Last updated: August 7, 2026, 11:37 PM ET
Equities
US stocks stormed to fresh records Friday after a surprise July payrolls contraction eased fears of near-term rate hikes. The S&P 500 and Nasdaq capped their best week since April, with the benchmark index rising to a new all-time high. The rally was broad-based as traders concluded the weak data gives the Federal Reserve reason to hold off on raising interest rates next month. The labor market shifted into reverse as a spring surge rapidly faded amid higher prices and uncertainty, even as employers avoided layoffs. BlackRock's Rick Rieder argued the surprise contraction reflects a "productivity revolution" rather than weakness, with the economy still on track for 6% GDP. BofA's sentiment gauge hit its most extreme bullish level since 2021, leading strategists to recommend reducing exposure to risky assets.
Big Tech stocks staged a powerful comeback as earlier AI spending fears faded and euphoria resumed, leading the market higher after months in the doghouse. European stocks gained for a fourth straight week, with a stronger-than-expected earnings season and growing M&A chatter lifting regional benchmarks to fresh records. UK equities are also heating up, with one FTSE 100 fund rising 4% recently. In Asia, the State Bank of India beat profit estimates and shares rose, benefiting from strong credit growth. Dream Finders Homes agreed a roughly $916 million deal to buy rival Beazer Homes USA.
Fixed Income
Treasuries rallied sharply after the weak July employment report, cementing the biggest weekly gain in shorter-dated maturities since May. Short-term Treasuries led the charge as traders further dialed back expectations for Federal Reserve interest-rate hikes. Treasury yields fell after the economy lost 23,000 jobs in July, according to the Bureau of Labor Statistics. The bond market is signaling rising risks that investors should heed, with higher hurdles for A.I. data centers and the stock market, though the move is also a boon for retirees. Bond traders had been bracing for the data that could tip the scale on a Fed hike.
The US Treasury sparked a debate over whether auction cutbacks are needed to temper yields, challenging an article of faith about the world's biggest bond market. Wellington Asset Management reduced its exposure to US Treasuries, shifting into German bonds after last week's Fed meeting fueled doubts about its inflation-fighting credentials. San Juan triggered a rush for its $121 million municipal-bond sale, offering a rare opportunity for exposure to the island. Bonds on a struggling Syracuse megamall face a $350 million loss as the developer buys back the mortgage for cents on the dollar. Japan's GPIF posted a record $152 billion gain, while the country's four largest life insurers reported combined unrealized losses of $96 billion on domestic bonds.
Commodities
Oil futures settled higher Friday but posted sharp weekly losses amid Middle East supply disruption concerns. WTI rose 1.2% to $78.18 a barrel but fell 7.7% for the week, while Brent climbed 1.3% to $83.55 for a 5% weekly loss. Analysts remain stumped by the case of missing barrels in the market. Iran's oil exports have stalled and Kharg Island is idling under a US naval blockade that appears to be halting tankers. A refining crunch keeps fuel prices high even as crude retreats, a boon to US refiners but a political problem for Donald Trump. US natural gas futures posted a seventh consecutive weekly loss as strong production offset high seasonal power demand.
The copper market is tightening fast, with a two-way pull depleting LME inventories and raising the risk of another spike. Copper heads for new highs as the US and China squeeze buffers, with a crunch brewing as both countries compete for metal. Global food prices rose in July to a three-year high as renewed concerns over grain export corridors compounded adverse weather. Ukraine's grain exports could fall by more than half this season after Russian strikes disrupted Black Sea ports. China's central bank extended its gold buying streak to 21 months, pushing bullion prices above $4,000 an ounce. The price of a key Chinese steel product dropped to a near-decade low as the property downturn sapped construction demand.
