S&P 500 +1.47% to 6,329.94 US yields fall again: 10-year -2.8 bps to 4.197% Gold up for a third consecutive session: +0.35% to $3,374.24 an ounce DXY -0.09% to 98.60What to look out for today
Companies reporting on Tuesday, 5th August:Advanced Micro Devices, Caterpillar, Amgen, Pfizer, Duke Energy, BP, Marriott International, Marathon Petroleum, Suncor Energy, Yum! Brands, Super Micro Computer, Fox, Devon Energy, News Corp, Snap, Rivian Automotive
Key data to move markets today
China: Caixin Services PMI.
EU: HCOB Services and Composite PMIs for the Eurozone, Spain, Germany, and France, and Eurozone PPI.
US: S&P Global Composite and Services PMIs, ISM Services PMI, Prices Paid, New Orders Index, and Employment Index.
US Stock Indices
Dow Jones Industrial Average +1.34%.
Nasdaq 100 +1.87%.
S&P 500 +1.47%, with 10 of the 11 sectors of the S&P 500 up.
US stocks rallied on Monday, as last week's economic concerns gave way to widespread dip-buying and optimism for potential Fed funds rate cuts. All three major US indexes saw gains of more than one percent, marking their largest single-day percentage increases since May. The rally was broad-based, with gains seen across sectors.
The S&P 500 advanced by +1.47%, the Nasdaq composite was +1.95%, and the Dow Jones Industrial Average climbed 585 points, or +1.34%, following its worst weekly performance since April.
Investors are closely monitoring a new trade deadline on Thursday, which sets the stage for last-minute tariff negotiations between the White House and foreign nations. Additionally, traders will be analysing earnings reports later this week from global brands such as McDonald's, Disney, and Uber.
While Wall Street investors drove the S&P 500 to ten new all-time highs in July, corporate executives were moving in the opposite direction. Insider purchases within the S&P 500 reached their lowest level since at least 2018, with only 151 companies seeing insider buying. According to data from the Washington Service, while insider selling slowed from June, purchases dropped even more, leading to the lowest buy-to-sell ratio in a year.
In corporate news, Tesla approved a provisional stock award for CEO Elon Musk worth approximately $30 billion. This massive payout is intended to keep his focus on the company amid an ongoing legal dispute over his 2018 compensation package.
Spotify announced it will increase premium subscription prices in many markets outside the US.
Workers at Boeing's defence factories near St. Louis are on strike for the first time in nearly three decades after union members rejected a revised contract offer.
CommScope Holding reached an agreement to sell its broadband and cable equipment division to Amphenol for roughly $10.5 billion in cash. This is the second such deal with Amphenol as part of CommScope's strategy to sell off assets to pay down debt.
Lyft has partnered with China's Baidu to launch autonomous vehicles in Europe next year, following the US rideshare company's first expansion into the continent.
S&P 500 Best performing sector
Communication Services +2.59%, with The Trade Desk +4.28%, Live Nation Entertainment +3.52 %, and Meta Platforms +3.51%.
S&P 500 Worst performing sector
Energy -2.87%, with Exxon Mobil -2.07%, Occidental Petroleum -1.27%, and APA -1.03%.
Mega Caps
Alphabet +3.05%, Amazon -1.44%, Apple +0.48%, Meta Platforms +3.51%, Microsoft +2.20%, Nvidia +3.62%, and Tesla +2.19%.
Information Technology
Best performer: Monolithic Power Systems +5.73 %.
Worst performer: ON Semiconductor -15.58%.
Materials and Mining
Best performer: Newmont +4.52 %.
Worst performer: LyondellBasell Industries -4.72%.
European Stock Indices
CAC 40 +1.14%.
DAX +1.42%.
FTSE 100 +0.66%.
Corporate Earnings Reports
Posted on Monday, 4th August
- Palantir quarterly revenue +48.0% to $1.004 bn vs. $1.004 bn estimate.
EPS at $0.16 vs. $0.16 estimate.
Alex C. Karp, Co-Founder and CEO, said, “This was a phenomenal quarter. We continue to see the astonishing impact of AI leverage. Our Rule of 40 score was 94%, once again obliterating the metric. Year-over-year growth in our U.S. business surged to 68%, and year-over-year growth in U.S. commercial climbed to 93%. We are guiding to the highest sequential quarterly revenue growth in our company’s history, representing 50% year-over-year growth.” — see report.
- Vertex Pharmaceuticals quarterly revenue +11.3% to $2.994 bn vs. $2.906 bn estimate.
EPS at $4.52 vs. $4.27 estimate.
Reshma Kewalramani, CEO and President, said, “Vertex delivered a strong quarter of revenue growth with each of our three product launches — ALYFTREK, JOURNAVX, and CASGEVY — contributing, as well as continued advancement of our clinical programs. As we enter the second half of the year, we are focused on expanding leadership in cystic fibrosis, executing the launches, advancing the pipeline, and preparing for submissions and commercialization in additional disease areas.” — see report.
- MercadoLibre quarterly revenue +33.8% to $6.790 bn vs. $6.674 bn estimate.
EPS at $10.31 vs. $11.93 estimate.
