The Dow Jones Industrial Average gapped up to a new intraday high at the opening bell Friday and just missed a new all-time closing high on the strength of one beaten-down health care stock. Incoming economic data continue to color a murky macro picture with a critical sector set to report earnings next week.
The Census Bureau said retail sales were 0.5% higher in July compared to June and grew 3.9% year over year. June sales growth was revised from 0.6% to 0.9%.
“The economy may be slowing,” writes Morgan Stanley Wealth Management Chief Economic Strategist Ellen Zentner, “but consumers continued to do their part to keep it humming last month.”
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Meanwhile, preliminary University of Michigan Surveys of Consumers data tells us sentiment was 5% lower in August, the first decline for this “soft” set of numbers in four months.
At 58.6, the Index of Consumer Sentiment is at its lowest level since May. According to Surveys of Consumers Director Joanne Hsu, “This deterioration largely stems from rising worries about inflation.”
Amid a break between consumer behavior and consumer sentiment as well as still-emerging inflation signals, the Federal Reserve will focus on the “maximum employment” part of its dual mandate.
“The labor market will likely remain front and center between now and September 17,” Zentner notes. “While the idea of a 50-basis-point cut was overblown, the Fed is still on track to lower rates for the first time this year.”
The next Fed meeting is not until September 16-17. But Fed Chair Jerome Powell and his colleagues – including multiple candidates to be the next Fed chair – will gather next week for the Jackson Hole Economic Symposium.
CME FedWatch shows the probability of a 25-basis-point cut to federal funds range following the September meeting at 84.9% as of August 15, down from 92.1% on August 14.
By the closing bell, the blue-chip Dow Jones Industrial Average was holding onto a 0.1% gain at 44,946, setting its first new all-time record of 2025 and ending the week up 1.7%.
The Nasdaq Composite lost 0.4% for the day to 21,623, but the tech-heavy index closed the week with a gain of 0.8%. The broad-based S&P 500 was down 0.3% for the day at 6,449 while adding 0.9% over the five days through Friday.
Why Buffett and Tepper are buying UNH stock
UnitedHealth Group (UNH) is now officially a member of the Berkshire Hathaway equity portfolio, according to the most recent 13F filing from Warren Buffett’s holding company.
Buffett and Berkshire revealed the purchase of more than 5 million shares of the biggest health insurance company in the U.S. from April to June. The position was valued at approximately $1.6 billion as of the end of the quarter.
As Bloomberg reports, David Tepper’s Appaloosa Management also sees value in the blue chip stock. The billionaire and his hedge fund revealed a 2.3 million-share increase in their UNH stake at a total cost of $764 million.
As of June 30, UNH accounted for 11.9% of Appaloosa’s $6.45 billion stock portfolio and was its second-largest holding behind China-based Alibaba Group (BABA). (But the Tepper/Appaloosa filling shows a general pullback from the Middle Kingdom.)
UNH has dragged the world’s oldest stock market gauge into the red all by itself multiple times in 2025. But the beleaguered insurer was No. 1 among the 30 Dow Jones stocks Friday.
It was also the difference between a mixed day and across-the-board negative returns for the main equity benchmarks. Buffett and Berkshire (and Tepper and Appaloosa) bought it on the dip – should you buy UNH stock too?
Big box retailers prepare to report
Next week’s earnings calendar is dominated by big-box retailers Home Depot (HD), Lowe’s (LOW), Target (TGT) and Walmart (WMT). Walmart, in particular, will attract widespread attention from investors, traders and speculators.
“Given WMT’s outsized role in the U.S. retail landscape,” writes UBS analyst Michael Lasser in an August 6 research note, “the market will closely dissect its earnings print and commentary for any insights into pricing, behavior, and competitive dynamics.”
Lasser, who has a Buy rating and a $110 12-month target price for WMT stock, sees other macro implications in the report from the biggest retailer in the world. “The market also will pay attention to the health of the consumer in light of recent price hikes across retail,” Lasser observes.
“Specifically, we think WMT’s 2Q print will underscore that consumer demand has remained steady so far,” he concludes. “It also should signal that tariff-related pricing was not a meaningful driver in the quarter.”