Markets In Focus: The Week That Was and What’s On Tap
THE WEEK THAT WAS
U.S. equities posted their best weekly performance in nearly four months for the week ending August 7, with the S&P 500 gaining 3.6%, the Nasdaq surging 5.2%, the Dow advancing 3.0%, and the Russell 2000 adding 1.1%. Semiconductors led the charge, with the iShares Semiconductor ETF climbing more than 7% on the week.
The catalyst was Friday’s July employment report, which delivered a significant shock. The economy shed 23,000 jobs against expectations of an 80,000 gain, and prior months were revised down by a combined 103,000. Wage growth slipped to 3.2% year over year, the lowest reading since May 2021. Paradoxically, bad news was good news for stocks: a weaker labor market reduced the odds that the Federal Reserve will raise rates at its September meeting, with futures markets shifting toward a hold as the more likely outcome.
The rate debate had already been shaped earlier in the week by Thursday’s productivity data. Second-quarter productivity came in at 1.4% against a 0.6% estimate, while unit labor costs grew just 1.3% versus the 2.1% forecast, the first meaningful evidence that artificial intelligence capital investment is beginning to show up in measured output.
Earnings continued to generate volatility, though the pattern was consistent with what investors have seen all season: strong results were often met with selling in names where expectations had already been priced in. Several high- multiple semiconductor and software names fell despite beating estimates, underscoring that positioning matters as much as fundamentals at this stage of the cycle.
With the jobs data now in the books, attention turns to the July Consumer Price Index report due Wednesday. If inflation continues to moderate, the case for holding rates steady strengthens considerably. A hot print, however, could reignite the hiking debate and test the recent rally. After the best week in months, a quick gut-check: 10 cognitive biases that affect investment decisions.
THE WEEK AHEAD
Markets head into the week ending August 14 with the July Consumer Price Index as the pivotal print. Wednesday’s headline and core inflation data will shape rate expectations into September, with any upside surprise reigniting stagflation concerns given the soft GDP and personal consumption data from earlier in the summer. Thursday’s Producer Price Index and Friday’s retail sales and consumer sentiment readings round out a data-heavy back half of the week, alongside a steady rotation of Fed speakers offering rate-path color.
Earnings flow is squarely AI infrastructure this week. CoreWeave and Lumentum report Tuesday, a direct read on GPU cloud demand and optical networking capacity tied to hyperscaler buildout. Wednesday brings Nebius alongside Cisco, giving investors a second AI cloud data point plus an enterprise networking read on data center spending. Expect close scrutiny of CoreWeave’s contracted backlog and capital spending intensity, and Nebius commentary on GPU utilization and hyperscaler partnerships, both bearing directly on the broader debate around AI infrastructure monetization versus spending discipline. Cisco’s margin commentary will matter given tariff-related cost pressure across hardware.
Geopolitically, the Iran conflict remains the dominant overhang, with energy markets and the dollar sensitive to any escalation around the Strait of Hormuz. Global tariffs continue to weigh on multinational earnings guidance and capital spending plans, compounding uncertainty already present in Fed policy under Chair Warsh. Semiconductor and optical names with China exposure stay sensitive to export policy, while defense and cybersecurity continue benefiting from the security spending tailwind. Net, a choppy, data-and-AI-earnings-driven week with the inflation report and the CoreWeave and Nebius results doing the heavy lifting for direction.
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DISCLOSURES
The information presented is the opinion of Legacy Bridge, LLC., and does not reflect the view of any other person or entity. The information provided is believed to be from reliable sources, but no liability is accepted for any inaccuracies. This is for information purposes and should not be construed as an investment recommendation. The opinions expressed are subject to change without notice. Reliance upon information in this material is at the sole discretion of the reader. This information is not intended to be complete or exhaustive and no representations or warranties, either express or implied, are made regarding the accuracy or completeness of the information contained herein. This material may contain estimates and forward-looking statements, which may include forecasts and do not represent a guarantee of future performance. Past performance is no guarantee of future performance. Investing involves risks. Legacy Bridge LLC., is an investment adviser registered with the U.S. Securities and Exchange Commission.
The S&P 500 generally represents performance of 500 large companies listed on exchanges in the U. S. It is one of the most commonly followed equity indices. The Nasdaq Composite Index is a market-weighted index that measures the performance of more than 3,000 common equities listed on the Nasdaq Composite Market. The Russell 2,000 Index is a market-cap weighted index that measures the performance of approximately 2,000 of the smallest companies in the Russell 3,000 Index. The MSCI ACWI captures Large and Mid-Cap representation across 23 Developed Markets (DM) and 24 Emerging Markets (EM) countries. With 2,921 constituents, the index covers approximately 85% of the global investable equity opportunity set. FactSet Research System is a financial data and software company that provides research for Wall Street professionals and individual investors.
