5 things to know before the stock market opens on Monday
Over the weekend, President Donald Trump disputed a Wall Street Journal report that said Treasury Secretary Scott Bessent advocated against firing Federal Reserve Chair Jerome Powell. Trump, who is suing the publication over a story that said the president sent a "bawdy" birthday letter to Jeffrey Epstein, called the report involving Bessent and Powell "typically untruthful" in a social media post. This marks the latest chapter in the public and escalating saga between the White House and the central bank chief. For weeks, Trump's disciples have ratcheted up attacks on Powell as the Fed holds interest rates steady amid uncertainty tied to the president's contentious tariff plan.
Speaking of tariffs, Commerce Secretary Howard Lutnick on Sunday reaffirmed the Aug. 1 deadline set by the White House in its plan for broad and steep levies. (For those who keep their calendars up-to-date, that's next Friday.) Lutnick told CBS News that the U.S. would start expecting payments tied to the tariffs on that date and that it was a "hard deadline," but he noted that countries can continue negotiating beyond the deadline. However, U.S. trading partners may be wondering if the commerce chief's statement is more bark than bite — especially after previously set deadlines were pushed back.
Alaska Airlines resumed operations early Monday morning after grounding all of its flights for around three hours because of an IT outage. The company did not immediately share specifics on the type of outage, according to Reuters. Just last month, Alaska-owned Hawaiian Airlines faced a hack to some of its IT systems. Tech companies are taking notice and have raised alarm on hackers showing particular interest in the aviation sector. In other cyber news, Microsoft on Saturday reported "active attacks" on its servers used by government agencies and businesses.
Astronomer CEO Andy Byron, who captured the internet's fascination after being caught on camera during a Coldplay concert embracing his company's human resources chief, has resigned. If you need to go back to the start (pun intended): A clip went viral showing Byron ducking out of view after being filmed in an intimate position with Kristin Cabot, Astronomer's chief people officer. If it wasn't awkward enough, lead singer Chris Martin says in the now-famous clip that "either they're having an affair or they're just very shy." Byron's departure comes after the company, which was little-known prior to the viral video, said on Friday that it was launching a formal investigation into the incident.
—,
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
17 minutes ago
- Yahoo
AI drives new highs
By Jamie McGeever ORLANDO, Florida (Reuters) -TRADING DAY Making sense of the forces driving global markets By Jamie McGeever, Markets Columnist Key U.S. and global stock markets clocked fresh highs on Thursday as Alphabet's earnings lifted tech, while investors digested the European Central Bank's interest rate decision and the latest signals from the European Union on trade talks with the U.S. More on that below. In my column today I ask if the stock market euphoria around the incoming U.S. trade deals is warranted. Remember, tariffs will be the highest since the 1930s and are set to raise inflation and lower growth. If you have more time to read, here are a few articles I recommend to help you make sense of what happened in markets today. 1. ECB keeps rates steady as it awaits clarity over trade 2. Big central bank rate cuts slow with tariffs andpolitics in headlights 3. Conditions as loose as 2021 call into question more Fedcuts: Mike Dolan 4. Meme stock surge underlines market froth, mostlycentered on retail investors 5. In earnings season, it's AI good, everything else, notso much Today's Key Market Moves * S&P 500, Nasdaq, FTSE 100 and MSCI All Country all hit newhighs again. * But the Dow and Russell 2000, less tethered to the AIfrenzy, fall 0.7% and 1.4%, respectively. * Some big U.S. names post big share price declines on Q2earnings: Tesla -9%, IBM -8%, Honeywell -5%. * Oil snaps a four-day losing streak to rise over 1%. * China's yuan hits its strongest level this year againstthe U.S. dollar, both onshore and offshore. AI drives new highs In the absence of major economic data surprises, monetary policy changes or trade deal news on Thursday, world markets took their cue from corporate earnings, which continue to point to strength in artificial intelligence-related activity. Google's parent company Alphabet grabbed the spotlight, its second-quarter results highlighting that the heavy investment in AI is paying off. Indeed, a trend may be emerging from the earnings season that shows businesses focused on AI are massively outperforming companies like airlines, restaurants and food manufacturers that cater more to actual people. This isn't just a U.S. thing, it's global. Of course, this isn't a blanket rule but it will be worth keeping an eye on as the earnings season progresses. So far at least, investors are accentuating the positive and major indices are making new highs on a near daily basis. On the policy front, the ECB kept its deposit rate on hold at 2.0% as expected, biding its time while Brussels and Washington try to negotiate a trade deal that could ease tariff uncertainty. It appears that the bar to resume the easing cycle in September is a high one, and the euro closed the day little-changed around $1.1765. The U.S. economic data on Thursday were relatively upbeat, showing an acceleration in service sector activity and the lowest jobless claims figures in three months. With numbers like that, the S&P 500 at a record high and wider financial conditions loose, the Fed may not be in such a hurry to cut rates. And on that score, investors will be paying close attention to the readout from U.S. President Donald Trump's visit to the Fed late on Thursday. Fed Chair Jerome Powell is expected to be present during the