U.S. stocks rebounded sharply on Monday (August 4), erasing steep losses from the prior session as investor sentiment improved despite ongoing concerns about the economy and a new round of tariffs from President Donald Trump’s administration.
At the close, the Dow Jones Industrial Average jumped 585.06 points (1.34%) to 44,173.64, fully recovering from Friday’s sharp drop. The S&P 500 surged 1.47% to 6,329.94, snapping a four-day losing streak and marking its best daily performance since May 2025. The Nasdaq Composite rose 1.95% to 21,053.58, showing broad-based strength across the market.
The rally followed a major sell-off on August 1, triggered by a weaker-than-expected U.S. jobs report and significant downward revisions to employment figures from May and June. In a swift response, President Donald Trump dismissed the head of the Bureau of Labor Statistics (BLS), a move that stirred both concern and speculation on Wall Street.
Trump later stated he would appoint a new commissioner in the coming days, signaling a shift in the administration’s approach to economic oversight and potentially more aggressive measures to stimulate the economy.
Further fueling market volatility last week was Trump’s signing of a sweeping executive order updating retaliatory tariffs on dozens of U.S. trade partners — from Syria to Taiwan — with revised rates ranging from 10% to 41%. While initially jarring, markets appeared to digest the impact over the weekend, with many investors focusing instead on upcoming catalysts.
With limited economic data on the calendar this week, all eyes are on potential trade developments between the U.S. and China. Senior officials from both countries held talks in Stockholm, Sweden, last week. Speaking with CNBC on July 31, U.S. Treasury Secretary Scott Bessent said, “We are preparing for a deal,” reviving hopes of a breakthrough that could ease trade tensions.
Meanwhile, investors are gearing up for a fresh batch of corporate earnings. Palantir is set to report after the bell on Monday, followed by AMD on Tuesday (August 5). These reports will provide crucial insight into the resilience of corporate America amid geopolitical and macroeconomic headwinds.
Despite Monday’s strong performance, investors remain cautious heading into August — historically one of the weakest months for equities. According to the Stock Trader’s Almanac, August has been the worst-performing month for the Dow since 1988 and the second-worst for both the S&P 500 and Nasdaq Composite.
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