Currencies & Sovereign
The dollar fell to a seven-week low after the weak US jobs data reduced expectations that the Federal Reserve will raise interest rates. The dollar ended the week at its lowest since May as rate-hike bets faded. The yen surged 1% against the dollar after the data, with earlier speculation that authorities could intervene again on the currency. Hedge funds sharply reduced bearish bets on the yen after coordinated efforts by US and Japanese officials helped stabilize the currency. The US selling euros to support Japan's yen without warning European policymakers is adding to geopolitical risks, according to BlackRock.
Goldman Sachs is skeptical that the yen support will threaten the dollar's dominance as the world's most dominant reserve currency. South African authorities are focused on budget targets, and the bond market is already rewarding them with an effective investment-grade rating. India's foreign exchange reserves are expected to swell to a near-record high within weeks. Germany, France and Spain had exploratory discussions about China's dim sum bond market but none plan to pursue such sales.
Policy & Regulation
The US Senate confirmed Christopher Phelan as chairman of the White House Council of Economic Advisers. The Senate also passed a sanctions bill targeting Russia and Iran, championed by the late Senator Lindsey Graham. The Trump administration restarted its battle to fire Federal Reserve Governor Lisa Cook, sending a letter saying it is "considering" removing her. Kevin Warsh faces an inflation challenge at the Fed that may rest on an issue outside monetary policy: the nation's ongoing fiscal deficits. The Friday jobs report posed a new test for Warsh as investors increasingly expect the Fed to begin raising rates as soon as next month. A weak jobs report does not eliminate the prospects of an interest rate rise, as the Fed remains chiefly focused on inflation after five years of overshooting its 2% target.
Canada offered the US concessions in trade talks but is demanding a comprehensive deal as Prime Minister Mark Carney attempts to prevent 50% tariffs against many Canadian goods. Trump's tariffs on China created a "tortuous experience" disrupting soybean trade, a Chinese diplomat said. The SEC dropped an insider-trading lawsuit against a former healthcare executive who was pardoned by President Trump. The CFTC warned prediction markets against using American-style casino gambling odds as it fends off legal challenges. Don Lemon accused the Justice Department of vindictive prosecution, asking a judge to throw out charges. The FAA ordered inspections of 471 Boeing 737 MAX jets over possible cracks found in a structural reinforcement.
Corporate Finance & M&A
Canada's PSP is said to mull a $1.5 billion sale of its roads in India. The Chinese AI start-up Moonshot revamped its structure to target a Hong Kong listing. Unitree Robotics wants to raise $900 million in an IPO testing market interest in humanoid robots. Private-equity firms are pouncing on the hot IPO market as sluggish dealmaking has made it hard to find buyers. Atlassian CEO Mike Cannon-Brookes vowed to spend $250 million buying shares after strong quarterly sales. Whatnot, a live-shopping platform, nearly doubled its valuation to $20 billion in less than a year.
Situational Awareness bet $400 million on a stealth chip startup after its AI-battered hedge fund took a hit. SpaceX shares neared the $135 IPO price again after staging a $327 billion rally. Ford plans a four-door version of the Mustang, a first for its "pony car." Apollo's upmarket plans for easy Jet include premium seats and more charges as part of a £5.7 billion takeover. Mike Ashley said Harvey Nichols is in a "death spiral" even as he vies to acquire the department store. Gainwell Technologies kicked off a $5.8 billion debt overhaul, the year's biggest software refinancing. Wendy's withdrew its outlook and slashed its quarterly dividend as its turnaround struggles.
Sector & Industry
Corporate America's adoption of AI tools is paying off, with a garbage-truck margin boost showing the AI profit boom has begun. The free money AI bond buildout is gone as hyperscaler debt funding gets pricier. ByteDance is training a massive AI model three times larger than Moonshot’s Kimi K3. Trip.com was fined over market abuse after a probe concluded it abused its platform power handling more than half of China's hotel bookings. Take-Two Interactive logged higher sales but its loss widened due to discontinued development of a title. Under Armour lowered its revenue outlook on soft demand, with traffic trends weakening in North America and Asia-Pacific.