visit. It will be an awkward meeting - Trump has repeatedly demanded that the Fed slash interest rates and has frequently raised the possibility of firing him. On Tuesday, he called Powell a "numbskull." Markets' trade deal euphoria ignores tariff reality The optimism sweeping world stock markets following news of emerging and expected U.S. trade deals is undeniable and understandable. But it is also puzzling. The S&P 500, Britain's FTSE 100 and the MSCI All Country index have powered to new highs this week, and other global benchmarks are not far behind. Analysts at Goldman Sachs and other big banks have recently been raising their year-end S&P 500 forecasts by as much as 10%. The catalyst is clear: baseline tariffs on imported goods into the U.S. will be much lower than the duties President Donald Trump had threatened previously. It emerged this week that the levy on Japanese goods will be 15%, not 25%, and indications are that a deal with the European Union will land on 15% too. That's half the rate Trump had threatened to impose. Suddenly, the picture is nowhere near as bleak as it looked a few months ago. Economists reckon that the final aggregate U.S. tariff rate will settle around 15-20% once deals with Brussels and Beijing are reached, a level markets are betting won't tip the economy into recession. This suggests that Trump's seemingly chaotic strategy – threaten mutually assured economic destruction, extract concessions and then pull back to limit the market damage – is paying off. But will it? SOMEONE MUST PAY Despite the market euphoria, the fact remains that on December 31 last year, the average aggregate U.S. tariff on imported goods was around 2.5%. So even if that ends up in the anticipated 15-20% range, it will still be at least six times what it was only a few months ago, and comfortably the highest it has been since the 1930s. U.S. Treasury Secretary Scott Bessent estimates that tariff revenues this year could reach $300 billion, which is the equivalent to around 1% of GDP. Extrapolating last year's goods imports of $3.3 trillion to next year, a 15% levy could raise close to $500 billion, or just over 1.5% of GDP. So who will pick up that tab? Is it the U.S. consumer, importers or the overseas exporters? Or a mixture of all three? The likelihood is it will mostly be split between U.S. consumers and companies, squeezing household spending and corporate profits. Either way, it's hard to see how this would not be detrimental to growth. We may not know for some time, as it will take months for the affected goods to come onshore and get onto U.S. shelves and for the tariff revenues to be collected. "We've got a ways to go before we can really say the U.S. economy is feeling the full effect of the tariff policies being announced," Bob Elliott, a former Bridgewater executive and founder of Unlimited, told CNBC on Wednesday. But in the meantime, equity investors appear to be ignoring all of this. SIGNS OF FROTH The market's short-term momentum is clear. The S&P 500 has closed above its 200-day moving average for 62 days in a row, the longest streak since 1997, according to Carson Group's Ryan Detrick. And the 'meme stock' craze is back too, another sign that risk appetite may be decoupling from fundamentals. Indeed, markets are priced for something approaching perfection. The consensus S&P 500 earnings growth for next year is 14%, according to LSEG I/B/E/S, barely changed from 14.5% on April 1, just before Trump's "Liberation Day" tariff salvo. Even the 2025 consensus of around 9% isn't that much lower than 10.5% on April 1. A Reuters poll late last year showed a 2025 year-end consensus estimate for the S&P 500 of 6,500. The index is nearly there already, and is trading at roughly the same multiple as it was on December 31, a 12-month forward price-to-earnings ratio of 22. Can these lofty expectations be supported by an economy whose growth rate next year is expected to be 2% or less? Possibly. But it will be a challenge for most firms, with the exception of the 'Magnificent Seven' tech giants whose size might better shield them from tariffs or slowing growth. Ultimately, this is all a huge experiment pitting protectionist trade policy and Depression-era tariffs against the economic orthodoxy of the past 40 years. And it's yet another example of equity investors' ability to find the silver lining in almost anything. As Brian Jacobsen, chief economist at Annex Wealth Management, says: "'It could have been worse' is not a good foundation for a market rally". What could move markets tomorrow? * Japan Tokyo CPI inflation (July) * Japan services PPI inflation (June) * UK GfK consumer confidence (July) * UK retail sales (June) * Germany Ifo business sentiment index (July) * U.S. durable goods (June) * U.S. Q2 earnings Want to receive Trading Day in your inbox every weekday morning? Sign up for my newsletter here. Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias. (By Jamie McGeever; Editing by Nia Williams) Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
17 minutes ago
- Yahoo
Nasdaq, S&P 500 Reach New Highs as Markets Track Latest Earnings
The Nasdaq Composite and the S&P 500 climbed to fresh highs on Thursday as traders digested the late
Yahoo
17 minutes ago
- Yahoo
‘You just added a third building': Powell fact checks Trump's Fed renovation as awkward hard-hat visit turns tense
