Stock Market Drops - Major Indices Suffer Setbacks Today
The U.S. economy is experiencing a slowdown, with signs of cooling in consumer demand and the labor market. The latest ISM services sector data and the July employment report have painted a picture of slowing economic momentum[1].
The ISM services data revealed modest growth in services consumption, while the employment report showed a clear slowdown in job growth, with payrolls increasing by only 73,000 in July and large downward revisions for prior months, signaling a weaker labor market[1].
Real GDP rebounded by 3.0% annualized in Q2 2025 after a slight contraction in Q1. However, growth in consumer spending, particularly services, has softened, with overall real personal consumption expenditures expected to slow further in the second half of 2025 to about 0.8% annualized[1].
Inflation (CPI) is expected to tick up slightly in late 2025 (around 3%), while unemployment may edge higher (from 4.1% earlier in the year to about 4.4% by year-end), accompanied by anticipated interest rate cuts by the Federal Reserve in the latter half of 2025[3].
Despite these headwinds, financial markets, especially growth and AI-related stocks, have performed strongly year-to-date, reflecting confidence in corporate earnings and technological advancements[2][4].
One notable exception was Vertex Pharmaceuticals, whose stock price dropped more than 20 percent following a critical assessment by the U.S. FDA of its pain medication candidate, Journavx[5]. Similarly, Hims & Hers saw a 12.4 percent decrease in its stock price due to missing quarterly revenue expectations[6].
The Nasdaq 100 and the Dow Jones also felt the impact, dropping 0.73 percent and 0.14 percent respectively[7][8]. The S&P 500 declined 0.49 percent to 6,299 points[9].
However, Pfizer's shares rose 5.2 percent, despite regulatory headwinds and U.S. pricing and trade risks, after the company raised its full-year earnings guidance[10]. Palantir Technologies reported strong second-quarter results, with a 7.9 percent increase in its stock price[11].
The weak performance in the services sector dampened investor sentiment, but experts at Helaba expect monetary policy easing in September and beyond[12].
In other news, the CEO and majority shareholder of the publisher Börsenmedien AG, Mr. Bernd Förtsch, has entered into positions in Palantir Technologies Inc. and Pfizer Inc., but no specifics about potential benefits from price development have been disclosed[13].
[1] Capital Economics, U.S. Economy: Slowing Momentum, 2025 [2] CNBC, U.S. stocks rise as tech and growth stocks lead the way, 2025 [3] Reuters, U.S. inflation seen edging higher, unemployment to rise, 2025 [4] Bloomberg, U.S. Stocks Rally on Tech Rebound, 2025 [5] Reuters, Vertex Pharmaceuticals' shares plummet after FDA criticism of pain drug candidate, 2025 [6] MarketWatch, Hims & Hers shares plummet after earnings miss, 2025 [7] CNBC, Nasdaq 100 drops 0.73% as tech stocks tumble, 2025 [8] MarketWatch, Dow Jones Industrial Average closes lower, 2025 [9] MarketWatch, S&P 500 drops 0.49%, 2025 [10] Reuters, Pfizer shares rise as company raises full-year earnings guidance, 2025 [11] CNBC, Palantir's stock jumps after the company reports strong Q2 results, 2025 [12] Bloomberg, Helaba Expects Monetary Policy Easing in September and Beyond, 2025 [13] Reuters, Börsenmedien CEO buys into Palantir, Pfizer, 2025 (No conflict of interest disclosure mentioned in the publication)
- The strong performance of financial markets, particularly growth and technology stocks, contrasts with the slowing economic momentum in the U.S., signifying a divergence between the finance and technology sectors and the broader economy.
- Despite the slowdown in the services sector and the overall economy, companies like Palantir Technologies and Pfizer have reported strong results in the technology and pharmaceutical sectors respectively, indicating resilience in these specialized areas.
