MarketBeat Week in Review – 08/04

The market saw a positive week, fueled by expectations of Federal Reserve rate cuts in late 2025, though upcoming inflation and retail sales data pose a near-term catalyst risk. While some tech giants like Amazon and Qualcomm faced post-earnings pressure, opportunities emerged in chip stocks such as AMD and Onsemi after profit-taking. Key growth themes include the ongoing buildout of AI infrastructure and the burgeoning eVTOL sector, with companies like Joby Aviation seeing significant gains. Finance stocks also continued their outperformance, anticipating future rate cuts, underscoring a market characterized by selective opportunities amid evolving macro signals.

Analysis

The market's upward trend is currently supported by expectations of Federal Reserve rate cuts in late 2025, but this sentiment faces a near-term test from upcoming inflation data, including the July CPI and PPI releases. A recurring theme this earnings season is significant post-report profit-taking in high-performing technology stocks, which is being framed as a buying opportunity for long-term investors. For instance, Advanced Micro Devices (AMD), Onsemi (ON), and Super Micro Computer (SMCI) all experienced dips after solid reports, with SMCI falling 17% due to failing to meet exceptionally high expectations. While some mega-caps like Amazon (AMZN) and Qualcomm (QCOM) face bearish momentum, analyst upgrades are providing support for others like Meta Platforms (META) and Robinhood (HOOD). Key growth narratives extend beyond semiconductors to the broader AI infrastructure buildout, including data center components, and into emerging sectors like eVTOL, where Joby Aviation (JOBY) hit an all-time high on strategic deal announcements. Concurrently, the financial sector, exemplified by the Invesco KBW Bank ETF (KBWB), continues to outperform in anticipation of future rate cuts.

Key Decisions for Investors

• Consider entry points in technology stocks such as AMD, Onsemi, and SMCI, where recent sell-offs appear driven by profit-taking and elevated expectations rather than fundamental weakness.
• Investors should closely monitor upcoming CPI and PPI data, as hotter-than-expected inflation could challenge the consensus view on future Fed rate cuts and disrupt the market's current positive trend.
• Look beyond semiconductor manufacturers to ancillary AI plays in data center infrastructure and emerging growth sectors like eVTOL, where companies like Joby Aviation are demonstrating strong momentum through strategic agreements.
• Exercise caution on stocks in established downtrends, such as CrowdStrike (CRWD), and potentially await a clear positive catalyst from their upcoming earnings reports before committing capital.