Last updated: August 7, 2026, 5:32 PM ET
Stock Markets
All three major US stock indexes rose, with the S&P 500 and Nasdaq capping their best week since April after a surprisingly weak July jobs report effectively ended fears of an imminent rate hike. The S&P 500 surged to a record close as the data prompted traders to scale back expectations that the Federal Reserve would raise interest rates next month. US stocks closed higher Friday after the report showed the economy unexpectedly shed jobs, delivering the second-best week of the year for equities. The S&P 500 hit a fresh record after the jobs data missed forecasts, confirming the economy lost jobs in July. European stocks rose for a fourth week in a row, with a stronger-than-expected earnings season and growing M&A chatter lifting regional benchmarks to fresh records. European indexes largely edged higher in cautious trade as investors held ground ahead of the US jobs data and news on talks in the Middle East. European stock indexes rose at the open, extending a raft of record highs, with the Stoxx 600 index gaining. The world's biggest technology companies are suddenly leading the way again, storming back after spending much of the year in the stock market doghouse over fears about their profligate spending on artificial intelligence. Investor bullishness has become so extreme that it is time to start reducing exposure to risky assets, according to Bank of America strategists. Big Tech stocks stormed back as AI fears faded and euphoria resumed. Index funds that seem to invest the same way are performing very differently this year, as a few hot stocks cause "twin" funds to act like strangers. UK shares rose 4% in the FTSE 100 as the market rallied. Private-equity firms are pouncing on the hot IPO market, taking companies public as sluggish dealmaking has made it hard to find buyers. Whatnot, a fast-growing live-shopping platform, has nearly doubled its valuation to $20 billion in less than a year. SpaceX shares jumped for a second straight day, bringing them close to breaking back above the $135 IPO price. US stocks rose after the July jobs report came in much cooler than expected, prompting traders to scale back rate-hike expectations. Markets rallied on the surprise US job losses, with manufacturing jobs remaining a bright spot and Airbnb shares soaring.
Fixed Income & Currencies
Treasury yields fell after a weaker-than-expected jobs report showed the economy lost 23,000 jobs in July, fueling a rally in government bonds. US Treasuries rallied after the data cut odds of a Fed rate hike, with traders now pricing in a more dovish path. The US Treasury triggered debate this week about whether the government's auctions of notes and bonds will just have to keep growing, as the bond market is signaling rising risks that investors should heed. The dollar fell to its lowest level since May after the soft labor data reduced expectations that the Federal Reserve will raise interest rates in the near term. The dollar fell to a seven-week low against a basket of currencies after the data showed an unexpected decline in US nonfarm payrolls. The yen surged 1% against the dollar after the US jobs data, amid speculation that authorities could intervene again. Hedge funds sharply reduced bearish bets on the yen after coordinated efforts by US and Japanese officials helped stabilize the currency. Wellington Asset Management has reduced its exposure to US Treasuries, shifting into German bonds after the Fed's meeting fueled doubts about its inflation-fighting credentials. Japan's four largest life insurers reported a 7% increase in combined unrealized losses on domestic bonds, hitting $96 billion. Japan's Government Pension Investment Fund posted a record gain of $152 billion in the June quarter. Bond traders are bracing for labor market data that could tip the scale on a Fed hike. Alphabet's jumbo bond sale drew $115 billion of investor demand, signaling renewed appetite for debt tied to the AI boom. The US selling euros to support Japan's currency without warning European policymakers is adding to geopolitical risks, according to BlackRock. China's central bank ramped up additions to its gold reserves for the 21st consecutive month.
Commodities
Oil futures settled higher on Friday, but finished down on the week, with WTI settling up 1.2% at $78.18 a barrel but down 7.7% for the week. US natural gas futures posted their seventh consecutive weekly loss as strong production and soft LNG feedgas offset high seasonal power-sector demand. Copper prices rose to a new record for the third consecutive trading session. The copper market is tightening fast, with a surge in shipments to the US and rising orders in China setting the stage for a rally. Global food prices edged higher in July to the highest in more than three years. US imports of Saudi Arabian oil dropped to zero in July, the first time that has happened for an entire month since 1985. Iran's oil exports have stalled as a US blockade idles the Kharg Island terminal. Oil steadied as tensions in the Middle East flared while traders monitored progress toward a deal between Iran and Oman to restore shipping through the Strait of Hormuz. Crude retreats but fuel prices stay high as US refineries cash in while consumers face rising diesel and petrol costs. Steep duties on Canadian lumber, wildfires and sawmill closures have cut supply and pushed up prices, even as home-building sputters. Hindalco Industries' first-quarter profit jumped 75% after supply disruptions from the Middle East war drove metal prices higher. JBS secured a $2.5 billion investment from the Indonesia sovereign wealth fund Danantara to form a joint venture focused on the protein market in Asia.