In its letter to shareholders, the company stated, “Mercado Libre delivered another strong quarter in Q2'25 with net revenues & financial income growing 34% YoY and maintaining its high pace of expansion. We are encouraged by the progress we are making towards our long-term goals of being the destination of choice for online commerce in Latin America, becoming the region's largest fintech and building the best value proposition for advertisers in branding and search. We took bold steps on all three fronts this quarter. These actions will help us to build greater scale and further enhance customer experience and satisfaction. We are pleased with the business’ performance and remain confident in Mercado Libre's long-term growth potential.” — see report.
Commodities
Gold spot +0.35% to $3,374.24 an ounce.
Silver spot +1.01% to $37.39 an ounce.
West Texas Intermediate -1.37% to $66.32 a barrel.
Brent crude -1.18% to $68.71 a barrel.
Gold prices increased for the third consecutive session on Monday on heightened expectations for Fed interest rate cuts.
Spot gold rose +0.35%, reaching $3,374.24 per ounce, its highest valuation since 24th July. Year-to-date, gold has appreciated by +28.79%.
On Monday, oil prices reached their lowest point in a week. This decline was primarily due to the decision by OPEC+ to significantly increase output for September and US data indicating diminishing fuel demand.
Brent crude futures fell by $0.82 or -1.18%, settling at $68.71 a barrel. Similarly, WTI crude fell by $0.92 or -1.37%, to close at $66.32 a barrel. These drops followed a near three percent decline on Friday.
The downturn was fuelled by the OPEC+ agreement to boost oil production by 547,000 barrels per day (bpd). This accelerated output increase reverses the group's largest tranche of cuts, representing approximately 2.5 million bpd or 2.4% of global demand.
While OPEC+ justified the increase by citing strong market fundamentals, analysts noted that the actual supply increase from the eight OPEC+ countries that have raised output since March will likely be 1.7 million bpd due to cuts from other members who had previously overproduced. Traders are now preparing for potential further supply increases, as OPEC+ may discuss unwinding an additional 1.65 million bpd of cuts at their next meeting on 7th September.
Last week, US government data revealed the weakest gasoline demand in May since the 2020 COVID-19 pandemic, despite the start of the summer driving season. The data also indicated that US oil production reached a monthly record high in May.
However, the US President has threatened to impose 100% secondary tariffs on Russian crude buyers in an effort to pressure Russia over its war in Ukraine. On Monday, Trump announced he would substantially raise tariffs on India for its purchases of Russian oil. This development helped limit the day's losses, as analysts estimate that about 1.7 million bpd of crude supply would be at risk if Indian refiners stopped buying Russian oil.
BP's Bumerangue field: a quarter-century milestone.BP has announced its most significant oil and gas discovery in 25 years with a successful well in the Bumerangue field, located off the coast of Brazil. This find marks a major milestone for the company as it renews its focus on fossil fuels.
The Bumerangue field is situated in the Santos Basin, approximately 400 km from Rio de Janeiro, and spans over 300 square kilometers. According to BP, this is the company's largest discovery since the 1999 Shah Deniz find, a massive gas field in the Caspian Sea holding an estimated 35 trillion cubic feet of gas.
The new field is believed to contain a mixture of gas, condensate, and oil. However, BP stated that it is currently too early to determine the precise size or quality of the reserves. The company also noted the detection of elevated carbon dioxide levels, a factor that could complicate extraction, increase processing costs, and potentially impact the project's economic viability.
BP holds a 100% licence for the field, having been the sole bidder in a 2022 auction. The terms of the agreement are considered commercially favourable, requiring BP to pay 5.9% of its profits to the Brazilian government after recovering its initial costs.
Note: As of 5 pm EDT 4 August 2025
Currencies
EUR -0.18% to $1.1568.
GBP +0.02% to $1.3280.
Bitcoin +1.12% to $115,138.56.
Ethereum +4.99% to $3,710.75.
The US dollar experienced a slight decline on Monday, following a series of market-moving events on Friday that highlighted its vulnerability. These events included a disappointing US NFP jobs report, the unexpected resignation of a Fed Governor, and the dismissal of a top statistics official by the US President.
The US President dismissed Bureau of Labor Statistics Commissioner Erika McEntarfer, alleging that the jobs numbers were falsified. Additionally, the resignation of Fed Governor Adriana Kugler provides the US President an earlier-than-expected opportunity to influence the central bank. This comes amid his ongoing public disagreement with the Fed over its timeline for lowering interest rates.
The dollar index fell by -0.09% to 98.60, continuing its more than 1.3% slide from Friday. In afternoon trading, the dollar strengthened against the euro and the Swiss franc. The euro dipped -0.18% against the dollar, reaching $1.1568, while the dollar rose +0.50% against the Swiss franc to $0.8078 following the introduction of 39% US tariffs on Switzerland. The dollar also gained against commodity-linked currencies, including the Australian and New Zealand dollars.
The British pound saw minimal change, rising just +0.02% to $1.3280. However, the dollar fell slightly against the Japanese yen, -0.06% to ¥147.11.
Fixed Income
US 10-year Treasury -2.8 basis points to 4.197%.
