Despite mounting evidence of economic stress from U.S. tariffs, equity markets continue to show surprising resilience.
What’s Going On:
- U.S. Services Slowdown: July data shows the U.S. service sector nearly stalled. Input costs surged and employment weakened — classic stagflation signals.
- Friday’s Jobs Data: A brutal jobs report further complicates the Federal Reserve’s path, reinforcing expectations of rate cuts.
- Tariffs Bite Earnings:
- Caterpillar warns tariffs may cost up to $1.5B in 2025.
- Yum Brands flags higher costs and soft demand.
- AMD missed on data center revenue, dragging shares down 6.6%.
- Caterpillar warns tariffs may cost up to $1.5B in 2025.
Yet… investors seem undeterred. After dipping on jobs data, markets bounced back — a “buy-the-dip” mindset continues to dominate.
Meanwhile in Tech:
- OpenAI, maker of ChatGPT, is reportedly eyeing a $500 billion valuation via a secondary share sale. Major signal of AI sector strength.
Global Market Pulse:
- Asia: Mixed. Japan & Australia up ~0.6%, rest mostly in red.
- Wall Street Futures: Slight recovery — Nasdaq +0.1%, S&P +0.2%.
- Europe: EUROSTOXX 50 futures up 0.3%, pointing to a positive open.
Currencies & Bonds:
- Dollar remains weak post-jobs slump.
- Bond markets eye a crucial $42B 10-year U.S. Treasury auction, following a rough 3-year auction yesterday.
What to Watch Today:
- Euro zone retail sales (June)
- Disney, McDonald’s, Uber earnings
- U.S. 10-year Treasury auction
Trump’s upcoming Fed pick (announcement due by week’s end)