Sector & Corporate Highlights
Under Armour lowered its revenue outlook on soft demand, saying traffic trends weakened as the latest quarter progressed. Wendy's withdrew its outlook and slashed its quarterly dividend as its turnaround struggles to pick up steam. DraftKings reported second-quarter sales and earnings that missed analysts' expectations as the sports-betting industry confronts a new challenge from prediction-market players. DraftKings CEO Jason Robins said he doesn't think it is good that bettors are placing prediction market wagers on what executives say on earnings calls. Peloton Interactive issued a muted revenue outlook for fiscal 2027 as subscriber losses continue to deepen. Keurig Dr Pepper logged higher sales in the second quarter and said it continues work to separate into two companies. Molson Coors Beverage said second-quarter sales fell as the company tries to balance sluggish customer demand with higher supply costs. Krispy Kreme once again narrowed its loss and expanded margins during its latest quarter. Shake Shack reported higher second-quarter sales, but profit slipped as operating expenses increased. Kraft Heinz had a narrower loss and lower sales in the second quarter, but raised its sales outlook as it aims to mitigate higher supply costs. Sweetgreen lowered its full-year outlook due to a cyclosporiasis outbreak, now expecting same-store sales to drop between 7% and 8%. Celsius Holdings shares tumbled after the energy drink maker's second-quarter revenue missed expectations. Heineken is upbeat for the full year after volumes picked up pace despite Americas weakness. Etsy will cut 12% of its workforce as the CEO focuses on the core marketplace. EBay lifted its outlook as the Depop acquisition closed and revenue rose to $3.13 billion. Motorola Solutions lifted its outlook as profit and revenue gained. Western Digital reported an elevenfold increase in profitability driven by strong memory demand. The New York Times' stock plunged 13% as subscriber growth slowed, even as total revenue climbed 11% to $762.5 million. Take-Two logged higher sales but losses widened due to discontinued development of a title. Datadog said lower usage from a major AI customer could dent growth, sharing a full-year sales outlook below Wall Street estimates. Volkswagen's major shareholder called for a faster overhaul after a $3.5 billion impairment hit. Allianz posted an 11% rise in group operating profit, reaching a new record as it turns to dealmaking to reshape its portfolio. Germany's Merck KGaA raised its full-year outlook on robust results and easing currency headwinds. Atlassian's CEO vowed to spend $250 million buying shares after strong quarterly sales. Airtel plans to list its $10 billion Africa finance business in London. Jim Ratcliffe's Ineos doubled down on European chemical sector shares, buying more than €400 million of equities in listed peers. Schaeffler plans to cut 1,300 jobs through an expanded phased-retirement program as weak automotive demand continues. The FAA ordered inspections of 471 Boeing 737 MAX jets after cracks were found in a structural reinforcement. Fox will keep its NFL rights deal through 2029 after the league had been trying to renegotiate. A judge ordered Meta to pay nearly $1 billion over social media harm to children. The Trump administration has agreed to roughly $4 billion in settlements to cancel planned offshore wind projects. Gainwell Technologies has kicked off a $5.8 billion debt overhaul that would be the US software sector's biggest of 2026. Dream Finders Homes agreed to a roughly $916 million deal to buy rival Beazer Homes USA. Adnoc spent $1.3 billion to expand its tanker fleet to benefit from surging crude exports. BC Partners' credit arm is leading a group of investors looking at lending money to LIV Golf. Expedia raised its revenue view on higher profit and revenue, now expecting $16.05 billion to $16.22 billion. CME Group and FanDuel are scaling back a joint effort to take on prediction market startups. The Commodity Futures Trading Commission warned prediction markets to avoid using American-style gambling odds. Corporate America's adoption of AI tools is paying off, with a major relief to investors who had questioned massive investments in the technology. Hyperscaler debt funding is getting pricier as the free money AI bond buildout era ends. Siemens Energy CEO confirmed strong gas turbine demand will remain strong into next year. Goodwin Plc started a strategic review that may lead to the sale of a large chunk of a key business.
Economy & Policy
The July jobs report showed the US economy lost 23,000 jobs, a surprise contraction that sent a powerful signal to the Federal Reserve. This weak jobs report does not eliminate the prospects of an interest rate rise, as officials are chiefly focused on the trajectory of inflation. BlackRock's Rick Rieder said the surprise contraction reflects a "productivity revolution" rather than economic weakness, with the US economy on track for 6% GDP growth. The labor market shifted into reverse as employers balked at hiring, with a spring surge rapidly fading. The Senate passed a sanctions bill targeting Russia and Iran, championed by the late Senator Lindsey Graham. The Senate confirmed Christopher Phelan as chairman of the White House Council of Economic Advisers. The Trump administration, rebuffed by the Supreme Court in its first attempt to fire Federal Reserve Governor Lisa Cook, sent her a letter saying it was "considering" removing her from the job. Friday's jobs report poses a new test for Fed Chair Warsh as investors increasingly expect the Fed to begin raising interest rates. The pushback against Fed Chair Warsh is unwarranted as he drives much-needed reform. San Juan triggered a rush for its $121 million muni-bond sale as investors seized a rare opportunity. Pyramid Management Group is buying back the mortgage on a struggling megamall in Syracuse, mostly wiping out bonds that were once AAA-rated. Fitch Ratings is skeptical about Chile's tax cuts boosting growth enough to offset the drop in revenue. The UK housing market is in "suspended animation" as Lloyds data shows house prices were unchanged in July. Britain curbed power exports to Europe to preserve supplies during heatwaves. The UK manages a record share of assets on behalf of overseas clients. The CMA is targeting Aldi and Lidl to stop them blocking rival UK store openings. The FCA is cracking down on financial crime after the MFS collapse. Hungary faces a "dramatic" economic impact from drought and a nuclear outage. The Philippine economy grew at its slowest pace since 2009 excluding the pandemic, as the Middle East conflict stokes inflation. Ukraine's agricultural shipments could fall by more than half after Russian attacks disrupted Black Sea ports. Traders in India dialed back October rate-hike bets after dovish RBI speak. India's foreign exchange reserves are expected to swell to a near-record high. State Bank of India reported better-than-expected profit in its first quarter. India's plan to sell more shares in LIC surprised the market by how much it raised and the pace of the deal. Bajaj Finance led declines in Indian shadow lender stocks as the central bank proposed tighter loan rules. Indian sugar producers are set to start crushing cane earlier as the government seeks to bolster supplies and rein in record prices.