Citadel's flagship fund gained nearly 6% in July after a fire-sale purchase of Situational Awareness's public stocks, potentially helping end the AI rout. The S&P 500 broke a three-month sideways trend, rising 5% in a week to an all-time high. Just 13 Big Tech stocks accounted for over 90% of gains, rebounding from May lows but still slightly down since then. Defensive stocks lagged; options markets suggest the rally is fundamentally driven by strong earnings and relief that a leveraged player exited.

Friday's US payrolls report (forecast 90,000 jobs) is unlikely to shift the Fed outlook. New chair Kevin Warsh downplays the Phillips curve; the FOMC remains focused on inflation. Don Rissmiller of Strategas notes even dissenters are satisfied with the labor market. Matthew Martin of Oxford Economics argues more weakness signs are needed before the Fed pivots. A hot report may not raise September hike odds much; downside risk appears larger.