The UK housing market is in "suspended animation" as house prices were unchanged in July with higher mortgage rates stretching affordability. Allianz posted a record operating profit, rising 11% as it turns to dealmaking to reshape its portfolio. Volkswagen's majority owner urged faster cost cuts and capacity reduction to return to competitiveness. Porsche SE called for a faster overhaul at VW after a $3.5 billion impairment hit. Daimler Truck plans a September launch of a second $1.27 billion share buyback tranche. Munich Re cut its revenue outlook after a volume drop in July contract renewals, though it reiterated full-year profit guidance. Goodwin Plc started a strategic review that may lead to the sale of a large chunk of its business, as the defence supplier explores a sale to buyout firms. Britain curbed power exports to Europe to preserve supplies as the grid came under pressure during heatwaves.
Financials & Deals
The Wall Street risk complex surged anew amid a deluge of fresh cash, with markets increasingly indifferent to the growing catalog of complaints. DraftKings CEO Jason Robins blasted prediction bets on earnings calls, saying it is not good for bettors to wager on what executives say. Reservation apps have made getting into a restaurant a nightmare, with middlemen fighting over high-spending customers. Wonder is gambling on robots, drones and AI-generated menus to help its food halls lower prices enough to compete with restaurant takeout. JBS secured a $2.5 billion investment from Indonesia's sovereign wealth fund Danantara for a joint venture in the protein market. Adnoc spent $1.3 billion to expand its tanker fleet after the UAE left OPEC. Saudi Arabia, Turkey and Pakistan signed a defence pact in Mecca to deepen regional security cooperation.
A Singapore billionaire sued Brookfield for allegedly aborting a planned real-estate joint venture. The MFS collapse prompted the UK watchdog to crack down on financial crime, demanding more information around fraud risks from unregulated entities. The CMA is moving to stop Aldi and Lidl from using anti-competitive property covenants that block rival UK store openings. Hindalco Industries' first-quarter profit jumped 75%, beating estimates after supply disruptions drove metal prices higher. Bajaj Finance led declines in Indian shadow lender stocks as the central bank proposed to bar them from offering revolving credit facilities. The head of India's bullion exchange resigned, dealing a setback to the four-year-old platform. SK Hynix's flash crash spurred South Korea's Nextrade to tighten trading rules, temporarily prohibiting orders at the daily price limit.
Geopolitics & Energy Security
Houthis claimed an attack on a Yemeni military camp that killed, escalating tensions and threatening a truce in place since 2022. New intelligence warns Russia may provoke NATO amid dwindling US munitions. Hungary warned of a "dramatic" economic impact from drought combined with a lengthy nuclear production outage. The peak shipping season persists in Southern California, with the Port of L.A. leader seeing continued high volumes. China's export boom rolls on despite a trade backlash, with factories finding eager buyers abroad. Shanghai is tackling a chronic land lease issue by seeking to permit owners to extend leases for commercial property upon expiry. Zimbabwe's VFEX plans to increase its market value by 25% over the next year with a venture board for mining.
Climate, Agriculture & Water
England is turning brown in drought, with historically dry weather causing the nation to lose its signature hue. Parts of Eastern and Central Europe broke heat records this week, exacerbating dry conditions and creating wildfire risks. The Danube River is drying, exposing Nazi-era vessels and stranding boats as extreme heat afflicts Europe. Puerto Rico began 48-hour water rationing in parts of San Juan due to drought and aging pipes. A desert plant called Hesperaloe could make toilet paper softer and greener. The UK's "staycation" summer failed to lift hotel profits as costs climbed and disruption fears slowed overseas travel. El Niño threatens to disrupt the world's most-traded commodities, raising the risk of food shortages and inflation. Sodium-ion batteries made from salt could replace lithium-ion and make fossil-fuel dependence a thing of the past. The Army opened test ranges to private industry to help break a munitions bottleneck.