Despite plenty of volatility, stocks managed to log a positive first full week of August. The Dow Jones Industrial Average (DJI) kicked off things with its best day since May 12, but pivoted lower alongside the S&P 500 Index (SPX) and Nasdaq Composite (IXIC) after President Donald Trump teased new duties for the semiconductor and pharmaceutical sectors. Dismal services data for July only added insult to injury, but stocks bounced back after (AAPL) confirmed it will invest another $100 billion in U.S. manufacturing.
The Dow dipped again amid blue-chip earnings, but news that Trump's 100% levies on imported chips would not apply to companies “building in the United States" injected some optimism back into the market. All three major indexes were eyeing weekly wins as gold futures skyrocketed, with the IXIC also on track for its second-straight record close as the SPX looked to finish Friday with an all-time high of its own.
Earnings Ins and Outs
There was no shortage of corporate earnings reports this week. The shares of Wayfair (W) surged to 52-week highs after upbeat results, while Yum! Brands (YUM) stock took a hit after the company narrowly missed second-quarter estimates. Pfizer (PFE) issued a beat-and-raise, McDonald's (MCD) beat on the top and bottom line, and Duolingo (DUOL) blew past second-quarter expectations.
Super Micro Computer (SMCI), Snap (SNAP), and Airbnb (ABNB) did not fare as well, with each stock gapping lower after their respective quarterly reports. Cybersecurity giant Fortinet (FTNT) dragged the sector lower with its dismal outlook, and Trade Desk (TTD) shares were on track for their worst day ever after the company warned of potential tariff impact. On the other hand, record net sales pushed Monster Beverage (MNST) stock to all-time highs.
Stocks to Watch Going Forward
Several names currently present intriguing technical setups. American Eagle Outfitters (AEO) has been engulfed in controversy lately, but much like sector peers Abercrombie & Fitch (ANF) and Dick's Sporting Goods (DKS), it could still benefit from a short squeeze. Plus, Nvidia (NVDA) and Workday (WDAY) are among the best SPX stocks to own in August, from a historical standpoint, while Dollar Tree (DLTR) is one of the worst. It's also worth watching Chewy (CHWY), Coinbase Global (COIN), and MicroStrategy (MSTR), as all three stocks are now flashing bullish signals.
Keep Calm and Carry On Next Week
Earnings season carries on next week with reports from AMC Entertainment (AMC), Applied Materials (AMAT), CAVA Group (CAVA), Cisco (CSCO), Deere (DE), JD.com (JD), On Holding (ONON), and Tapestry (TPR), to name a few. Inflation readings will be in focus as well, with retail sales and manufacturing data slated for release, in addition to the consumer price index (CPI) for July. Amid recent market uncertainty, our own Senior Quantitative Analyst Rocky White uncovered a list of long-term stock winners, and Senior Vice President of Research Todd Salamone explained why the SPX outlook hasn't changed.