President Donald Trump's attempt to shame Federal Reserve Board of Governors chair Jerome Powell over the cost of a long-running renovation to the central bank's Washington headquarters went horribly wrong on Thursday when Powell had a ready response for the president's accusations during a tour of the construction site. After viewing parts of the costly renovation, Trump and Powell stopped briefly to speak to reporters who'd traveled to the Federal Reserve headquarters with the president. Trump said the cost of the years-long project was now 'about $3.1 billion' rather than the $2.7 billion previously stated by Powell. 'So we're taking a look, and it looks like it's about 3.1 billion went up a little bit or a lot. So the 2.7 is now 3.1 it just came out,' he said reading from a piece of paper, as Powell looked on and shook his head in the negative before interjecting. The chairman replied: 'I haven't heard that from anybody' and asked if the paper Trump was reading from came from the central bank. At that point, Trump handed him the paper and continued talking while Powell pulled out his reading glasses to look. He then told the president that the higher number he was claiming included a separate project that wasn't part of the renovation at issue. 'You just added in a third building,' he said. When Trump replied that the building in question was currently 'being built,' Powell spoke up once more to disabuse the president of his misunderstanding of what he was reading. He told Trump that he was mistakenly counting long-completed renovations to a building named for William Martin Jr., who served as Fed chair from 1951–1970, as part of the renovation of the Fed's main headquarters. 'No, it's been it was built five years ago. We finished Martin five years ago,' he said. Asked by reporters if he expects more overruns on the lengthy project, Powell said the Fed is 'ready' for any but doesn't expect more. 'We have a little bit of a reserve that we may use, but no,' he said before adding that he expects to project will wrap in 2027 — a year after his term as chairman is set to end. Trump and his allies have said the $2.5 billion renovation of the Fed headquarters and a neighboring building reflects an institution run amok — a belief they had hoped to verify in an afternoon tour of the construction site. The site visit by the president is an attempt to further ratchet up pressure on Powell, whom the Republican president has relentlessly attacked for not cutting borrowing costs. Trump's attacks have put the Fed, a historically independent institution, under a harsh spotlight. Undermining its independence could reduce the Fed's ability to calm financial markets and stabilize the U.S. economy. The president has made no secret of his distaste for Powell, whom he nominated to lead the Federal Reserve in 2017, primarily because of Powell's refusal to lower interest rates, particularly in light of Trump's decision to levy tariffs. Powell has said that the central bank needs time to see what effects tariffswill have on inflation and employment before making a determination on interest rates. This has prompted Trump to call Powell a 'stupid person.' The president can do little to remove Powell. Joe Biden re-nominated Powell for another five-year term in 2021 based on his steady leadership during the 2020 COVID-19 pandemic, and his term would expire in May. Federal statute says the president can only remove Powell 'for cause.' For a time, it appeared as if Trump and his allies had found such a cause in the costly renovation of the Fed's headquarters. But Trump, a former real estate developer, appeared to soften his criticisms of the project after viewing it himself. Appearing in his element while sporting a hard hat, Trump said he would like to see the project finish. 'In many ways it's too bad it started, but it did start, and it's been under construction for a long time. Gonna be it's going to be a real long time, because it looks like it's got a long way to go,' he said. A short time later, he told reporters that he'd had a 'very good tour' and declined to repeat his earlier criticisms of the project. He did, however, give a detailed description of the project's complexity with regard to a basement being dug beneath the Washington, D.C. water table. 'I was given a very nice tour by the head of construction. And, you know, look, if you look over here, they're trying to open up the basement. When you open up a basement, first of all, it's the worst space — always. A basement is the worst space in a building, and it's also the most expensive space to build, and especially here, because you have a water line, you know, you they're going down into the water. So they have to build a reverse, what's called a reverse bathtub. The water has to be kept out. It's very expensive construction,' he said. 'There's always Monday morning quarterbacks. I don't want to be that. I want to help them get it finished. It's been going around for years, and I want to help them get it finished.' He later wrote on Truth Social that it had been a 'great honor' to tour the building. 'It's got a long way to go, would have been much better if it were never started, but it is what it is and, hopefully, it will be finished ASAP,' he said. 'The cost overruns are substantial but, on the positive side, our Country is doing very well and can afford just about anything — Even the cost of this building!' He added that he'd be 'watching' the project and hoped to add his own expertise, citing his eponymous real estate company's renovation of the historic Old Post Office building into the hotel that became a MAGA hotspot during his first term before it was sold in 2021. 'The total Construction cost was a small fraction of the Fed Building's cost, and it is many times the size. With all of that being said, let's just get it finished and, even more importantly, LOWER INTEREST RATES!' he said. Despite the president's past criticism, it appears he has backed down from his implicit threat to fire Powell due to negative reaction from markets. Last week during an Oval Office press opportunity, Trump told reporters it was 'highly unlikely' that he would upend nearly a century of precedent by attempting to sack Powell less than a day after he reportedly polled a group of Republican lawmakers on whether he should sack the central bank boss during a Tuesday night meeting in the Oval Office after the 12 House Republicans blocked a cryptocurrency bill favored by the president. With additional reporting by agencies and Washington Bureau Chief Eric Garcia
