US equity futures rise at the end of a week in which markets were buffeted by tariffs, geopolitical developments and corporate earnings. As of 8:00am ET, S&P 500 futures were up 0.3%, with the underlying index on track for its biggest weekly gain in five. Nasdaq 100 futures gained 0.4% as the AI narrative gets more fuel from TSMC and Softbank. In premarket trading, MegaCap Tech sees NVDA leading gains (+0.7%); sectors like Utilities and Consumer Staples are outperforming. Intel rises after CEO Lip-Bu Tan said he’s got the backing of the company’s board, following Trump’s call for his resignation; Tesla slipped after disbanding its Dojo team, upending its effort to build a supercomputer for driverless-vehicle technology. Headlines were quiet since yesterday’s close with no major macro data reporting today. The next key catalyst will be August 12 CPI release. Trump nominated CEA Chair Stephen Miran to fill Kugler’s expiring term which prompted JPM to now see a 25bp cut in September (vs. his previous December call), following by three 25bps cut in the next three meetings. Yields are flat and USD is lower. Commodities are mixed with oil and precious metals higher, while base metals are flat. Gold is in focus after US Customs and Border Protection clarified that Swiss 1kg and 100oz gold bars are subject to reciprocal tariffs. Otherwise its pretty quiet to close out the week with no major data and Fed’s Musalem speaking at 10:20am.
In premarket trading, Mag 7 names are mostly higher with the exception of TSL, whose shares dropped 0.2% on news it is disbanding its Dojo team and its leader will leave the company, according to people familiar with the matter, upending the automaker’s effort to build an in-house supercomputer for developing driverless-vehicle technology. Shares are down 0.2%. Here are the others (Nvidia +0.7%, Apple +0.6%, Amazon +0.3%, Alphabet +0.2%, Microsoft +0.3%, Meta Platforms +0.2%).
The S&P 500 is once again back to record highs following a 30% surge from its April lows, supported by robust corporate earnings and hopes the Federal Reserve will cut interest rates to support the economy as the labor market shows signs of weakening. Still, some firms have warned clients to prepare for a near-term pullback amid sky-high valuations and continued tariff uncertainty.
“Second-quarter earnings confirm corporate resilience continues. Overall, margins have been steady while firms’ commentary indicates that corporates have been largely adept at managing the impact from tariffs so far,” said Barclays Plc strategists led by Emmanuel Cau. “That doesn’t mean tariff uncertainty has gone away completely given Trump policy making remains erratic.”
In his latest trade moves, Trump escalated tensions by targeting India and imposing a 39% levy on Swiss exports to the US, while saying he’s “getting very close to a deal” with China. The US also confirmed it would end stacking of universal tariffs on Japan and cut car levies as promised. The about-turn on Japan has raised questions about the US trade deal with the European Union, said Jochen Stanzl, chief market analyst at CMC Markets.
“Since the tariff agreement between the U.S. and the European Union, some clarity has emerged, but confusion around its implementation is just beginning to surface,” Stanzl said. “In Japan, there is relief today upon hearing that the various tariffs will not be cumulative. However, it remains unclear whether the same rules apply for Japan and the EU. The complexities surrounding tariffs highlight the unpredictability in implementation, as evidenced by the recent surge in gold prices.”
Gold futures in New York soared after the US put tariffs on bullion bars, threatening to upend trade flows from Switzerland and other key refining hubs. The most-active contract climbed to an all-time intraday high above $3,534 an ounce, widening its premium over the spot price in London.
In geopolitical news, Israeli Prime Minister Benjamin Netanyahu secured cabinet approval on Friday for a military takeover of Gaza City, which he described as part of a final push to topple Hamas after 22 months of fighting and recover its last 50 hostages, dead or alive. Hopes of a truce in the Russia-Ukraine war rose after Trump said he’d be willing to meet with Vladimir Putin, even if the Russian leader hadn’t yet agreed to also sit down with Ukrainian President Volodymyr Zelenskiy.
Meanwhile, Fed Governor Christopher Waller is emerging as a top candidate to serve as the central bank’s chair among President Trump’s advisers as they look for a replacement for Jerome Powell, according to people familiar with the matter. The big news yesterday was that Trump chose Council of Economic Advisers Chairman Stephen Miran to serve as a Fed governor. The US president said that Miran, who will need to be confirmed by the Senate, would only serve the expiring term of Adriana Kugler, which expires in January.
“Having a more dovish Federal Reserve governor on the table is definitely better,” Ivy Ng, a CIO at DWS, said in a Bloomberg TV interview. “But in the end, the Federal Reserve is still more data driven, so we focus a lot on the economic data.”
Europe's Stoxx 600 is up 0.2% and is on course for its best week since May. Mining, bank and auto shares are leading gains while insurance and technology stocks are the biggest drags. Here are the biggest movers Friday:
The Mag 7 plus Broadcom, Oracle and Palantir accounted for 80% of the S&P 500’s return since Trump’s ‘Liberation Day’ in April, according to BofA strategist Michael Hartnett. BofA’s flows note also showed that investors poured nearly $107 billion into cash funds in the week through Aug. 6, the biggest inflows since January.
