traders acted like Mario Draghi had just announced he was coming out of retirement.

Speaking of drama, Trump’s tariffs hit another legal roadblock. A federal appeals court ruled most of them illegal. But don’t pop the champagne yet—the tariffs stay in place until at least October while the Supreme Court decides whether to make things even messier. Global trade is starting to look less like Adam Smith and more like a reality show elimination round.

On the earnings front, NVIDIA once again flexed its muscles with a 56% year-over-year revenue jump and a $60 billion buyback. If you ever feel like your portfolio is underperforming, just remember that even Buffett said he missed that train. Meanwhile, Kraft Heinz announced plans to split into two companies, probably so investors can be equally confused by two sets of earnings instead of one.

Markets weren’t impressed, though. Last Tuesday, stocks tumbled with the S&P down over 1% and Treasury yields spiking to nearly 5%. When bond markets throw a tantrum, stocks usually get grounded. It was one of those weeks when you could almost hear Ben Graham whispering, “Mr. Market is having a mood swing—again.”

Commodities joined the party, with gold blasting past $3,500 an ounce. That’s great if you’re into shiny rocks, less so if you’re a central banker trying to prove you’re still credible. Agricultural commodities also climbed, partly because weather and geopolitics are doing their best to remind us that food doesn’t magically appear on grocery store shelves.

Finally, consumer confidence data showed people are feeling less like spending and more like hiding under a financial blanket. Travel plans are down, AI is replacing Google for shopping advice, and sustainability is suddenly cool again. In other words, Main Street is telling us what Wall Street often ignores: people notice when the world feels shaky.

So that’s your week in markets. As Buffett would say, the short term is a voting machine and the long term is a weighing machine. Right now, markets are shouting, but the fundamentals will eventually have their say.

Happy investing!
Josh

The information is provided for educational purposes only and does not constitute financial advice or recommendation and should not be considered as such. Do your own research.