Will inflationary pressures fall enough?

S&P 500 +1.79% to 7,736.52

US 10-year yield -5.72 basis points to 4.627%

Spot gold +0.54% to $4,077.06 an ounce

DXY -0.13% to 99.88

What to look out for today

Companies reporting on Wednesday, 5 August: Albemarle, CF Industries Holdings, Charles River Laboratories, CVS Health, Diversified Energy, Eli Lilly, Etsy, Expedia, Glencore, Jackson Financial, Kraft Heinz, Novo Nordisk, Occidental Petroleum, Phillips 66, SanDisk, Shopify, Uber Technologies, United Therapeutics, Walt Disney, Western Digital

Key data to move markets today

JAPAN: Labour Cash Earnings and BoJ Monetary Policy Meeting Minutes

CHINA: RatingDog Services PMI

EU: Spanish and Italian HCOB Services PMI, German, French and Eurozone HCOB Composite and Services PMIs and Eurozone PPI

UK: S&P Global Composite and Services PMIs

USA: ADP Employment Change, S&P Global Composite and Services PMI, ISM Services Employment Index, Services New Orders Index, Services PMI and Services Prices Paid and a speech by Fed Governor Lisa Cook

Global Macro Updates

US labour market remains relatively steady. Job openings, a measure of labour demand, decreased by 178,000 to 7.359 million in June, according to the Labor Department's Bureau of Labor Statistics in its Job Openings and Labor Turnover Survey, or JOLTS report. The drop was most significant in healthcare and social assistance job openings, which decreased by 147,000 in June, the largest decline since July 2025. Vacancies in transportation and warehousing rose, while federal government postings climbed to the highest since late 2024. There were 86,000 fewer open positions in the leisure and hospitality sector. There were more job openings at retailers as well as in the financial sector. The job openings rate fell to 4.4% in June from 4.5% in May. Layoffs and discharges were unchanged at 1.8 million, holding at a rate of 1.1%.

Hiring increased by 96,000 to 5.348 million, led by the healthcare and construction sectors. Total hires edged up to 5.35 million from 5.25 million in May. The hires rate rose to 3.4% from 3.3% in May. The quits rate, which measures the percentage of people voluntarily leaving their jobs each month, was unchanged at 2%. The report showed there was about one vacancy per unemployed worker, which is broadly consistent with a balanced labour market.

US trade deficit shrinks. The trade deficit narrowed in June as imports fell for the first time since the start of the year, according to the US Bureau of Economic Analysis and the US Census Bureau. It fell 5.6%, or $3.8 billion, from $77.6 billion in May to $73.3 billion in June, with imports declining 1.8% to $388.0 billion. The goods deficit decreased $3.9 billion in June to $102.1 billion. The services surplus increased $0.5 billion in June to $28.8 billion. Goods imports fell 2.5% to $309.0 billion, led by a $2.1 billion decline in capital goods, which reflected a $3.0 billion drop in computers. Telecommunications equipment imports increased $1.1 billion in June.

However, exports fell 0.9% to $314.7 billion. Goods exports declined 1.9% to $206.9 billion. This was attributed to a $3.3 billion decline in industrial supplies and materials, which include petroleum. Crude oil exports fell $5.7 billion as crude oil prices averaged $95.82 a barrel compared to $107.82 in May.

Exports of services increased $1.1 billion to $107.8 billion in June, lifted by financial and trade services. Imports of services increased $0.6 billion to $79.0 billion. According to the government estimates, trade subtracted a full percentage point from GDP growth in Q2. 

The news on the trade balance came as the Trump administration revealed it had paid out about $100 bn in tariff refunds since the US Supreme Court struck down its use of emergency powers to levy duties on its trading partners in February. 

According to the Financial Times, this refund payout is 60% of the $165 bn collected from the president’s “liberation day” tariffs, and was reported by US customs officials to judges at the US Court of International Trade on Tuesday.

US Stock Indices

Dow Jones Industrial Average +1.71%
Nasdaq 100 +3.32%
S&P 500 +1.79%, with 6 of the 11 sectors of the S&P 500 up

Equity markets soared on Tuesday as traders reacted to the possible reopening of the Strait of Hormuz, which could help normalise global oil supplies, reduce energy price pressures and decrease the likelihood of further rate rises. Qatar said mediators were making progress in efforts to end the Iran war, although Tehran has denied President Trump's assertion that talks are already under way.

The Dow Industrials rose to another record. The Dow Jones Industrial Average rose 907.47 points, or +1.71%, to 54,085.88, the S&P 500 gained 136.02 points, or +1.79%, to 7,736.52 and the Nasdaq Composite climbed 671.10 points, or +2.59%, to 26,584.99.

Chip stocks also surged on Tuesday, with the Philadelphia Semiconductor index climbing +6.6% and rising for a fourth straight session after tumbling 20.6% in July.

