Do you remember the old Roadrunner cartoon? The Roadrunner would lead the Coyote off a cliff – and Coyote’s legs would keep spinning – until he realized there was nothing under him. Then he’d stop, turn his head, give us a wide-eyed look, and fall into an abyss. .
Is this where our economy is?
Markets this year have appeared largely indifferent to layoffs, rising inflation, and ongoing policy uncertainties… they just kept going! As of 7/31/2025 the S&P returned 8%. (1 )
Until this week.
On Friday, alone, the S&P 500 fell by 1.6% and the Nasdaq fell 2.24% (2 )
Ouch!
What drove the decline?
- A disappointing July Jobs Report. A weaker than expected jobs report report sparked worries about an economic slowdown.
- Tariff Pains Are Back. Tariffs, between 10-41%, are set to hit on Aug 7th – shaking global markets and rising fears of inflation.
- Inflation Remains Stubborn. Higher prices keep pressure on families and businesses.
So are we having that “Roadrunner Moment” and are we falling off a cliff?
I’d be a fool to predict.
What I do know is:
- Slower hiring may ease pressure on wages and inflation.
- Markets may rebound as trade rules become clearer.
- There is renewed optimism for an interest rate decrease in the fall. (3 )
The shake-ups of the current administration are a grand experiment, and we don’t know the long-term effects yet.
Either way, markets go up and markets go down. We invest for the long term.
Stay the course,
Barbara
August 3, 2025.
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