In FX, the Bloomberg Dollar Spot Index rises 0.1%. The Japanese yen and Norwegian krone are the weakest of the G-10 currencies, falling 0.4% each.
In rates, gilts extend their post-BOE fall, pushing UK 10-year yields up another 3 bps to 4.58%. Bunds also drop while Treasuries are little changed after Thursday’s a weak sale of 30-year debt signaled waning appetite for US debt.
In commodities, Gold futures in New York are up 1% having rallied after the Financial Times reported that US imports of one-kilogram bullion bars are now subject to tariffs. The spot price stalls near $3,400/oz. Oil prices rise for the first time in seven sessions, with WTI crude futures climbing 0.3% to near $64 a barrel as traders await US President Donald Trump’s next moves to halt the war in Ukraine after he announced tariffs on India this week for taking Russian oil.
No US economic data is scheduled, and Fed speakers slate includes Musalem on banking and credit (10:20am)
Market Snapshot
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Trade/Tariffs
A more detailed look at global markets courtesy of Newsquawk
APAC stocks traded mixed following the mostly lacklustre handover from Wall St and amid a deluge of earnings releases. ASX 200 was rangebound with the index contained as gains in the mining, resources and materials sectors were offset by losses in tech, healthcare, telecoms and financials. Nikkei 225 outperformed and briefly reclaimed the 42,000 status, while the TOPIX hit a fresh record high with sentiment underpinned after Japan was able to confirm a non-stacking stance regarding tariffs from the US and with momentum also helped by earnings releases including from SoftBank, whose shares surged by a double-digit percentage after its profit beat. Hang Seng and Shanghai Comp were mixed amid ongoing uncertainty heading into next week's tariff truce deadline.
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European bourses (STOXX 600 +0.2%) opened mostly modestly firmer and have traded sideways throughout the session, in very quiet newsflow. European sectors hold a very slight positive bias. Basic Resources top the pile – nothing specific driving the upside, simply just a case of upside across the underlying metals complex. The clear underperformer today is Insurance, which has been hit by post-earning losses in Munich Re (-8%), where the Co. slashed its Insurance rev. forecast. US equity futures (ES & NQ +0.3%, RTY +0.4%) are very modestly firmer across the board, as price action stabilises a touch from the mixed performance on Thursday, with modest outperformance in the RTY.
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FX
Fixed Income
Commodities
Geopolitics: Israel
Geopolitics: Ukraine
Geopolitics: Other
US Event Calendar
DB's Jim Reid concludes the overnight wrap
Markets have been mixed over the past 24 hours, with the S&P 500 edging -0.08% lower, partly weighed down by disappointing earnings from Eli Lilly (-14.14%), even as the NASDAQ (+0.35%) and the Mag-7 (+0.40%) reached new all-time highs. European equities rallied, with the Stoxx 50 gaining +1.31% as investors responded positively to renewed momentum around potential peace talks between Russia and Ukraine. Elsewhere, US Treasuries and the dollar lost ground after a soft 30yr auction and as Stephen Miran was nominated to temporarily take over the vacant seat on the Federal Reserve Board.
Trump nominated Miran, the Chairman of the Council of Economic Advisers, to serve until January in the seat vacated by Governor Kugler. The President added that “we will continue to search for a permanent replacement", which could then be used to place a Fed Chair candidate on the Board come January. Last year, Miran had co-authored a plan for reforming the Fed and also popularised the ‘Mar-a-Lago accord’ idea. The dollar index fell by about -0.3% immediately after the news of Miran’s nomination, erasing its daily gain. Earlier, Bloomberg reported that Trump advisers are favouring Fed Governor Christopher Waller as a potential replacement for Chair Powell. Waller was one of two dissenters who favoured a rate cut last week, citing signs that the labour market is “on the edge” ahead of the poor jobs report. As an existing Board member, he might find it easier to build consensus on policy across the FOMC than an external candidate, but he would still require the data to go his way
As an example, Fed pricing was little changed yesterday as Fed Governor Bostic said he still viewed only one rate cut as likely this year given the risks of persistent tariff effects on inflation. However, he did add that the jobs data did make him “think differently about the Fed’s mandate.” So a slight dovish tilt. Meanwhile, 10yr Treasury yields ended the day +2.2bps higher at 4.25%, with most of the increase coming after a weak 30yr auction that saw $25bn of bonds issued +2.1bps above the pre-sale yield. That follows soft 3yr and 10yr auctions earlier this week, with demand for Treasuries waning amid the lower level of yields we’ve seen since the weak payrolls report last Friday.
