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The Week Ahead: Sentiment Change or Just a Blip & Buy the Dip?
Trading Calendar: Week of August 4th, 2025
RiskReversal Media
August 03, 2025
This Week
The big question heading into this week is: what was last week, really? A real shift in tone and potential exhaustion to the rally, or just another quick bout of volatility on the way higher? With fewer (known) catalysts on deck, this quieter week could give us a pure sense of the updated investor sentiment. As of Sunday evening, futures are slightly green. More on the week ahead in a second, but first, some of the news from over the weekend.
'Tariffs are starting to bite': Latest inflation, jobs data sparks Wall Street concern over US economy (Yahoo Finance)
The week kicked off with signs of strain in the labor market: The hiring rate fell to a seven-month low, and the quits rate, a key measure of worker confidence, dropped to just 2%.
On Wednesday, GDP data showed the economy rebounded at a 3% annualized pace in the second quarter, recovering from a surprise Q1 contraction driven by a pre-tariff surge in imports. But economists cautioned that the headline growth masked underlying softness. Sales to private domestic purchasers, a key proxy for consumer and business demand, rose just 1.2%, the weakest pace since 2022.
Then, after the Fed held interest rates steady, Thursday's release of its preferred inflation gauge, the Personal Consumption Expenditures (PCE) index, showed price increases accelerated in June as inflation remained above the Fed's 2% target. Consumer spending also showed signs of strain as real personal spending rose just 0.1% in June following a revised 0.2% drop in May.
The week culminated in a disappointing July jobs report, which offered the clearest sign yet that the labor market may be cracking. The US added just 73,000 jobs, far short of the 104,000 forecast. Even more striking were sharp downward revisions to May and June, which erased a combined 258,000 jobs, the largest two-month downgrade since May 2020.
OPEC+ makes another large oil output hike in market share push (Reuters)
OPEC+ agreed on Sunday to raise oil production by 547,000 barrels per day for September, the latest in a series of accelerated output hikes to regain market share, as concerns mount over potential supply disruptions linked to Russia. The move marks a full and early reversal of OPEC+'s largest tranche of output cuts plus a separate increase in output for the United Arab Emirates amounting to about 2.5 million bpd, or about 2.4% of world demand.
September Rate-Cut Odds Are Soaring (Bloomberg)
Friday’s softer-than-expected July jobs report has some on Wall Street jumping back into bets on a September interest-rate cut. Odds of a September cut surged to 69.2% after falling to 37.7% following Wednesday’s hawkish press conference from Federal Reserve Chair Jerome Powell and Thursday's hot personal consumption expenditures inflation report, according to the CME FedWatch Tool. Through the end of the year, the odds that rates are cut at least once rose to 95.2%, from 72.9% on Thursday. Odds of at least a half-point in cuts this year were up to 69.2% from 40.2% prior to the report. Though there's no Federal Open Market Committee meeting set for August, Powell will give his annual address at the Jackson Hole economic symposium later this month. "The achilles heel of Powell is he did leave the door open for responding to weaker employment," writes Andrew Brenner, head of international fixed income at NatAlliance Securities. "Jackson Hole meeting just got a lot more interesting."
‘The revisions are hard evidence’: White House struggles to justify firing of BLS chief over weak jobs numbers (CNBC)
National Economic Council Director Kevin Hassett on Sunday defended President Donald Trump’s sudden decision to fire the Bureau of Labor Statistics commissioner, without citing specific evidence. Hassett repeatedly pointed to the revisions in Friday’s employment data to justify Trump’s firing of BLS Commissioner Erika McEntarfer, but did not provide data showing the latest jobs report was “rigged,” as Trump claimed. He also rejected claims that Trump was “shooting the messenger” for the weaker-than-expected jobs numbers.
Unemployed Americans Endure Longer Job Searches in a Cooling Market (WSJ)
Job seekers are out in the cold this summer. Especially the ones who have been hunting for a while. Beyond the headline-grabbing top-line numbers in the jobs report for July was another striking piece of data: The number of people unemployed for at least 27 weeks topped 1.8 million, the highest level since 2017, not counting the pandemic’s unemployment surge. The median length of unemployment in the U.S. has also ticked up, from a seasonally adjusted 9.5 weeks in July 2024 to 10.2 weeks last month.