German 10-year bund -5.1 basis points to 2.628%.
UK 10-year gilt -2.0 basis points to 4.510%.
US Treasury yields experienced a slight decline in choppy trading on Monday.
The yield on the 10-year Treasury note fell by -2.8 bps to 4.197%, marking its lowest level since 1st July. This comes after Friday's government payrolls report for July not only missed expectations, but also included significant downward revisions to the data for May and June.
The yield on the 30-year bond was -3.9 bps to 4.796%. The two-year Treasury yield, which is highly sensitive to interest rate expectations, also fell by -1.3 bps to 3.685%, after previously hitting 3.659%, its lowest since 1st May. This followed Friday’s substantial -24.7 bps decline, its largest single-day decline since 2nd August, 2024.
The Treasury is scheduled to auction $58 billion in 3-year notes on Tuesday, $42 billion in 10-year notes on Wednesday, and $25 billion in 30-year bonds on Thursday.
Fed funds futures traders are now pricing in a 94.4% probability of a rate cut in September, up from 63.1% last week, according to CME Group's FedWatch Tool. Traders are currently anticipating 62.5 bps of cuts by year-end, higher than the 44.7 bps expected last week.
Across the Atlantic, eurozone bond yields declined on Monday.
The decline in borrowing costs across the bloc on Friday reflected increased market expectations for ECB rate cuts, although this movement was less pronounced than in the US. Analysts suggest that US tariffs could create a growth shock that might outweigh a one-time inflationary effect, as tariffs contract profit margins and reduce the real purchasing power of households.
Despite the market's sentiment, the ECB provided a cautiously optimistic assessment of the eurozone economy last week, leading some investors to question the likelihood of further policy easing. Eurozone inflation remained stable at the ECB's 2% target in July, strengthening the argument for policymakers to keep interest rates steady.
Germany's 10-year yield was -5.1 bps to 2.628%, following a 1.5 bps drop on Friday. The two-year German yield was -4.8 bps to 1.883%. In Italy, the 10-year yield dropped by -7.9 bps to 3.439%. The yield spread between Italy and Germany's 10-year bonds narrowed by 3.3 bps to 81.1 bps, its lowest level since April 2010.
The yield spread between US and German 10-year government bonds rose by 2.3 bps to 156.9 bps but remained near levels not seen since early April. On Friday, this spread had tightened by 13.3 bps—its largest daily contraction since early March—to 154.6 bps, the lowest since 8th April.
On Monday, money markets maintained their outlook on the ECB's monetary policy, pricing in 60 bps of rate cuts by December. This is approximately 20 bps more than what was expected before Friday's data and suggests an almost 90% probability of an easing move in September.
Note: As of 5 pm EDT 4 August 2025
Global Macro Updates
Fallout continues from Friday's dismissal of BLS Commissioner McEntarfer. President Trump's dismissal of the head of the Bureau of Labor Statistics (BLS) last Friday is shaking markets as investors worry about institutional independence and credibility. President Trump’s action followed a nonfarm payrolls report that included substantial downward revisions to the May and June jobs data. Goldman Sachs noted that these were the largest two-month revisions since 1968, outside of a recession. President Trump accused the official of falsifying the jobs numbers before the election, also citing an 818,000 downward revision in the August 2024 Quarterly Census of Employment and Wages report.
Numerous news outlets, including the New York Times, have expressed concern over the move, while analysts have highlighted the lack of a suitable replacement for high-quality federal data. Over the weekend, White House economic adviser Kevin Hassett defended the President's decision, arguing on CNBC that frequent revisions are ‘hard evidence’ of manipulation at the bureau and that the US President wants ‘his own people’ in place to ensure reliable reports. President Trump has indicated that a new appointment could be made this week.
The BLS is scheduled to publish a preliminary estimate for jobs data through March 2025 on 9th September. Goldman Sachs anticipates a downward revision in the range of 550,000 to 950,000 jobs.
US - EU trade deal on tariffs nears completion, putting European automakers on edge. An evolving trade agreement between the EU and the US is poised to reshape the global automotive sector, with significant implications for European car manufacturers. According to Bloomberg news, President Trump is expected to formalise a reduction in tariffs on EU car and auto part exports, lowering them from 25% to a baseline of 15%. While some sectors, such as aviation, may secure exemptions, automakers are expected to face sustained pressure.
Initial hopes from German firms for company-specific offsets—such as credits for US-made exports or investment-based reductions—have largely diminished. Politico reported that Mercedes-Benz Group considers the EU - US deal essentially final, while BMW continues to advocate for bilateral carve-outs, despite trade policy being an exclusive competency of the EU.
The financial toll of these tariffs is already evident. Porsche Automobil has reported €400 million in tariff-related losses, with its margins reduced by two-thirds. Stellantis faces an estimated $1.5 billion in annual costs. In a corresponding move, the EU has agreed to eliminate its 10% import levy on US vehicles, raising concerns about potential job displacement in Europe. Up to 70,000 jobs are reportedly at risk as production shifts to the US.
Politico reported a September EU summit is scheduled to gather top automotive CEOs to advocate for further relief and policy alignment.
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