In corporate news, Palantir Technologies surged almost 30% on Tuesday after raising its annual revenue forecast. This was its biggest daily percentage gain since February 2024.

SpaceX posted $7.8 bn in second-quarter revenues, well above estimates of $6.82 bn and up 92% y/o/y. It posted a net loss of about $541 mn, lower than estimates of $2.12 bn. As noted by the Financial Times, the company’s AI revenue more than trebled to $2.56 bn, boosted by a series of deals to lease data centre capacity and computing power to other AI groups including Anthropic and Google. Those deals added $1.6 bn in revenue, but limited SpaceX’s capacity to train and run its own competitive AI model.

Corporate Earnings Reports

Posted on Tuesday, 4 August from The Pulse, our real-time AI-driven news tool. Available exclusively on the EXANTE Web Platform

SpaceX reported Q2 revenue of $7.8bn (up +92% y/y vs $6.82bn consensus), GAAP EPS of -$0.09 (vs -$0.29 expected), and adjusted EBITDA of $3.5bn (vs $2.0bn expected). Segment revenue was Connectivity $4.29bn, AI $2.56bn, and Space $962mn. CapEx totalled $18.4bn, of which $15.8bn supported AI compute infrastructure. The company ended the quarter with $100bn in cash and a $47.5bn backlog. It announced a partnership with Nvidia to design the Starmind AI1 satellite payload using Rubin GPUs. CEO Elon Musk stated SPCX would build its AI infrastructure exclusively on Nvidia’s Vera Rubin architecture. Musk also said ARR is expected to exceed $100bn by December, and the $1trn annual revenue target has moved forward to 2030. Starlink Mobile is scheduled to launch in late 2027.

AMD reported Q2 FY26 revenue of $11.5bn (+50% y/y), beating the $11.28bn consensus, and adjusted EPS of $1.66, above the $1.62 estimate. Data Center revenue reached $6.7bn, up +107% y/y, now representing 58% of total revenue. CapEx surged to $808m, well above the $298m estimate, to support AI infrastructure. The company guided Q3 revenue to approximately $13bn, above the $12.5bn estimate. CEO Lisa Su said the company delivered an excellent quarter with record revenue and profitability. Additionally, AMD announced a strategic partnership with Anthropic for up to 2GW of MI450 GPUs, a $14bn deal with Core Scientific for 530MW of data center capacity, and acquired MEXT to strengthen AI memory technology.

Caterpillar reported Q2 adjusted EPS of $8.17 vs $6.17 expected, and revenue was $20.54bn vs $19.34bn expected, up +24% y/y. It was the first quarter in company history to surpass $20bn in sales and revenue. The company raised its full-year outlook, guiding for mid-to-high teens sales growth for 2026. Adjusted operating margin is expected near the bottom of the target range. CEO stated that strong order rates and a growing backlog reflect broadening momentum across all three primary segments.

McDonald’s reported adjusted EPS of $3.38 vs $3.32 expected, while revenue came in slightly light at $7.10bn vs $7.13bn. Global comparable sales rose +1.3% y/y, just below the +1.39% consensus, with US comp sales up +0.8%. The company appointed Skye Anderson as president of McDonald’s USA, succeeding Joe Erlinger. CEO Chris Kempczinski said the quarter delivered positive comparable sales growth across every segment. He attributed a drop in US traffic, following price increases, to franchisees not adhering to company pricing recommendations.

Merck reported Q2 adjusted loss of -$0.13 per share vs an expected loss of -$0.23, on sales of $16.61bn vs $16.35bn, up +5% y/y. Keytruda sales were $8.37bn and Gardasil revenue was $1.17bn. Merck raised its FY2026 sales guidance to $66.3-$67.3bn from $65.8-$67.0bn but cut its FY adjusted EPS forecast to $2.66-$2.76 from $5.04-$5.16, citing deal charges. The company also announced the FDA approval of LIPFENDRA. CEO Rob Davis expressed confidence in the execution of Merck's strategy to enhance its long-term growth trajectory.

Pfizer reported Q2 2026 revenue of $15.03bn (vs $14.41bn est) and adjusted EPS of $0.77 (vs $0.68 est). Revenue rose +3% y/y. The company raised the low end of its full-year revenue guidance to $60.5bn-$62.5bn (from $59.5bn-$62.5bn) while maintaining adjusted EPS guidance of $2.80-$3.00. The Prevnar franchise revenue was $1.34bn (vs $1.38bn est). The CEO commented that the obesity programme is advancing with meaningful momentum and the oncology portfolio remains a source of strength.