American Consumers Are Getting Thrifty Again (WSJ)
Americans are back on the hunt for a good deal. Consumer spending stagnated in the first half of this year, according to federal data issued last week, and the CEOs of Chipotle Mexican Grill, Kroger and Procter & Gamble, among others, are telling investors that their customers are more strapped—or appear to feel that way.
Berkshire Operating Profits Fall 4% in 2nd Quarter. Company Takes Write-Down of Kraft Equity Stake. (Barron’s)
Berkshire Hathaway’s operating profits after taxes were down 4% in the second quarter to $11.2 billion versus the same period a year ago, the company said Saturday
China Is Choking Supply of Critical Minerals to Western Defense Companies (WSJ)
China is limiting the flow of critical minerals to Western defense manufacturers, delaying production and forcing companies to scour the world for stockpiles of the minerals needed to make everything from bullets to jet fighters. Earlier this year, as U.S.-China trade tensions soared, Beijing tightened the controls it places on the export of rare earths. While Beijing allowed them to start flowing after the Trump administration agreed in June to a series of trade concessions, China has maintained a lock on critical minerals for defense purposes. China supplies around 90% of the world’s rare earths and dominates the production of many other critical minerals.
What a difference a week makes. This time last week, we were staring down a packed calendar — FOMC, GDP, PCE, mega-cap earnings, new tariffs, and a jobs number — yet options were pricing in some of the lowest short-dated volatility of the year. Implied vols were higher into the back half of the week, but still ended up underestimating just how bumpy things got.
This week feels like a bit of a mirror image: short-dated vol has jumped, but into a much lighter calendar on both the macro and earnings front. Last week, the SPX was pricing in a 1.3% move. This week? Nearly 2%.
This Week’s Expected Moves:
SPX/SPY: 1.9% (6100-6350)
QQQ: 2.2%
IWM: 3%
TLT: 1.5%
USO: 4.3%
A few quick takeaways: IWM options have been pricing in elevated movement for two weeks now — even before the other indices saw a volatility bump last week — and that’s still the case, with a 3% expected move this week, which is on the high side. TLT, on the other hand, is pricing in less movement than last week, which tracks given the lighter macro calendar. As for USO, volatility expectations have jumped from last week as oil initially rallied, then reversed hard on Friday amid slowdown fears. Weekend OPEC+ headlines could keep that volatility elevated to start the week.
Economic Calendar:
Tuesday
10am - ISM Services PMI (Jul)
Wednesday
2pm+ - Fed, Cook, Collins, Daly Speeches
Thursday
8:30am - Initial Jobless Claims
10am - Fed Bostic speech
Friday
10am - UoM Inflation Expectations
10:20am -Fed Musalem speech
This week lacks megacaps but still features —a a large cross section of sectors including PFE, MCD, PLTR, TTD, SHOP, AMD, DIS, and more:
Earnings (with expected moves):
Monday
Pre-market: W 12%
After-hours: PLTR 11%, HIMS 15%, MELI 8%
Tuesday
Pre-market: PFE 4%, CAT 4.5%, BP 3.5%
After-hours: AMD 8%, SMCI 12%, SNAP 16%, RIVN 9.5%, OPEN 22%
Wednesday
Pre-market: DIS 5.5%, UBER 7%, SHOP 10.5%, NVO 6.5%, MCD 3%
After-hours: APP 15%, DKNG 9%, ELF 12%
Thursday
Pre-market: LLY 6%
After-hours: TTD 12%, XYZ 10%, PINS 10%, TEAM 11%
Friday
Pre-market: FUBO 12%
Last week saw a few sessions where stocks gapped higher but quickly ran into sellers — a noticeable shift from the tone that’s defined much of the past month of this rally. With the spike in volatility late in the week, we could get a quick read early this week on whether that was just noise or the start of something bigger. Watch how early-week rips or dips are treated. Even with Friday’s selloff, buyers showed up late and kept things from unraveling into the close. That familiar dip-buying playbook could get tested early this week, and how the tape responds may tell us a lot about where we’re headed next.
