Will the significantly better-than-expected July non-farm payrolls and Berkshire's Q2 financial report be two major signals for the stabilization and rebound of the US stock market?

Last Friday, two noteworthy events occurred. These two events may just convey two major signals of stabilization and recovery for the somewhat weak U.S. stock market recently.

One comes from non-farm macro data, and the other from Buffett's Berkshire.

1. Signal One: Non-Farm Data Exceeds Expectations

First, let's look at the macro side. The U.S. non-farm employment population decreased by 23,000 in July—this is not only the first decline since February but, more importantly, it far exceeded expectations: the market originally anticipated an increase of 80,000.

From an expected "+80,000" to an actual "-23,000," this extreme reversal signal elicited a market reaction that was not panic, but excitement. The logic is straightforward: a clearly weakening job market means that the threshold for the Federal Reserve to cut interest rates has been significantly lowered, and the market's expectations for rate cuts have rapidly heated up, with liquidity easing trades returning instantly.

In the end, all three major U.S. stock indices closed higher.

2. Signal Two: Berkshire's Cash Pool Decreases by $31.5 Billion

The other signal comes from Berkshire's Q2 financial report.

The most critical number in this report is not profit, but the change in cash reserves. In the first quarter, Berkshire's cash reserves reached a record $397 billion—at that time, the market was worried: does Buffett holding so much cash mean he thinks the market is too expensive? Does it indicate that some black swan event might occur? After all, the Oracle of Omaha being on the sidelines has never been a good sign for starting a bull market. Buffett has long proven that no matter when, he may not win every time, but he will never lose; he can always survive in the market.

By the second quarter, cash reserves had decreased to $365.5 billion. In one quarter, $31.5 billion was spent.

The significance of this number is that Berkshire, this large ship, has finally begun to change course. When the most cautious funds in the entire market start to shift from "holding cash" to "taking action," this itself is one of the strongest endorsements of market valuation.

What’s even more intriguing is where the money went—of the $31.5 billion, nearly $20 billion was invested in increasing positions in Google stock.

3. From Storage Chips to Alphabet: Another Perspective on AI Trading

Buffett's choice aligns perfectly with the judgments we've discussed previously.

In the current context of AI narrative trading, we have analyzed the issues with storage stocks: expectations have peaked ahead of fundamentals, valuations are trading at peak levels, and rushing in now could likely mean buying at the top. So, are there more reliable AI beneficiaries?

Buffett provided his answer with $20 billion: Google.

The logic behind Google is completely different from that of storage stocks. Storage stocks earn from the cyclical money of "supply and demand imbalance," with gross margins already soaring to 80%, and the upward slope must inevitably slow down; whereas Google earns from the ecological money of "AI application landing," benefiting from cloud services, search, and large models, with valuations not having overdrawn so many expectations. Buffett's choice essentially states: in the second half of AI trading, certainty is more valuable than elasticity.

4. Final Thoughts

However, one point needs to be reminded: whether it’s the rate cut trade driven by non-farm data or the emotional repair brought by Buffett's endorsement, it is not a straight line.

Rate cut expectations will fluctuate with each economic data release—when data is weak, expectations heat up, and the stock market rises; when data is strong, expectations cool down, and the stock market falls. Every upcoming CPI and non-farm report could trigger significant market volatility. Similarly, "buying Google following Buffett" is not mindless copying; Berkshire's cost basis, holding period, and retail investors are not on the same scale.

This kind of "direction has clues, but the path is bumpy" market is precisely the scenario where tools can provide value.

The BIT brokerage's options buying feature is suitable for trading this data-driven high-volatility window: whether betting that the next data will continue to boost rate cut expectations or hedging against the risk of a pullback in holdings, one can participate with a small cost, with the maximum loss locked in at the time of order as the premium—turning the uncertainty of data shocks into a calculable cost. The margin trading feature is suitable for use after signal confirmation: when rate cuts are realized and trends become clear, one need not be limited by the size of the principal and can enlarge positions to seize the market.

Signals have appeared, but bumps will not be few. Using the right tools can increase the likelihood of truly turning signals into profits.

Disclaimer: This article is based solely on publicly available information and market data for analysis and discussion. The views expressed represent the author's personal judgment and do not constitute investment advice, securities recommendations, buy/sell invitations, or profit promises regarding any securities, financial products, or digital assets. The analysis of companies, industries, and market trends mentioned does not represent future performance, and past performance does not guarantee future results. Investors should fully understand the risks, costs, and trading mechanisms of related products and make independent judgments and cautious decisions based on their own risk tolerance. The market carries volatility risks, and using options, margin financing, and other leveraged tools may amplify both gains and losses, with investors potentially losing part or all of their invested capital.