U.S. producer prices rose at a faster-than-anticipated rate in July as a tariff-fueled jump in goods was joined by the biggest advance in the cost of services in more than three years, muddying the outlook for a possible upcoming Federal Reserve interest rate cut.

A chunk of the 1.1% jump in the index for final services demand for the month was fueled by a rise in expenses for machinery and equipment wholesaling, according to figures from the Bureau of Labor Statistics. The indices for portfolio management, securities brokerage, traveler accommodation, and freight transportation also advanced.

Final demand goods, meanwhile, moved up by 0.7%, the largest increase since January, with roughly a quarter traced back to higher prices for fresh and dry vegetables. Prices for gasoline, on the other hand, decreased.

Stripping out volatile items like food and fuel, the measure rose by 0.4%, after a 0.9% gain in June, while a climb in passenger car costs eased to 0.1% from 0.3%. But home electronic equipment costs surged by 5% versus the prior month, while sporting and athletic items -- seen as particularly exposed to elevated U.S. levies -- increased by 1.2%

Analysts had been curious to see if goods inflation, especially for items like furniture, apparel and toys that are viewed as susceptible to the duties, would be offset by what have been recently muted services costs.

The producer price index for final demand increased by 0.9% on a monthly basis in July, accelerating after it was unchanged in June. In the twelve months to July, the figure came in at 3.3%, speeding up from 2.4%. It was the largest such uptick since February.

Economists had predicted readings of 0.2% and 2.5%, respectively.

"July PPI came in hot," said Kathy Jones, Chief Fixed Income Strategist at Charles Schwab, in a post on X. Jones noted that Treasury yields are up "as the Federal Reserve needs to weight this against a softening labor market."

A weak July jobs report, as well as tepid consumer price data released earlier this week, have spurred on expectations that the Fed will slash borrowing costs at its September meeting. It would be the first drawdown by the central bank since it paused its policy easing cycle last December.

Investors have been widely pricing in a 25-basis point reduction after the Fed’s September 16-17 gathering. Treasury Secretary Scott Bessent, meanwhile, has called for an even deeper half-point cut due partially to sharp downward revisions in job growth in June and May.

In a note, analysts at Capital Economics estimated that, with the consumer price data and PPI in hand, the core personal-consumption expenditures deflator is now at 0.32% month-over-month, "implying that the three-month annualized rate jumped back up to 3.2%, from 2.7%." The Fed factors in these numbers as it deliberates over policy actions.

"Nonetheless, with almost 0.1%-point of the monthly gain reflecting the one-off surge in the portfolio management PPI, it probably won’t have much influence on the Fed’s decision on whether to cut in September," said Stephen Brown, Deputy Chief North America Economist at Capital Economics.

Brown added that the "more concerning development" revolves around indications that "services prices might be accelerating."

1. Futures rise

Futures contracts linked to the largest U.S. indices rose, pointing to an extension in gains logged in the prior session that were fueled by muted inflation figures.

By 03:36 ET (07:36 GMT), the S&P 500 futures contract had advanced by 33 points, or 0.5%, and Nasdaq 100 futures had climbed by 264 points, or 1.1%, and Dow futures had gained 49 points, or 0.1%.

All three of the major averages on Wall Street rallied by more than 1% on Tuesday, spurred on by data showing that headline year-over-year consumer price growth in July matched the preceding month. The numbers bolstered wagers that the Federal Reserve will cut interest rates at its upcoming meeting next month, with officials at the central bank seen opting to prioritize supporting a flagging labor market over still above-target price gains.

"Inflation was broadly in line with expectations as tariffs continue to be largely absorbed within U.S. corporate profit margins. This gives the Fed the room to respond to the weaker jobs backdrop," analysts at ING said in a note.

Both the benchmark S&P 500 and tech-heavy Nasdaq notched fresh record closing highs, while yields on short-dated U.S. Treasuries -- which are particularly sensitive to rate expectations -- dipped. Yields tend to move inversely to prices.

2. Cisco to report

On the earnings calendar, Cisco Systems is set to kick off a string of releases from companies whose reporting quarter finished at the end of July.

