Stocks started the week strong on the back of a U.S.–EU tariff deal clearing a major overhang, while strong earnings and cooling rate expectations pushed the S&P 500 and Nasdaq to fresh record closes into midweek. Investors braced for Wednesday’s Fed decision, a wave of Big Tech reports (Apple, Amazon, Meta, Microsoft) and key jobs and growth data.
The Fed held rates as widely expected, while trade continues to dominate headlines as tariff diplomacy extended to South Korea, India and Mexico. The rally then stalled on Friday when the Labor Department reported just 73,000 jobs added in July, downward revisions of 258,000 to May and June, and a rise in the unemployment rate to 4.2%. That softer-than-expected data knocked major indexes lower and drove Treasury yields down as traders ramped up bets on a September Fed rate cut.
Next week focus will turn to earnings from Disney, McDonald’s and Caterpillar with Palantir reporting on Monday and BioNTech, Pfizer and AMD following later in the week. Economic data will center on July PCE inflation on Thursday and ISM services and manufacturing PMI readings early in the week which will shape Fed rate-cut odds. Oil output decisions by OPEC+ and fresh U.S. tariff negotiations could add further volatility to commodities and equities.
Stay tuned for more in tomorrow’s morning briefing!