President Trump’s drastic tariffs will take effect
The new US tariffs are ready to target trade deficits with fees of up to 41% and key countries exemptions.
U.S. stock futures are high as investors search for signs that will help them determine if the economy is weaker after a shockingly weak employment report on August 1.
The Bureau of Labor Statistics said the companies added 73,000 new jobs in July than expected. Worse, the May and June job acquisitions have been revised at a whopping 258,000, portraying a labor market that is far weaker than they believed in spring and early summer, and last week it issued an alarm that the Federal Reserve could be wrong about not changing interest rates.
“We are pleased to announce that James Knightley, Chief International Economist at the Bank of Netherlands,” said: “This sentiment creates a great headwind for growth, as it is likely to feel more widespread among the number of (jobs) after the Fed (reserve) numbers, particularly at tariffs that are digging into household output and corporate profits.”
At 6am on ET, futures tied to the Blue Chip Dow rose 0.64%, while Broad S&P 500 futures added 0.64%, while Tech Heavy Nasdaq futures rose 0.76%.
Will the Fed get a lower price soon?
The CME FedWatch tool measures the likelihood that the Fed will change prices at upcoming policy meetings, indicating an over 89% chance of the Fed’s rate cuts at its September meeting.
But Comerica Bank’s chief economist Bill Adams said that while there is a high chance of interest rate cuts in September, it is not a solid bet.
“The decision is not a slam dunk as labor supply also fell in July,” he said. “In fact, labor levels have fallen for the third consecutive month… The Fed will look at its August employment report before its September rate decision. If labor supply is falling again and unemployment rates are stabilized while tariffs push inflation up, the Fed could once again stabilize interest rates.”
But if the Fed cuts in September, “this increases the likelihood of follow-up with 25 point cuts in October and December, despite a temporary increase in tariff inflation,” Knightly said.
Separately, President Donald Trump said he will nominate a new Federal Reserve governor and a new employment data statistician in the coming days. Last week, Governor Governor Adriana Kugler resigned from the central bank’s board on August 8, saying Trump fired U.S. Labor Statistics Commissioner Erika Mentarfer after a report from Wead Jobs.
“Of the two personnel changes in economic policy on Friday, Fed McEntarfer’s firing and Governor Kugler’s resignation — we believe the plunder of BLS Commissioners is more important.” McEntarfer’s firing “shows risks to monetary policy implementation, economic stability and economic outlook.”
More revenue in the future
In addition, revenue continues to roll out, with Tyson, Wayfair and Freshpets moving among companies that are planning to report before the opening bell.
According to data provider LSEG, results from 297 S&P 500 companies as of July 31 are estimated at 9.8% as of July 31, from an estimated 5.8% growth on July 1.
Later in the week, revenue from major companies like Disney, McDonald’s and Caterpillar will allow investors to see how the economy operates.
Oil sink
Oil prices, also known as Oil producers and their allies (also known as OPEC+), are under pressure after agreeing to increase production during a period of slowing the global economy and agreeing that fears of an oil surplus are ahead.
OPEC+ has agreed to an additional 547,000 barrels per day, starting in September.
Cryptocurrency
China reportedly denied enacting a new cryptocurrency ban. In 2021, China banned cryptocurrency trading and mining, but despite reports of the virus, no new ones have been issued.
Medora Lee is a money, market and personal finance reporter for USA Today. You can contact her at mjlee@usatoday.com and subscribe to our free daily money newsletter for personal finance tips and business news every Monday to Friday morning.