The results, due out after the closing bell, are anticipated to beat expectations thanks partially to "general strength" in Cisco’s firewalls business and cybersecurity subscribers, according to analysts at Piper Sandler.

"Cisco is still experiencing net-momentum into the second half, with early networking prints a good signal for the space and 2026 likely a good refresh period," the analysts led by James Fish wrote.

They added that Cisco’s fiscal year 2026 guidance will be "key," particularly after Mark Patterson replaced Scott Herren as the firm’s finance chief. Herren, who retired in July, is leaving after Cisco raised its fiscal 2025 results outlook, banking on artificial intelligence helping to sustain demand from cloud customers for its networking equipment.

Observers also noted that the contribution of Splunk (NASDAQ:SPLK), the cybersecurity group Cisco bought for $28 billion in 2024, will now be folded into the company’s organic numbers. The transaction was the largest in Cisco’s history and reflected a push to more deeply integrate AI into its operations.

3. Perplexity’s $34.5 bn bid for Google’s Chrome

Perplexity AI has put forward a $34.5 billion unsolicited all-cash offer to buy Alphabet-owned Google’s Chrome brower, marking a push by the startup to harness the data needed to train its AI model from the service’s billions of users.

The news comes as Google faces a legal battle over antitrust concerns surrounding its all-important search business.

Last year, a U.S. judge ruled that Google had spent billion of dollars to illegally create a monopoly that made it the world’s dominant search engine. The decision cleared the way for a number of potential fixes, including the breaking up of Alphabet (NASDAQ:GOOGL) through a sale of Chrome. Such a move could fundamentally alter the world of online advertising that has long been a centerpiece of Google’s operations.

Perplexity, which previously submitted a bid for TikTok US as the short-form video app dealt with concerns in Washington around its Chinese ownership, did not disclose how it plans to fund its bid. The firm was last valued at $14 billion, and has raised roughly $1 billion in backing from investors like SoftBank (TYO:9984) and Nvidia (NASDAQ:NVDA).

4. Ether near all-time peak

Bitcoin gained slightly, while Ether hovered around record highs as cryptocurrency markets rallied on the mild U.S. consumer inflation data.

Ether also surged amid a flurry of buying as corporate entities stockpile the world no. 2 cryptocurrency in a manner similar to Bitcoin. The digital token rose as much as 8.5% to $4,683.0, coming within touching distance of a $4,861 record high hit in November 2021.

Several U.S.-listed companies outlined plans to increase their Ether holdings this week amid growing adoption of a Bitcoin buying strategy popularized by Michael Saylor’s Strategy.

The world’s biggest corporate Bitcoin holder, Strategy has raised billions of dollars through share issuances, which it has then largely used to fund Bitcoin purchases over the last two years.

5. Gold inches higher

Gold prices pushed up in early European trading, supported by hopes for Fed policy easing, while investors also looked ahead to U.S.-Russia talks due later this week.

Spot gold had risen by 0.3% to $3,359.54 an ounce, while gold futures for December climbed by 0.3% to $3,408.22/oz by 03:35 ET.

Following Tuesday’s muted inflation figures, markets are now pricing in a more than 96% probability of a September cut, according to CME’s FedWatch Tool. Lower interest rates reduce the opportunity cost of holding non-yielding assets such as gold, making bullion more attractive to investors.

However, gold’s advance was tempered by geopolitical developments, with traders closely watching Friday’s summit between U.S. President Donald Trump and Russian President Vladimir Putin in Alaska.

The meeting will focus on the war in Ukraine, and market participants are weighing the possibility of proposals for a ceasefire.

 U.S. stock futures are mixed ahead of the publication of crucial inflation data that could offer more clarity around the Federal Reserve’s interest rate trajectory. Meanwhile, the current chief economist of the conservative think tank Heritage Foundation is tapped to be the new commissioner of the U.S. Bureau of Labor Statistics, just days after the former head was dismissed following a weak jobs report. Elsewhere, billionaire Elon Musk accuses Apple (NASDAQ:AAPL) of favoring OpenAI’s ChatGPT on its App Store over a model from his artificial intelligence start-up xAI.

1. Futures mixed

U.S. stock futures hovered around both sides of the flatline on Tuesday, as investors geared up for the release of key inflation data.