Back to central banks, the Bank of England added a layer of complexity to the macro backdrop with a rate cut that surprised in tone if not in magnitude. The MPC reduced the Bank Rate by 25 basis points to 4%, in line with expectations, but the messaging was notably hawkish. The initial vote split was an unprecedented 4-4-1, with four members favouring a hold. A second vote was required to reach a 5-4 majority—something never seen before. The Bank also shifted its emphasis from labour market conditions to inflation dynamics, raising its near-term CPI forecast to 4% yoy for September. Governor Andrew Bailey stated that the yield curve would be considered in future decisions regarding quantitative tightening, while reaffirming the Bank’s commitment to the programme.
This more cautious stance has prompted our UK economist Sanjay Raja to revise his forecast. He now expects only one more rate cut this year, keeping a projected terminal rate of 3.25% but for this to be reached in Q2 2026. A full recap of the BoE’s decision is available here.
Following the hawkish meeting, investors dialed back expectations of further BoE cuts. Overnight index swaps are pricing another 19bps of easing by December, with the year-end pricing moving +6.5bps higher on the day. Gilt yields rose, with 2-year yields up +5.8bps and 10-year yields up +2.1bps. With rates moving higher, the FTSE 100 fell -0.69%, underperforming European peers, while sterling strengthened by +0.67% against the dollar. You can see our FX strategists’ post-BoE take on sterling here.
Elsewhere in Europe, sentiment was buoyant. Investors welcomed news that the Kremlin signaled a likely meeting between Trump and Russia’s President Putin as early as next week. The White House has not yet committed to any timing for the meeting, which would be the first between US and Russian Presidents since Russia’s 2022 invasion. While there’s still plenty of uncertainty, the news led to a decline in risk premia for assets impacted by Russia’s war in Ukraine. Oil prices fell for a sixth day running, with Brent crude down -0.69% to its lowest since early June at $66.43/bbl, while the Polish Zloty (+0.39%) had its best day against the euro in over a month.
Improved hopes for a ceasefire also lifted equities across the continent. The DAX rose +1.12%, the CAC 40 gained +0.97%, and the IBEX 35 advanced +1.06%. European sovereign bonds rallied, with yields on 10-year bunds down by -2.0bps, OATs by -1.6bps, and BTPs by -2.4bps. Headlines also noted that Zelensky and European Commission President Ursula von der Leyen were discussing diplomatic options, with Zelensky stating that Europe “must be a participant in the peace talks.”
In details of the US equity moves, the Philadelphia Semiconductor index outperformed (+1.50% ) following the carveouts signaled by Trump for tariffs on chips the previous evening. Nvidia (+0.75%) reached a new all-time high, though Intel fell -3.14% after Trump called on its CEO to resign. Also on the downside, healthcare (-1.16%) was weighed down within the S&P 500 by Eli Lilly, while financials (-1.13%) also struggled.
On the trade front, Trump’s tariffs officially came into effect yesterday, though markets showed little reaction. The EU confirmed that its chip exports to the US will be subject to 15% tariffs rate, despite Trump’s announcement that imported chips could face tariffs of up to 100%. This development also supported European equities. Meanwhile, Commerce Secretary Howard Lutnick indicated that the US may extend its trade truce with China by another 90 days. Switzerland, facing a 39% tariff rate, remains in negotiations with the White House. A government spokesperson said they are committed to reducing tariffs “as swiftly as possible” and are not considering countermeasures. Despite the uncertainty, the Swiss Market Index recovered, rising +0.80%.
In the US, the latest jobless claims data offered some relief after last week’s weak payrolls report. Initial claims for the week beginning August 2 came in only a touch above expectations at +226k versus a +222k forecast. Continuing claims disappointed though, coming in at 1,974k versus a consensus of 1,950k, but this upside was concentrated in California and potentially reflected seasonal effects. Meanwhile, the New York Fed’s consumer survey showed both inflation expectations and labour market perceptions ticking up in July.
Bitcoin climbed +1.87% to $117,239 as Trump issued an executive order directing the Labour Department to re-examine guidance around alternative investments in 401(k)s, which would ease access to private equity, real estate, and digital assets in retirement accounts.
This morning in Asia, the Nikkei (+2.30%) is outperforming, driven by Tokyo’s Ryosei Akazawa's confirmation that the US will end the stacking of universal tariffs and cut levies on cars, adding that any overpaid levies will be refunded. The index performance was also boosted by stronger-than-expected household spending, which came in at 2.7% (vs. 1.3% expected), despite ongoing inflationary pressures. Elsewhere in Asia, markets are on the weaker side with the Hang Seng (-0.68%), Kospi (-0.81%) and S&P/ASX 200 (-0.13%) lower, while in China, the CSI (+0.06%) and Shanghai Composite (+0.07%) are relatively flat. S&P 500 (+0.29%) and NASDAQ 100 (+0.31%) futures are a decent amount higher. Gold futures increased their premium over spot in late New York trading after the FT reported that gold bullion bars will face US tariffs - a surprising move and another potential blow to Switzerland. The premium has jumped to around $100.
Looking ahead, today’s calendar includes Canada’s July jobs report, while we will hear from the Fed’s Musalem and the BoE’s Pill. The latter will be notable given the fascinating BoE meeting yesterday. Notable earnings releases include Munich Re and Wendy’s.