Key Takeaways
- Fed rate cut bets grow as weak jobs data leads to the dismissal of the BLS chief, due to claims over data integrity and policy direction.
- Trump escalates trade pressure and war fears, threatening higher tariffs on India over Russian oil and signaling nuclear readiness amid rising tensions with Moscow.
- Bitcoin holds at $114,500, struggling for direction amid numerous macro forces and mixed risk sentiment.
- Gold eases 0.13%, as improving sentiment limits safe-haven flows, but geopolitical tensions provide support.
- Oil slips, with OPEC+ pushing ahead on output hikes despite slowing demand, outweighing the effect of U.S. sanctions risk on Russian supply.
On August 5, markets showed strong signs of recovery following a sharp weekend sell-off, as investors had enough time to absorb the initial shock and shifted their focus to the growing possibility of a Federal Reserve rate cut in September.
The weekend crash was triggered by President Trump’s sweeping tariff expansion affecting more than 50 countries.
Announced on August 1, the policy marked a significant shift in U.S. trade strategy, replacing decades of a globalist approach with a protectionist framework aimed at reducing trade deficits and protecting domestic industries.
While countries with balanced trade profiles will continue to face a 10% duty, 26 nations, including India, Vietnam, and Switzerland, will now be subject to sharply higher tariffs ranging from 19% to over 40%, based on the size of their trade imbalances with the U.S.
The policy shift, coupled with a disappointing U.S. jobs report that revealed 258,000 fewer positions created in May and June than initially estimated, sparked broad risk aversion across global markets.
By Monday, attention turned to President Trump’s dismissal of Bureau of Labor Statistics Commissioner Erika McEntarfer, after he questioned the integrity of the revised labor data. While no evidence of wrongdoing was provided, the move fueled concerns about political interference in economic reporting.
However, many investors saw the deepening political and economic uncertainty as adding pressure on the Federal Reserve to act, with hopes for a rate cut as early as September lifting sentiment across equities, gold, and cryptocurrencies by Tuesday morning.
Still, beneath the market’s recovery, geopolitical tensions continued to build. Trump issued fresh tariff threats against India, accusing the country of reselling Russian oil on the open market for profit and ignoring the humanitarian cost of the war in Ukraine. He said tariffs on Indian goods would be raised “substantially,” signaling more trade pressure ahead.
Meanwhile, the Kremlin reacted to Trump’s claim that he had repositioned two U.S. nuclear submarines in response to threats from former Russian President Dmitry Medvedev. While Moscow played down the significance of the claim, it warned that “everyone should be very, very careful” with nuclear threats.
Markets were caught between two powerful forces on Tuesday: rising geopolitical risks and growing hopes for monetary easing. While trade tensions and nuclear rhetoric kept nerves on edge, optimism prevailed as investors focused on the growing chance of a Fed rate cut next month.
The S&P 500 rose 1.47% to 6,329.93, the Dow gained 1.34% to 44,173.64, the Nasdaq climbed 1.95%, Gold edged down 0.13%, while Bitcoin slipped 0.58% to $114,389, paring back some of Monday’s gains.
Meanwhile, oil prices drifted lower as concerns about oversupply resurfaced, with OPEC+ moving ahead with another large production increase despite softening global demand, outweighing the potential impact of U.S. policy actions targeting Russian oil flows.
Global Indices
- S&P 500 (SPX): 6,329.93 ▲ 1.47%
- Dow Jones (DJI): 44,173.64 ▲ 1.34%
- Nasdaq (IIC): 21,053.58 ▲ 1.95%
- Nikkei 225 (NK225): 40,570.00 ▲ 0.62%
- Euronext 100 (N100): 1,558.34 ▲ 1.10%
- FTSE 100 (FTSE): 9,157.20 ▼ 0.07%
Cryptocurrencies
- Bitcoin (BTCUSD): $114,446 ▼ 0.56%
- Ethereum (ETHUSDT): $3,660.93 ▼ 1.61%
- Binance Coin (BNBUSDT): $762.68 ▼ 0.77%
- Solana (SOLUSDT): $167.73 ▼ 1.10%
Commodities
- Gold (XAUUSD): $3,369.78 ▼ 0.13%
- Silver (XAGUSD): $37.33 ▼ 0.16%
- WTI Crude (USOIL): $66.07 ▼ 0.27%
- Brent Crude (BRENT): $68.17 ▼ 3.68%
Major Stocks
- NVIDIA (NVDA): $180.00 ▲ 3.62%
- Tesla (TSLA): $309.26 ▲ 2.19%
- Microsoft (MSFT): $535.64 ▲ 2.20%
- Meta (META): $776.37 ▲ 3.51%
- Apple (AAPL): $203.35 ▲ 0.48%
- Amazon (AMZN): $211.65 ▼ 1.44%
Forex
- U.S. Dollar Index (DXY): 98.43 ▲ 0.16%
- EUR/USD (EURUSD): 1.1554 ▼ 0.12%
- GBP/USD (GBPUSD): 1.3278 ▼ 0.03%
- USD/JPY (USDJPY): 147.10 ▲ 0.02%
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