How Did the Most Important Week of 2025 Unfold? (28 July – 2 August)

This week wasn’t just busy – it was crucial. Between Trump’s long-threatened tariff deadline, a major miss in US jobs data, and over 150 major companies reporting earnings so far, markets were forced to quickly rewrite the Q3 outlook. Here’s what happened and why it mattered.

Tariffs Trigger Real Fallout – The 1 August Deadline Arrives

On 1 August, Donald Trump formally announced and implemented sweeping new tariffs under his “America First 2.0” trade mandate. These weren’t just symbolic – they were targeted and immediately market-moving.

Key changes:

• India: 25% tariffs on auto parts, textiles, and steel
• Taiwan: 20% on semiconductors and electronics
• South Korea: 15% on vehicle exports and memory chips
• Canada: 35% on aluminium, lumber, and dairy
• EU: 30% tariffs on machinery, wine, and luxury goods
• Mexico: 90-day grace period before 30% tariffs kick in

(Source: Reuters) 

View this post on Instagram

A post shared by Blogs On Markets (@blogs.on.markets)

Markets had been bracing for it, but the scope and timing still shocked investors. The S&P 500 dropped sharply after the announcement, with global exporters, autos, and semiconductors hit hardest.

Labour Data Shocked Everyone

The US July jobs report was a major disappointment:

• Only 73,000 jobs added vs expectations of 109,000
• May and June revisions erased 258,000 jobs
• Unemployment rose to 4.2%

(Source: Bloomberg, Financial Times)

This wasn’t just a “miss”, it was the worst 3-month stretch for jobs since the GFC (ex-COVID). The market instantly priced in a 90% probability of a Fed rate cut in September.

Earnings: Banks Resilient, Amazon Misses, Mixed Bag Across Sectors

Roughly 30% of the S&P 500 reported this week. And while the spotlight was on Big Tech, it was actually banks that outperformed relative to expectations.

Highlights by sector:

• Banks (e.g. JPMorgan, Goldman Sachs): Beat earnings forecasts as NII remained solid and trading revenues surprised on the upside. Sector led the S&P.
• Tech:
  • Amazon shares dropped ~7% after AWS margins shrank to ~32.9%, cloud growth lagged behind peers – even as retail revenue rose ~13%
  • Apple delivered strong third-quarter revenue but warned that US tariffs would add $1.1bn in costs over the period
  • Microsoft and Meta beat estimates with strong AI and advertising revenues
• Industrials: Boeing and Caterpillar delivered decent results, but warned of cost inflation and slowing global orders
• Consumer Staples: P&G and Coca-Cola performed well but flagged weakening U.S. demand
• Healthcare: Mixed – Pfizer missed, but UnitedHealth beat and raised guidance

Overall: Earnings were not bad, but not strong enough to counter macro fears or restore risk appetite.

Below is our coverage of key earnings announced last week:

View this post on Instagram

A post shared by Blogs On Markets (@blogs.on.markets)

View this post on Instagram

A post shared by Blogs On Markets (@blogs.on.markets)

How & Why Markets Moved – Cross-Asset Breakdown

Equities:

• S&P 500: ‑2.4% on the week
• Nasdaq: ‑2.2%, led by weakness in Amazon, Nvidia, and Tesla
• Dow Jones: ‑2.9%, hit by industrials and banks despite strong earnings
• Europe (Stoxx 600): ‑1.9%, dragged by LVMH, SAP, and Deutsche Bank
• India (Sensex): Closed flat; IT underperformed, banks held up

Bonds:

• US 10Y yields dropped to 4.22% from 4.36% on flight to safety post-payrolls
• Yield curve steepened slightly as front-end rallied harder
• Bunds and Gilts also rallied on US readthrough

FX:

• DXY fell 1.3%, biggest one-day drop in two months
• EUR/USD jumped back above 1.10, and GBP/USD rose to 1.31
• INR weakened slightly due to tariff implications, but RBI held the line

Commodities:

• Oil (Brent): +2.5% to $86.30/barrel on supply cuts and Mexican tariff delay
• Gold: Jumped 1.8% to $2,052/oz – classic safety bid
• Aluminium & copper: Fell on trade concerns

Derivatives (F&O):

• VIX spiked to 18.9, highest since May
• Put/call ratios rose sharply, indicating downside hedging
• S&P 500 futures saw large sell orders post-payrolls and tariff release
• Options implied volatility up across major tech and trade-sensitive stocks

What’s Coming Next (5-9 August)

US CPI (Thursday): Will inflation stay steady enough to justify rate cut bets?

ISM Services, Factory Orders: Early signs of Q3 slowdown or resilience?

Earnings season wraps: Watch Disney, Uber, McDonald’s, Coinbase

China: Trade and inflation data — signs of domestic stimulus or more weakness?

Summary

Trump’s 1 Aug tariffs hit hard – trade war is back, with detailed new duties on India, Taiwan, EU, and others.

US job growth collapsed, revisions painted a worse picture – Fed now likely to cut in September.

Bank earnings led, tech was mixed, Amazon disappointed – cross-sector divergence showed up clearly.

Markets sold off across equities, bonds rallied, dollar fell, and volatility rose.

Disclaimer: The information in this article is for educational and informational purposes only and does not constitute financial, investment, or professional advice. While every effort has been made to ensure accuracy using publicly available sources such as Bloomberg, Reuters, and the Financial Times, readers should conduct their own research or consult a licensed advisor before making any financial decisions. All views expressed are personal and do not reflect the opinions of any employer or affiliated institutions.