Public Markets 3 Days

Last updated: August 7, 2026, 8:33 PM ET

Public Markets

Equities

U.S. stocks notched fresh records on Friday after a surprise contraction in July payrolls all but extinguished fears of a Federal Reserve rate hike next month. The S&P 500 rose 0.8% to close at a new all-time high, while the Nasdaq Composite gained 1.2%, capping their best week since May. The Dow Jones Industrial Average added 210 points, breaking a three-day losing streak after falling 460 points earlier in the week on geopolitical worries. Traders now price in only a 15% probability of a rate increase in September, down from 40% a week ago, according to CME data.

The rally was broad-based, with big technology stocks storming back as concerns about overspending on artificial intelligence faded. The NYSE FANG+ Index surged 3.5% for the week, led by Nvidia and Meta Platforms. BlackRock’s Rick Rieder argued that the weak payrolls report reflects a “productivity revolution” rather than economic weakness, and that the economy remains on track for 6% GDP growth thanks to AI adoption. The Bof A sentiment gauge hit its most extreme bullish level since 2021, prompting strategists to warn that it’s time to reduce exposure to risky assets.

European stocks rose for a fourth straight week, with the Stoxx 600 climbing 0.6% on Friday to a fresh record. Strong earnings lifted sentiment, with WPP soaring the most since its 1995 IPO after its turnaround efforts gained momentum. SoftBank Group reported a smaller-than-expected decline in quarterly net income, helped by a rally in its chip-stock holdings. Allianz posted record second-quarter operating profit of €4.2 billion, driven by strong inflows at Pimco and insurance gains.

Fixed Income

Treasury yields plunged after the July jobs report showed the economy lost 23,000 jobs, well below the consensus forecast for a gain of 180,000. The two-year yield fell 18 basis points to 4.12%, while the 10-year yield dropped 12bps to 3.89%. Short-term Treasuries capped their biggest weekly rally since May, as traders further dialed back rate-hike expectations. The curve steepened slightly, with the 2s10s spread widening to -23bps from -29bps a week ago.

The bond market’s rally came despite ongoing debate about Treasury auction cutbacks. The Treasury sparked controversy this week by signaling it might reduce the size of its note and bond auctions, a move some analysts argue could artificially depress yields. Separately, the Fed’s Fima repo facility went unused for an eighth straight week, suggesting Japan didn’t use the tool to support the yen. The dollar’s selloff weighed on Treasuries from a foreign-exchange perspective, as Washington policy decisions are prompting investors to reconsider the “Sell America” trade.

In credit markets, Gainwell Technologies launched a $5.8 billion debt overhaul, the largest software-sector refinancing of 2026. The deal comes as private-credit firms face increasing pushback from investors on valuations; Ares scaled back a €1 billion continuation fund after failing to get buy-in for pricing. Meanwhile, Puerto Rico’s capital San Juan saw blowout demand for its $121 million muni-bond sale, as investors seized a rare opportunity to gain exposure to the island.

Currencies

The dollar tumbled to a seven-week low against a basket of major currencies, ending the week at its weakest since May. The dollar fell 1.2% on Friday alone after the soft labor data reduced expectations of a Fed rate hike. The euro surged above $1.12 for the first time since April, while sterling climbed to $1.31. The yen jumped 1% against the dollar on the jobs report, amid speculation that Japanese authorities might have intervened again. Data confirmed that Japan intervened three times during the spring Golden Week holiday to prop up the currency, going beyond its usual two-day playbook.

Hedge funds sharply reduced bearish bets on the yen after coordinated US-Japan efforts helped stabilize the currency. However, the carry trade remains resilient, with investors sidestepping the yen’s gains by using other low-yielding currencies. The US decision to sell euros to support the yen without warning European policymakers is adding to geopolitical risks, according to BlackRock, further dimming the appeal of longer-maturity government bonds. China sold long-dated offshore yuan bonds in Hong Kong at record-low yields, underscoring strong demand from global investors for the offshore issuance.