Spotify reported Q2 revenue of €4.78bn (vs €4.79bn consensus, up +14% y/y) and diluted EPS of €2.61. Premium subscribers hit 300mn (vs 299mn expected, up +9% y/y), while monthly active users (MAUs) were 777mn (vs 778.2mn expected, up +12% y/y). Gross margin was 33.4% (up +193 bps y/y), operating income rose +61% y/y to €655mn, and net income was €545mn versus a -€86mn loss a year ago. For Q3, Spotify guided for revenue of €5.0bn (vs €4.93bn consensus), operating income of €670mn (vs €677.8mn), MAUs of 788mn (vs 793.5mn), and premium subscribers of 305mn (vs 305.3mn). The CEO mentioned the business performed well in Q2, led by strength in subscribers and profitability, though Q3 MAU outlook missed estimates.

European Stock Indices

CAC 40 +0.61%
DAX +0.77%
FTSE 100 +0.20%

Commodities

Gold spot +0.54% to $4,077.06 an ounce
Silver spot +2.29% to $59.52 an ounce
West Texas Intermediate -5.7% to $75.77 a barrel
Brent crude -5.3% to $79.36 a barrel

Gold prices rose on Tuesday as oil prices fell and concerns around a Fed rate rise diminished. Spot gold rose +0.54% to $4,077.06 an ounce. 

Spot silver prices settled up +2.29% to $59.52 per ounce.

WTI and Brent futures fell on Tuesday after US Treasury Secretary Scott Bessent said that a deal with Iran to reopen the strait could come as soon as Tuesday or Wednesday.

Brent crude futures fell $4.41, or -5.3%, to settle at $79.36 a barrel, the lowest since 13 July. WTI futures settled down $4.57, or -5.7%, at $75.77 a barrel, also a three-week low.

Qatar's Foreign Ministry spokesperson Majed al-Ansari said efforts to secure a diplomatic resolution to the war were continuing with President Trump discussing efforts to reduce escalation with Iran with Qatar’s Emir Sheikh Tamim Bin Hamad Al-Thani. US Secretary of State Marco Rubio said on Tuesday there was progress in talks with Iran and Oman about moving more ships through the strait. As reported by Bloomberg news, Tehran is considering allowing European nations to remove mines from Hormuz, said diplomats familiar with the matter. Shipping traffic through Bab el-Mandeb and the Strait of Hormuz remain unchanged.

According to Reuters, Goldman Sachs expects Brent crude to trade in a range of $80 to $90 per barrel until there is either confirmation of a new US - Iran agreement or a significant escalation in attacks and targets.

Meanwhile, the latest round of US-facilitated talks between Israel and Lebanon began on Tuesday and will continue through Thursday, a US State Department spokesperson said. 

Note: As of 4 pm EDT 4 August 2026

Currencies

EUR +0.20% to $1.1531
GBP +0.13% to $1.3451
Bitcoin +0.6% to $64,134.87
Ethereum +0.3% to $1,872.62

The dollar edged lower on Tuesday against major currencies following the losses from intervention to support the yen as well as from oil prices declining and yields falling on reduced rate rise expectations. The dollar index slid -0.13% to 99.88.

The euro was up +0.20% against the dollar to $1.1531. Sterling strengthened +0.13% to $1.3451.

The yen fell against the dollar on Tuesday, but managed to hold onto most of the gains from last week’s coordinated intervention between the US and Japan. The yen was down -0.38% at ¥157.79 per dollar, paring some of its gains after hitting a three-month high of ¥155.20 the previous session.

Fixed Income

US 10-year Treasury -5.72 basis points to 4.627%
German 10-year Bund -3.5 bps to 3.12%
UK 10-year Gilt -6 basis points to 4.90%

US Treasuries yields fell again on Tuesday as oil prices declined more than 5%, reducing Fed rate hike expectations, after a Qatari official said efforts to secure a diplomatic resolution to the conflict were continuing, while US Treasury Secretary Scott Bessent said a deal with Iran to reopen the Strait of Hormuz could come by Wednesday.

The 2-year yield, which typically moves in step with Fed interest rate expectations, fell to a two-week low, dropping -6.22 basis points to 4.194% and reached 4.1897%, the lowest level since 20 July.

The yield on benchmark U.S. 10-year notes fell -5.72 basis points to 4.627%.

The yield curve between 2- and 10-year Treasury yields flattened to 43 basis points.

According to the CME Fedwatch tool, there is a 56.9% probability of rate increase in September, up from 55.8% a week ago, but down from yesterday’s 67.2%.

The Treasury Department is set to unveil details of its funding plans for the coming two quarters on Wednesday, with investors watching closely for any signals of increased issuance of longer-dated debt.

Eurozone bond yields also fell on Tuesday. Germany’s 10-year bond yield fell -3.5 bps to 3.12%. Germany's 2-year Schatz yield, highly responsive to changes in ECB rate expectations, was -4.7 bps to 2.72%

The French 10-year OAT yield was -4.1 bps at 3.89% and the Italian 10-year yield fell -5.6 bps to 3.89%.

The10-year UK yield was -6 bps to 4.90%. 

Note: As of 4 pm EDT 4 August 2026

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