By 02:58 ET (06:58 GMT), the Dow futures contract had risen by 75 points, or 0.2%, S&P 500 futures had dipped by 7 points, or 0.1%, and Nasdaq 100 futures had slipped by 38 points, or 0.2%.

The main averages on Wall Street slipped in the prior session, with markets assessing a reported move by semiconductor majors Nvidia (NASDAQ:NVDA) and Advanced Micro Devices (NASDAQ:AMD) to agree to grant the U.S. government a 15% cut of their artificial intelligence chip sales to China. Shares of both firms were choppy, ending down by 0.35% and 0.28%, respectively, as observers flagged that the levy could dent their margins and establish a precedent allowing the White House to tax critical exports.

Traders also seemed to shrug at President Donald Trump’s announcement of a 90-day extension to a trade truce between the U.S. and China, analysts at Vital Knowledge said, adding that the outcome was "widely expected." The detente struck earlier this year was due to expire on Tuesday.

2. CPI ahead

Economic data is once again set to be in the spotlight, with the latest monthly consumer price index due out on Tuesday.

The closely-monitored gauge of inflation is expected to accelerate slightly to 2.8% in the twelve months to July, and cool to 0.2% month-over-month. Stripping out volatile items like food and fuel, so-called "core" CPI is tipped to speed up to 3.0% year-over-year and 0.3% on a monthly basis.

Analysts anticipate that the Federal Reserve’s interest rate decision next month could be swayed in part by the latest numbers.

Following a weak July jobs report and sharp downward revisions to the readings for June and May, bets have risen that the central bank will slash borrowing costs by 25 basis points at its upcoming gathering in September. As a result, any indication that inflation is either in-line or below projections could further bolster these wagers.

However, signs of hotter-than-estimated price gains may give policymakers some pause, particularly as the Fed has recently adopted a more cautious attitude to rate cuts partially due to worries that Trump’s aggressive tariff agenda could drive up inflation. The stance has drawn the ire of Trump, who has called for immediate and deep drawdowns, while dissent to the "wait-and-see" approach was notable in the Fed’s last policy decision in July.

3. Trump nominates new BLS head

Swirling around the inflation numbers will likely be fresh questions around the reliability of government data, especially after Trump fired the commissioner of the Labor Department’s Bureau of Labor Statistics in the wake of last month’s soft jobs report.

Without providing evidence, Trump accused the head of BLS, Erika McEntarfer, of doctoring the figures to damage him politically.

On Monday, Trump said he had nominated economist E.J. Antoni as McEntarfer’s replacement. The Senate must still confirm the appointment.

Antoni holds a doctoral degree in economics and has previously been an outspoken critic of the BLS, which is charged with collecting and publishing numbers on the world’s largest economy that are tracked by investors, companies and policymakers alike.

Trump wrote on his social media platform that "E.J. will ensure that the Numbers released are HONEST and ACCURATE."

Yet analysts quoted by Reuters have noted some reservations around Antoni, who is currently the chief economist of the conservative think tank Heritage Foundation. They added that there may be an increase in demand for private-label data as a result of the nomination.

4. Musk threatens Apple with legal action

Elon Musk accused Apple’s App Store of engaging in anticompetitive behavior, saying his artificial intelligence startup xAI will take “immediate legal action” over what he described as favoritism toward OpenAI’s ChatGPT.

In posts on his social media platform X late on Monday, Musk said Apple’s practices “make it impossible for any AI company besides OpenAI to reach #1 in the App Store, which is an unequivocal antitrust violation."

The Tesla (NASDAQ:TSLA) CEO questioned why X and xAI’s chatbot app Grok were absent from Apple’s “Must Have” section despite, as he claimed, being the world’s top news app and the fifth-ranked app overall, respectively.

“Are you playing politics? What gives?” Musk wrote, also alleging that ChatGPT appears “in every list where (Apple has) editorial control.”

OpenAI CEO Sam Altman responded on X, saying, “This is a remarkable claim given what I have heard alleged that Elon does to manipulate X to benefit himself and his own companies and harm his competitors and people he doesn’t like.”

