It continues to be a news-heavy year, and the President once again dominates the conversation. But before we jump into that, we’d be remiss to ignore the biggest news of the month. Taylor’s and Travis’ engagement. “It’s difficult to quantify Taylor Swift’s impact on the stock market. But on the day her engagement was announced (August 26), the S&P 500 moved slightly higher. I suspect this positive reaction is coincidental, but ‘Swiftonomics’ appears to be a thing.” The Motley Fool (Aug.29).
I bring up Taylor because again, despite news that could have negatively impacted the market, it continued to just “Shake It Off” and keep moving forward.
Let’s dive in.
- Index Performance
- S&P 500 up 2.0% for the month, 10.8% year to date.
- Nasdaq Composite up 1.7% for the month, 11.6% year to date.
- MSCI ACWI ex USA up 3.5% for the month, 22.2% year to date.
- Source: YCharts as of August 29, 2025
- August 1: Stocks, Bond Yields, and the dollar drop sharply as the day is flooded by hard to digest news. (Reuters: https://www.reuters.com/world/china/global-markets-wrapup-9-graphics-2025-08-01/)
- The jobs report from the Bureau of Labor Statistics came in below economists’ expectations (73,000 versus 110,000). They also revised May and June numbers down significantly (June was reduced to 14,000 from 147,000), causing markets to question the strength of the U.S. economy.
- The Yield on 10-Year Treasury bonds dropped dramatically at the beginning of August after a weak jobs report and new tariff announcements. This was the lowest level it has reached in the past 3 months.
- Trump added further fuel to market uncertainty by firing the Commissioner of the U.S. Bureau of Labor Statistics. It is rare to see bureaucrats in America seemingly punished for “bad” news.
- The President continues to test his authority for dictating tariff policy and influence over the Federal Reserve. Both issues face new challenges in the courts.
- The U.S. Court of Appeals upheld an earlier decision that the administration’s use of tariffs is illegal. The White House has until October 14th to appeal the decision to the Supreme Court of the United States. The tariffs will remain in place until that time.
- President Trump has attempted to fire Federal Reserve Governor Lisa Cook, although questions abound as to whether the President has the power to do so. The matter is currently pending in the U.S. District Court, and as of writing this, there has been no ruling. A decision here may have substantial implications for the Federal Reserve’s long-standing independence to set monetary policy free from political influence. As of this writing, nearly 600 economists have thrown their support behind Cook. (CNBC: https://www.cnbc.com/2025/09/02/trump-lisa-cook-fed-powell-fraud.html)
- Earnings for the second quarter have been very strong, with over 80% of S&P 500 companies reporting as of August 29th.
- The Earnings Growth (blended rate) is 11.9%. This is the third consecutive quarter with double digit earnings growth for the S&P 500.
- Guidance has been mixed. Analysts are lowering estimates for earnings looking forward based on concerns around inflation and tariffs.
- The top seven companies in the S&P 500 index, or the “Magnificent 7”, have reported earnings growth of 26.6%, much higher than the rest of the index. However, this is below their average growth rate of 31% in the last four quarters. Analysts expect their earnings growth to continue to slow, with estimates in the mid-teens for the next four quarters.
August was anything but a quiet summer month. From its first day, we found ourselves drowning in news overload. Weak jobs report, new wave of tariffs, and unprecedented actions from the President had the market pundits arguing.
The first couple days of August followed this sour start, but markets quickly turned around as hopes of a rate cut in September rose sharply. Markets picked up steam on the announcement of Apple being exempt from semiconductor tariffs and the company making an investment in U.S. manufacturing. (Wall Street Journal: https://www.wsj.com/tech/apple-invest-american-manufacturing-trump-5c2c35a7?reflink=desktopwebshare_permalink).
Earnings continued to roll in for the month in a positive way, helping investors ease concerns about the weakening economy. In addition, it seems optimism for future rate cuts is proving stronger than concerns over stagflation (when we have both weak growth and high inflation). Federal Reserve Chairman Jerome Powell further fanned these flames of rate cut expectations in his Jackson Hole, WY speech during the month.
Controversy heated up at the end of the month as the President alleged Federal Reserve Governor Lisa Cook’s possible mortgage fraud. As noted earlier, the news here is still evolving, but the move is incredibly unusual. For some, this raises questions about the future independence of the Federal Reserve from political influence. Markets generally like the idea of monetary policy being decided outside of the political sphere.
If the tariff confusion wasn’t already leaving your head spinning, the U.S. Court of Appeals threw napalm on the issue by siding with the New York-based Court of International Trade that the President’s tariffs are illegal. The tariffs will be allowed to stay in place until October 14th, allowing the Administration time to appeal the Court of Appeal decision to the Supreme Court, an appeal they are likely to make. The whole topic is completely unprecedented, and it is almost impossible to truly understand how to interpret all the moving parts.
Conclusion:
Every month this year has had some crazy headlines, and August was no different. Things got weirder, and the market went higher despite plenty of headlines that might suggest stocks should retrace some of the gains made during the year.
We don’t know what the future holds for us, but we do see a clear trend: Markets are quick to shake off fear and buy dips. We are sure that volatility will hang around, but it seems so does optimism.
Jordan Kaufman, CFA, CFP®
Chief Investment Officer
Green Ridge Wealth Planning
Disclosure:
Green Ridge Wealth Planning, LLC is a registered investment adviser. The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment/tax advice. The investment/tax strategies mentioned here may not be suitable for everyone. Each investor needs to review an investment/tax strategy for his or her own particular situation before making any investment decision(s). You are responsible for consulting your own investment and/or tax advisor as to the consequences associated with any investment.
The opinions referenced are as of the date of publication and are subject to change due to changes in the market or economic conditions and may not necessarily come to pass. Any opinions, projections, or forward-looking statements expressed herein are solely those of the AUTHOR, may differ from the views or opinions expressed by other areas of Green Ridge Wealth Planning, LLC, and are only for general informational purposes as of the date indicated.