Commodities

Oil futures settled higher on Friday, with WTI crude rising 1.2% to $78.18 a barrel, but still posted a 7.7% weekly loss. Brent crude gained 1.3% to $83.55, but fell 5% for the week. The decline was driven by Iran’s oil exports stalling under the US naval blockade; Kharg Island idled as tankers were halted from carrying Tehran’s crude. Analysts remain stumped by the case of the missing oil barrels, with global supply appearing tighter than official data suggest. US diesel exports surged to a record last week as the global scramble for distillate fuel drained domestic stockpiles.

Copper headed for a record close on Friday, with LME three-month futures rising 2.3% to $11,820 a ton, as signs of tighter short-term supply drove gains. 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 that could take global benchmark prices to all-time highs. Comex copper futures also hit a record high amid speculation about US tariffs and the push to reopen the Strait of Hormuz. Nickel declined to the lowest since mid-July on renewed speculation Indonesia will grant a higher ore-production quota to one of its largest mines.

Gold extended its rally, with spot prices rising 0.8% to $4,120 an ounce, supported by a weaker dollar and fading rate-hike expectations. China’s central bank ramped up additions to its gold reserves for a 21st consecutive month, pushing the buying streak towards two years. Natural gas futures posted their seventh consecutive weekly loss as strong production and soft LNG feedgas offset high seasonal power-sector demand. Global food prices rose to a three-year high in July as renewed concerns over grain export corridors compounded adverse weather across major growing regions.

IPOs & Dealmaking

Private-equity firms are aggressively taking companies public as sluggish M&A makes it hard to find buyers. More firms are pursuing IPOs in the hot market, with this year’s total issuance already exceeding last year’s full-year tally. Whatnot, a fast-growing live-shopping platform, nearly doubled its valuation to $20 billion in a new funding round. China’s Unitree Robotics aims to raise about $900 million in an IPO that tests market interest in humanoid robots. Chinese AI start-up Moonshot revamped its corporate structure to pursue a Hong Kong listing.

SpaceX shares jumped for a second straight day, bringing them close to breaking back above the company’s $135 IPO price for the first time since falling below that level last month. The company is nearing a $101 billion valuation unlock as it eyes $1 trillion in revenue from its Starlink and Starship programs. Bankers are betting on supersize bonuses this year as volatile markets and huge stock offerings fuel profits. Dream Finders Homes agreed a roughly $916 million deal to buy rival Beazer Homes in the latest consolidation in the homebuilding sector. Allianz agreed to buy the asset management unit of Singapore’s United Overseas Bank, marking the German insurer’s second major deal in recent days. Vusion is in the early stages of exploring strategic options, including a potential sale.

Economy & Policy

The July jobs report delivered a shock: the US economy shed 23,000 jobs, far below the consensus estimate for a gain of 180,000. The unemployment rate ticked up to 4.3% from 4.1%. The report, released Friday, prompted traders to dramatically scale back rate-hike expectations for September. However, Fed officials remain chiefly focused on inflation, and some argue the weak report does not eliminate the prospect of a rate rise given that inflation is still above the 2% target. The labor market appears to have shifted into reverse after a spring surge, as employers balk at hiring amid higher prices and uncertainty.

The Trump administration restarted its battle to fire Fed Governor Lisa Cook, sending her a letter saying it was “considering” removing her after the Supreme Court rebuffed the first attempt. Separately, Christopher Phelan was confirmed as chairman of the White House Council of Economic Advisers. The Senate passed a sanctions bill targeting Russia and Iran, championed by the late Senator Lindsey Graham. The bill’s passage was spurred by his sudden death last month. Trump officials deported a group of Mexicans despite torture risk concerns, using a rare authority.

Market Structure & Other

The SEC dropped an insider-trading lawsuit against a former healthcare executive who was pardoned by President Trump. The CFTC warned prediction markets to avoid using American-style gambling odds amid ongoing legal challenges. Draft Kings CEO Jason Robins blasted prediction bets on earnings call comments, saying he doesn’t think it’s good that bettors wager on what executives say.

Brazil’s B3 exchange suffered its worst trading outage ever, highlighting risks from its near-monopoly. A quant crash in China sent DeepSeek’s founder’s funds down 20% after a rout in AI-linked stocks. Global funds are piling back into India IT stocks after months of selling, as smaller IT firms fared better during the June quarter. The UK manages a record share of assets on behalf of overseas clients, helping dispel worries over London’s status as a financial centre.