5. RBA rate decision

The Reserve Bank of Australia slashed interest rates as expected and signaled that it will likely ease monetary policy further as officials gauge possibly cooling inflation in the country.

Tuesday’s cut to the RBA’s benchmark rate to 3.60% from 3.85% is the third such move this year. It previously kicked off the easing cycle in the first quarter.

The RBA said that slowing inflation will likely spur more rate cuts. It also lowered its outlook for economic growth in 2025, which it now sees falling below 2%.

Lingering in the background this week is a highly-anticipated meeting between U.S. President Donald Trump and Russian counterpart Vladimir Putin on Friday, with the two expected to discuss a potential Ukraine peace plan. On the trade front, a fragile tariff truce between the U.S. and China is due to expire on August 12, with no sign having yet emerged of a possible extension to their agreement.  

Meanwhile, the Bank of Canada will unveil a summary of its latest gathering on Wednesday. Two weeks ago, the central bank left interest rates steady, but signaled a willingness to cut rates should there be a weakening in the Canadian economy and inflation pressures remain muted.

Futures tick up

U.S. stock index futures edged marginally higher, pausing for breath after the previous week’s sharp gains, with investors awaiting key inflation prints due later in the week.

At 06:55 ET, Dow Jones Futures traded 108 points higher, or 0.3%, S&P 500 Futures gained 7 points, or 0.1%, and Nasdaq 100 Futures were mostly unchanged.

The tech-heavy Nasdaq Composite jumped on Friday, closing at a fresh all-time high, helped by Apple’s stock price surging by more than 13% last week -- its largest weekly gain since 2020. The other averages also gained last week.

CPI leads data deluge this week

This broadly positive tone on Wall Street faces the test of key economic data this week, with the focus on the release of U.S. consumer price data for July on Tuesday.

A separate gauge of producer prices for final demand is due out on Thursday, while a metric of American retail sales and a survey of consumer sentiment are expected to be published on Friday.

The weak July jobs report at the start of the month, which also included a sharp downward revision to the numbers for June and May, has increased expectations that the Federal Reserve will cut interest rates next month.

Along with the labor market, inflation remains the other crucial pillar of the Federal Reserve’s two-pronged mandate, and it remains stubbornly elevated above the Fed’s stated 2% target. Additionally, the tariffs that the Trump administration has increased on imports from a number of trading partners are expected to lift domestic prices.

“Consensus is expecting another acceleration in core CPI, to 0.3% month-on-month (3.0% year-on-year), in this week’s July print,” said analysts at ING, in a note. “That is a number that can probably be seen as acceptable for the Federal Reserve to proceed with a September cut, given the backdrop of a significantly weaker jobs market.”

Nvidia/AMD to pay U.S. government for China sales?

Corporate earnings results for the second quarter have generally been better than expected, and investor reactions to these results have been more outsized than usual, possibly indicating that markets are homing in more on individual company performances than broader economic trends, according to analysts at Barclays (LON:BARC).

The earnings slate is largely empty Monday, but eyes will be on Nvidia (NASDAQ:NVDA) and Advanced Micro Devices (NASDAQ:AMD) after media reports suggested both chipmakers are set to pay the U.S. government 15% of the returns they make from the sale of its artificial intelligence to China.

Shares of C3.ai (NYSE:AI) were sharply lower in extended hours trading after the enterprise AI application software group issued a disappointing preliminary earnings announcement.

Crude stable ahead of Ukraine talks

Oil prices stabilized, after last week’s selloff ahead of scheduled talks between the U.S. and Russia later this week on the war in Ukraine.

At 06:56 ET, Brent futures edged higher to $66.71 a barrel, and U.S. West Texas Intermediate crude futures added 0.1% to $63.97 a barrel.

Both benchmarks fell by more than 4% last week as traders digested the news that Trump will meet Russian President Vladimir Putin on August 15 in Alaska to negotiate an end to the war in Ukraine.

Expectations have risen for a potential end to sanctions that have limited the supply of Russian oil to international markets.

Gold eases

Gold prices retreated, adding to the losses seen at the end of last week, as traders looked ahead to the Trump-Putin summit.

Trump’s deadline last Friday for Russia to strike a peace deal with Ukraine passed without stricter U.S. sanctions imposed on Moscow, and this has helped ease tensions. Demand for safe-haven gold was dented, as a result.

