What investors should do as the stock market flashes warnings beyond Trump's tariffs

Dow Jones
Aug 02

MW What investors should do as the stock market flashes warnings beyond Trump's tariffs

By Philip van Doorn

Also: A bipartisan plan to expand the home supply, an investment income strategy that lowers risk and advice from the Moneyist.

Early on Friday, U.S. stocks headed south as investors reacted to President Donald Trump's announcement of increased tariffs on imports from dozens of countries to be effective Aug. 7, along with an immediate 35% tariff rate on imports from Canada, with an exception for goods that move under the U.S.-Mexico-Canada trade agreement.

A weak employment report didn't help.

Before Trump's latest tariff rumblings, there were signs that the U.S. stock market could be ripe for a pullback. Michael Brush detailed the factors pointing to several months of stock market volatility and had suggestions on how to prepare for it.

Through Thursday, the S&P 500 SPX had returned 8.6% for 2025 with dividends reinvested. That was quite a recovery considering that as of April 8, the U.S. large-cap benchmark index was down 15% for the year, with most of that decline following Trump's April 2 "liberation day" tariff announcements.

Joseph Adinolfi covered increased chatter about a speculative bubble for stocks and other speculative assets such as bitcoin (BTCUSD). Here is how the current market environment stacks up against previous asset bubbles that preceded broad declines.

Read: Volatility suggests AI is not in a bubble - at least not yet, says Bank of America

A measured approach: Where Morgan Stanley is looking for value after powerful rebound in U.S. stocks

More coverage of investors' recent exuberance:

-- This is why meme stocks have 'bubbled back to the surface,' fund manager says

-- Heavily shorted stocks have been on a tear lately. Consider this before buying into the rally.

A big M&A deal

In a blockbuster deal, Union Pacific Corp. (UNP) agreed to buy Norfolk Southern Corp. $(NSC.AU)$ for $85 billion. James Rogers broke down the details, including a fat premium for Norfolk's shareholders.

Big tech flies high - mostly

Several of the largest U.S. technology companies reported their quarterly results this week and there were many eye-popping numbers:

-- Why Microsoft's 'must-own' stock looks even more like a no-brainer after earnings

-- Meta's growth strikes Wall Street as incomprehensibly strong, and the stock rockets

-- Apple's earnings were good, but the initial stock move implies Wall Street is wary

-- Qualcomm's stock falls after earnings. Here's where investors may be disappointed.

Other news from companies

Second-quarter earnings season is in full swing. Here is some of MarketWatch's coverage of corporate announcements this week:

-- Robinhood takes 'victory lap' after big jumps in quarterly profit and revenue

-- Motorcycle sales keep falling, but Harley's stock is soaring.

-- Coinbase misses the mark on quarterly sales, including this all-important revenue stream

-- Kraft Heinz takes $9 billion charge for its stock's 'sustained decline' as it ponders strategic options

-- Reddit's stock is soaring after earnings. This is why.

-- Starbucks vows a 'wave of innovation' next year. Will it get in the way of quicker service?

-- Moderna to cut more than 800 jobs this year as it burns through cash

-- MicroStrategy just posted a huge profit. It's the second time riding on an accounting rule change.

The Moneyist tackles a tricky retirement scenario

Quentin Fottrell - the Moneyist - helped a reader decide whether to sign up for long-term-care insurance. The reader is 64, has built up a good retirement nest egg, but has Type 1 diabetes and wonders if it is too late (or too expensive) for him to sign up. Here are things for him to consider as he prepares to end his career.

More from the Moneyist:

-- Will your spouse automatically inherit your 401(k)?

-- 'He spent every dime': My daughter's husband is in prison. Is she responsible for his debts?

-- Are Americans squandering their retirement savings on dining out?

A warning on health insurance

The One Big Beautiful Bill Act signed by Trump on July 4 extended the 2017 tax cuts. The legislation will also end a tax credit that has helped people cover the cost of health insurance acquired under the Affordable Care Act of 2010.

About 24 million people arrange for health-insurance coverage through ACA exchanges. Andrew Kesher explained how the ending of certain ACA subsidies will affect people at different income levels and what they can do now to limit the financial fallout.

Read on: This little-noticed update to Medicaid rules could burden seniors with thousands in medical debt

Hope for a smoother expansion of the U.S. housing market

It isn't a stretch to expect people to be enthusiastic about a bipartisan plan in Washington. A housing bill sponsored by Republican Sen. Tim Scott of South Carolina and Democratic Sen. Elizabeth Warren of Massachusetts was advanced unanimously by the Senate Banking Committee. Aarthi Swaminathan explained how the bill, if passed, could greatly expand the lower-cost portion of the housing market.

A successful strategy for selecting growth stocks

Brett Arends wrote that investors "gripped by momentum" might be "buying assets that have already gone up in the hope that they will keep going up." He described stock-selection strategies for investors looking for long-term growth - including looking back at companies' five-year financial histories - that have greatly outperformed the broad market over the past several decades, according to Rob Arnott of Research Affiliates.

This investment strategy can boost monthly income while cutting stock-market risk

Here is an explanation of how some exchange-traded funds make use of covered call options to provide monthly income while pursuing long-term growth in the stock market.

What to watch - and which streaming services to pay for - in August

Mike Murphy broke down featured offerings for August and pricing for eight streaming services.

Want more from MarketWatch? Sign up for this and other newsletters to get the latest news and advice on personal finance and investing.

-Philip van Doorn

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

 

(END) Dow Jones Newswires

August 01, 2025 12:18 ET (16:18 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.

At the request of the copyright holder, you need to log in to view this content

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Most Discussed

  1. 1
     
     
     
     
  2. 2
     
     
     
     
  3. 3
     
     
     
     
  4. 4
     
     
     
     
  5. 5
     
     
     
     
  6. 6
     
     
     
     
  7. 7
     
     
     
     
  8. 8
     
     
     
     
  9. 9
     
     
     
     
  10. 10