Markets opened Thursday on a cautious note after a stormy session sparked by political noise from U.S. President Donald Trump, hotter U.S. PPI inflation data, and escalating global tensions. Fresh economic readings on retail sales and jobless claims added to the mix, keeping traders on edge through the early U.S. session.
While the crypto community finds reason for optimism with Trump backing critical digital asset legislation in Congress, broader risk appetite remains subdued.
Against this backdrop, the spot Gold price (XAU/USD) ends its two-day winning streak, slipping 0.95% to poke long-term support near $3,317 whereas Bitcoin (BTC/USD) also softens, down 0.80% around $117,800, as bulls hesitate despite the legislative push.
Meanwhile, the U.S. Dollar Index (DXY) hovers at a three-week-high, oil extends losses for the fourth day, and U.S. equity futures lean slightly negative despite Wall Street’s prior-day gains.
U.S. economic data surprised to the upside on Thursday, with June Retail Sales and Core Retail Sales both rising to three-month highs at 0.6% and 0.5% month-on-month, respectively — well above expectations of 0.1% and 0.3%, and rebounding sharply from prior declines of -0.9% and -0.2%. Weekly Jobless Claims also improved, dropping to 223,000 from 228,000 and beating the 233,000 forecast. Adding to the positive tone, the Philadelphia Fed Manufacturing Index surged to 15.9 in July — its highest reading since February — smashing expectations of -1.2 and recovering strongly from -4.0 previously.
On Wednesday, markets stayed on edge amid a mixed bag of U.S. economic data and mounting political drama. June’s Producer Price Index (PPI) cooled to 2.3% year-over-year, its lowest since September 2024, while Core PPI dropped to 2.6% from 3.0%, signaling softer inflation and weakening the U.S. Dollar slightly. However, industrial production surprised to the upside, rising 0.3% month-over-month and providing some economic support.
Still, traders remain cautious ahead of next week’s Core PCE release — the Fed’s preferred inflation measure — which is expected to remain firm. The Fed’s Beige Book revealed only a modest pickup in economic activity, while comments from Fed officials Bostic and Williams pushed back on expectations for near-term rate cuts, reiterating a data-driven approach. National Economic Council Director Hassett also noted inflation looked manageable but warned the Fed was behind the curve.
The real shock came from President Trump, who reportedly suggested removing Fed Chair Jerome Powell in a letter to GOP lawmakers, igniting fears over Fed independence. That sparked a wave of risk aversion, knocking down the U.S. Dollar, stocks, and bond yields, while lifting safe havens like gold, the Japanese Yen (JPY), and the Swiss Franc (CHF).
Trump later walked back the comments, admitting Powell’s removal could disrupt financial markets — helping risk sentiment stabilize and the U.S. Dollar regained ground.
On trade, Trump claimed progress on deals with India and the EU, while downplaying chances with Canada for now. Canadian Prime Minister Mark Carney confirmed there’s no agreement yet and stressed the need to diversify Canada’s trade ties.
Geopolitical tensions flared in the Middle East as Israeli PM Netanyahu lost his majority but approved a strike targeting Syria’s defense minister in Damascus. However, signs of diplomatic progress emerged, with reports hinting at a potential de-escalation between Israel and Syria. U.S. Secretary of State Marco Rubio confirmed that steps had been agreed to ease the situation, while envoy Witkopf noted positive momentum in Gaza talks.
Meanwhile, crypto traders are watching Capitol Hill closely. The U.S. House of Representatives, backed by Trump, advanced three major crypto bills — the GENIUS Bill (Guiding and Establishing National Innovation for U.S. Stablecoins Act), CLARITY Act, and Anti-CBDC Surveillance State Act — with a tight 217–212 vote.
The GENIUS Bill could be passed as soon as today, while the CLARITY Act may face delays into early next week. The Anti-CBDC bill, tied to the National Defense Authorization Act as part of a Republican deal, might take longer to become law.
Looking ahead, all eyes are on Wall Street’s opening and how markets digest the stronger-than-expected U.S. data, especially with Fed hawks likely to remain alert after Trump’s recent threats. Traders will also stay tuned for updates on the crypto bill votes and developments around tariffs and geopolitics.
While upbeat data may support the U.S. Dollar and pressure Gold and Bitcoin, stock market performance could stay mixed as earnings season rolls on amid lingering caution.
