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Stock Market
The positive mood during the US session faded, especially after a rather strong opening.
At the time of writing this report, the Dow Jones is gaining over 0.8%, breaking records and remaining the only bright spot in the US cash market.
The S&P 500 gave back some of its gains after initial increases and is currently hovering around zero.
The situation looks significantly worse for the tech-heavy Nasdaq, which is down about 0.4%.
The indexes are primarily weighed down by shares of SpaceX and AMD, which reported relatively strong quarterly results, but the market expected better outcomes.
On the flip side, Nvidia is gaining as the market reacted positively to news about SpaceX utilizing its AI technology.
The current earnings season should be considered very strong, with the vast majority of companies reporting results that beat market forecasts.
After today’s session, SanDisk and Western Digital Corporation will report their financial results.
Geopolitics
Iran and Oman are continuing talks regarding the creation of a safe route for ships through the Strait of Hormuz, although an agreement remains uncertain.
According to a Persian Gulf state representative, the chances of reaching a deal by Friday are around 50%.
Iran reported that coordinates for the proposed route have been agreed upon, which could operate temporarily for 2–4 months, and a joint statement from both countries is being finalized.
Donald Trump assessed that the situation around Iran is “developing very well,” suggesting progress in negotiations aimed at ending the conflict and reopening the Strait of Hormuz.
According to the US President, negotiations are heading in the right direction, and details may be presented in the near future.
At the same time, reports suggest that the US and Iran remain in indirect contact, though Tehran emphasizes that it is not currently engaging in direct talks with Washington.
Tehran notes that it received messages from Washington regarding its readiness to return to previous commitments.
However, Iran claims that merely restoring US commitments will not be enough to fully open the Strait of Hormuz, and negotiations continue in an atmosphere of deep distrust.
The new route agreed upon with Oman is intended to be a temporary solution, rather than a complete end to the conflict.
Macroeconomics
The ADP report on private-sector employment in the US showed a clear slowdown in the labor market.
In July, private companies added only 44k jobs, while around 75k were expected (following a downwardly revised 95k in June).
The largest employment gains were recorded in the education and health care sectors, whereas weaker results appeared in hospitality, food services, and parts of manufacturing.
The data suggests that the US labor market is gradually losing momentum, but does not yet point to a sharp deterioration — companies are still rarely laying off workers, they are simply hiring more slowly.
US services sector data showed that the economy maintains a solid pace of growth.
The stronger reading suggests that demand in the US economy remains robust, particularly in services, which account for the largest portion of US GDP.
The ISM Services PMI also confirmed the sector’s resilience, although the result was slightly weaker than expected: the index stood at 54.1 pts. versus the forecasted 54.5 pts.
Growth was mainly driven by new orders (rising to 57.2 pts.), but costs remain an issue — the prices paid index stayed above 70 pts., pointing to persistent inflationary pressure.
At the same time, the employment component weakened, suggesting that companies remain cautious regarding recruitment.
For markets, this represents a mixed signal: the US economy shows no signs of a sharp slowdown (which is positive for equities), but a strong services sector and high prices could make it difficult for the Fed to cut interest rates quickly.
Combined with the weaker ADP report, the market gets a picture of an economy that is still growing but beginning to gradually slow down — which could be a favorable “soft landing” scenario if inflation continues to fall.
Commodities
Ongoing peace talks are directly impacting crude oil prices (Brent), which currently sit below the $80 level.
Precious Metals
A very positive mood is observed in the precious metals market.
The price of gold rose above $4,200 per ounce, as investors began to assume that a potential US–Iran agreement and the reopening of the Strait of Hormuz could limit the risk of rising oil prices and inflation.
Silver is gaining over 4% and is sitting at the $62 level.
Cryptocurrencies
Positive sentiment is also evident in the crypto market.
Bitcoin is gaining about 0.6% and is trading around $64,500.
Ethereum is gaining over 1% and is testing the $1,900 level.
XTB.COM
