First started with, US Job data–Jolts Job openings report, which came lower than projected reading, showing a slowdown in hiring activities, while the job openings are dropping. All are suggesting to weaken the labor market conditions, just like what the Federal Reserve Chair Jerome Powell has expected.
In fact, several Federal Reserve members from last night, such as Waller, Bostic, Musalem, and even Kashkari, who have always believed in a hawkish stance (FED’s Kashkari), are acknowledging the softening in the job market while inflation still weighs on their minds. However, if the labor continues to weaken, then there will be an expected market shift. Regardless, most are still priced in for the rate cut in September while citing that the economy is slowing but not recession yet.
For now, investors are betting on a September rate cut, with the odds at 97.6% while moving up their expectations for the next rate cut from December to October.
Tariff Development:
According to Trump, “The US could be rich or poor, depending on the Supreme Court case on tariffs,” reflecting that these tariffs imposed gave him the leverage to strike a deal with other major trading partners and generate more revenue for the US economy. So if the US court really rules these global tariffs as an illegal act, then this will only bring more distress to their economy and market.
Geopolitical Tension: War
Other than that, Trump continues to put pressure on Russia as President Putin remains inflexible on ending this war without military involvement. In fact, the US urged Europe to stop purchasing Russian oil and join the proposed sanctions. At the same time, Trump also affirmed the U.S. commitment, stating, “We’ll put more there if they want,” to help Poland “protect itself.”
In response, Putin welcomed the US President Donald Trump to further discussion on the current progress while leading the Ukrainian President Zelenskyy to meet in Moscow, Russia.
Other war tensions included Israel and Hamas, the US and Venezuela—which hinted at more strikes coming against drug smugglers.
