Macro Events & News
The week began on uneasy footing as markets digested news of the Trump administration imposing 50% tariffs on steel and aluminum and accusing China of violating a prior agreement to export rare earth minerals. These developments threatened a re-escalation of the trade war. However, tensions quickly eased after the administration announced the UK would be excluded from the 25% increase to metal tariffs or markets interpreted this as yet another “TACO” moment (Trump Always Chickens Out). Optimism grew further on Thursday after President Trump reported a “productive” phone call with Chinese President Xi Jinping, followed by an announcement that trade representatives would meet next week to continue negotiations. Risk appetite was high for most of the week, with tech stocks leading the way.
There was late-day volatility on Thursday stemming from an unexpected public spat between Trump and Elon Musk over Trump’s “Big Beautiful Bill,” which Musk had criticized on his social media platform. The dispute escalated quickly with name-calling, Trump threatening to cancel federal contracts with Musk-owned companies, and Musk claiming the Epstein files had never been released because Trump was implicated. The clash rattled markets, sending Tesla (NASDAQ:TSLA) sharply lower and wiping out $152 billion in market cap in a single session. Fortunately, markets recovered on Friday as attention shifted back to more material drivers.
On the macro front, producer’s manufacturing index (PMI) and employment data provided a mixed outlook. The May manufacturing PMI came in at 48.5, below expectations and marking the third consecutive month of contraction. Services PMI also fell below the 50 threshold for the first time since June 2024, suggesting broader weakness in the economy. Still, labor market data showed resilience with 139,000 jobs added versus the 130,000 expected and unemployment holding steady at 4.2 percent. However, there were downward revisions to prior months’ jobs added numbers.
The 10-year Treasury yield bounced around over the course of the week but ended higher at 4.5% as economic indicators suggested fewer rate cuts. The VIX fell back this week to 16.77.
All the major indexes were able to close out this week higher: the Dow up 1%, the S&P 500 up 1.5%, and the Nasdaq up 2%.
Watchlist News
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Apple Inc (NASDAQ:AAPL) began the week with steady gains as it heads into its annual Worldwide Developers Conference (WWDC) next week. Shares climbed back above $200, closing at $203.92 on Friday, as the market responded positively to expectations of major AI announcements and potential new partnerships set to be unveiled at the event.
august bear notes
Apple is forming a nearly textbook symmetrical triangle pattern on the chart as it heads into WWDC, setting the stage for a pivotal week that could determine the stock’s next direction. While shares ended slightly higher this week, likely due to easing trade tensions, company-specific news was less encouraging: Needham downgraded the stock citing regulatory risks and weakening fundamentals, early WWDC reports suggest no major product launches, and Apple lost its bid to delay App Store reforms that could impact sales and margins. The muted price action reflects investors waiting on next week’s developments, but these negative headlines shouldn’t be overlooked. Apple will need to deliver a compelling future especially around AI at WWDC, or the stock risks breaking lower.
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Alphabet Inc (NASDAQ:GOOG) shares traded under a little bit of pressure this week as ongoing antitrust concerns and investor anxiety about threats to its core search business persisted, despite the momentum from Google I/O and encouraging Q1 results. But it manage to close slightly higher this week.
august bear notes
Google faces persistent regulatory headwinds and intensifying competition in search from rapidly improving AI chatbots, yet the stock showed resilience this week with a notable bounce from the $168 level and a push back toward $175 despite limited new developments. While Google I/O provided a burst of momentum, the market is now looking for tangible execution. Ongoing updates from AI rivals and a lack of tangible progress from Google serve as reminders that the company’s track record for delivering on promises has been inconsistent.
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Meta Platforms (NASDAQ:META) stock broke out this week, pushing past $700 before settling just under the psychological resistance level. The company’s aggressive push into AI integration across its platforms is fueling investor optimism, sharing this week that it will be able to fully automate ad creation by 2026.
august bear notes
Meta’s breakout above $700 this week was a welcome development, with easing tariff concerns likely contributing to the move. News of AI-powered ad creation tools may have been a surprise for some, but this has always been a key part of the bullish case for Meta’s AI initiatives. These tools should make agencies’ work easier and further enhance Meta’s attractiveness to advertisers, while also providing a significant boost for small and medium businesses running campaigns. This $700 level could become support going forward, but that will depend on Meta’s AI developments proving successful, a concern since current Meta AI offerings are not yet especially useful.
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NVIDIA Inc (NASDAQ:NVDA) shares rose this week and appeared to make a breakout after the news of productive talks between Trump and Xi. But the public feud between Musk and Trump sent it lower along with the market. It did recover on Friday along with most of tech and helped by positive commentary around AI growth from Broadcom (NASDAQ:AVGO) who reported Thursday after market close.
august bear notes
NVIDIA remains stuck in the $135–$145 range despite a stellar Q1 report and widespread optimism about AI spending across industries, as highlighted on recent earnings calls and investor events. While potential easing of export controls and CEO Jensen Huang’s commitment to the China market offer additional encouragement, the stock continues to trade in a tight band, partly due to heavy retail and institutional interest and elevated options activity. Social media posts highlighting insider selling have sparked some concern, but these sales mirror historical patterns and appear to be planned, not a sign of lost confidence. The current period of consolidation may ultimately benefit long-term investors.
