Tariffs, tech and tension: Wall Street’s rollercoaster week

2 minutes read

06 August 2025

Tariffs, tech and tension: Wall Street’s rollercoaster week

The story on Wall Street this week played out like a drama, full of tension, unexpected turns, and powerful players making bold moves. Bulls and bears jostled for control, battered by new tariffs, unsteady jobs data, and a rush of corporate earnings. As investor nerves frayed, some wise words from market veterans provided a steadying hand. Here’s how the week’s narrative unfolded, through the eyes of those living it.

Turbulence returns as tariffs and jobs data rattle the street

Monday dawned with a promise, as major indices tried to stage a rebound after a bruising previous week. Palantir’s earnings sparkled; whispers of a possible Federal Reserve rate cut in September lifted spirits. But beneath the surface, data showed that nearly half of all S&P 500 companies were trading below their critical averages, a sign not all boats were rising with the tide.

By midweek, President Trump added fuel to the fire with talk of more tariffs, this time targeting pharmaceuticals, chips and semiconductors. “Tariffs number one is what to be the news, as well as the market direction in conjunction,” warned Charlie Ashley, a portfolio manager at Catalyst Funds, in a call with CNBC. This policy seesaw left the market with a case of whiplash. The VIX, often called Wall Street’s “fear gauge”, surged past the 20 mark, and the S&P 500 took a sharp step back.

It wasn’t just tariffs shaking confidence. A weak jobs report underlined doubts about the strength of the recovery: only 73,000 new jobs added, well below expectations, and the unemployment rate ticking up to 4.2%. “The large negative revisions to the May and June nonfarm payrolls data suggests it was weaker than we thought,” said Collin Martin, fixed income strategist at Schwab. The numbers pointed to cracks showing in parts of the economy battered by the tariff war, especially manufacturing and retail. Bar chart showing the daily percentage change of S&P 500, Dow Jones, and Nasdaq, with Nasdaq showing the largest decline of -0.65%.

Searching for light: Tech shines and the Fed steadies nerves

Despite the gloom, there was a glimmer of optimism. Tech giants like Palantir and Nvidia bucked the downward trend, powered by robust earnings and, in Nvidia’s case, a huge valuation boost when the US government relaxed AI chip restrictions to China. Microsoft crested the $4 trillion mark, testament to the sector’s staying power even in storms.

But experts called for caution. “Signs of fatigue are surfacing,” said Hacket, Financial’s chief strategist, noting that July’s strong market has run into seasonal headwinds and investor fatigue. Meanwhile, Morgan Stanley’s Mike Wilson suggested, “Expect a modest pullback in the third quarter as tariffs hit consumers and corporate balance sheets”, he even warned of a possible 10% correction. His advice: brace for volatility, stay selective, and watch for bargains in smaller, undervalued stocks.

Amid the uncertainty, hope began to build that the Fed would step in. With policy rates on hold and the next big decision due in September, all eyes are now fixed on central bankers as they assess whether to cut rates to support growth. As Collin Martin calmly put it, “A September rate cut is now likely given the labour market downward revisions”.

Investors had to manage their emotions while digesting dizzying headlines, expert warnings, and data surprises. The best advice? Don’t get caught on autopilot. “Over the last couple of weeks, we have noted that investors should expect a modest pullback in the third quarter,” said Wilson, echoing the caution echoing across trading desks.

For now, Wall Street’s story is filled with plot twists: tariffs, tech, and the ever-watchful Fed. If this week is any guide, the closing chapters of summer promise just as many turns. Stay buckled in.

Disclaimer: The views and recommendations made above are those of individual analysts or brokerage companies, and not of Winvesta. We advise investors to check with certified experts before making any investment decisions.