"But with Russia demanding that Ukraine cede occupied territory to end the war, it’s difficult to see a quick solution," said analysts at ING, in a note. "It’s unlikely that Ukraine will agree to give up its own territory."

At 07:00 ET, Spot Gold fell 1.2% to $3,358.80 an ounce and Gold Futures for December dropped 2.2% to $3,413.20/oz.

U.S. stock index futures rose on Friday after President Donald Trump’s temporary pick for a Federal Reserve governor fueled expectations of a more dovish central bank board.

Trump said on Thursday he would nominate Council of Economic Advisers Chairman Stephen Miran as Fed Governor Adriana Kugler’s interim replacement, following Kugler’s surprise resignation last week.

U.S. stocks lost steam on Thursday after Bloomberg News reported that Fed Governor Christopher Waller is emerging as a top candidate to be the central bank’s next chair.

Trump has repeatedly criticized Fed Chair Jerome Powell for not cutting interest rates and has accelerated the search for a replacement after several retracted threats to oust Powell before his term ends on May 15.

The White House’s push to overhaul the central bank’s leadership has fueled worries about its independence. At the same time, investors believe revising Fed leadership could favor looser monetary policy that aligns with Trump’s agenda.

According to the CME Group’s (NASDAQ:CME) FedWatch tool, traders broadly expect the Fed’s first rate cut of the year next month and see at least two reductions by year-end.

At 5:31 a.m. ET, S&P 500 E-minis were up 16 points, or 0.25%, Nasdaq 100 E-minis were up 72.25 points, or 0.31% and Dow E-minis were up 61 points, or 0.14%.

The Nasdaq eked out a record closing high on Thursday after signs that major technology firms could avoid Trump’s new tariffs on chip imports by manufacturing in the United

But the S&P 500 and the Dow ended lower, weighed down by a 14.1% drop in Eli Lilly (NYSE:LLY) after results from a late-stage study on its experimental GLP-1 pill fell behind that of Novo Nordisk (NYSE:NVO)’s.

Meanwhile, U.S. tariffs on a bunch of trading partners took effect at midnight on Thursday. Tokyo’s trade negotiator said Washington will amend a presidential executive order to remove overlapping tariffs on Japanese goods, terming it as oversight.

In earnings-related moves, Trade Desk (NASDAQ:TTD) sank 29% in premarket trading after the ad-tech firm reported a sharp slowdown in second-quarter revenue growth.

Pinterest (NYSE:PINS) tumbled 12.5% as the social media platform missed analysts’ estimates for second-quarter profit.

Microchip Technology (NASDAQ:MCHP) lost 7.9% after the chipmaker’s first-quarter results failed to impress investors.

U.S. stock futures climbed higher Thursday, buoyed by a relatively solid earnings season as President Donald Trump’s latest tariff barrage takes effect.

At 05:55 ET (09:55 GMT), Dow Jones Futures traded 240 points, or 0.5%, higher, S&P 500 Futures rose 47 points, or 0.7%, and Nasdaq 100 Futures gained 170 points, or 0.7%.

The main averages on Wall Street rose in the prior session, buoyed by strong quarterly reports, while strong gains from iPhone-maker Apple underpinned the gains.

Week to date, the S&P 500 has gained 1.7%, the NASDAQ Composite has added 2.5% and the 30-stock Dow Jones Industrial Average has advanced 1.4%. 

Apple soars on $100 billion investment pledge 

Apple (NASDAQ:AAPL) shares soared over 5% on Wednesday, and have continued to rise in premarket trading, after the White House said the company would pledge an additional $100 billion in domestic manufacturing over the next four years, raising its total U.S. investment commitment to approximately $600 billion.

The move is seen as both a policy alignment with the Trump administration and a strategic response to rising trade tensions.

Traders have continued to monitor tariff developments, with U.S. President Donald Trump imposing an additional 25% tariff on India, bringing total U.S. levies on the major trading partner to 50%.

The president said the hike is because India continues to buy Russian oil, a sign that he is following through on his threats to punish Russia’s trade partners unless a Ukraine peace deal is reached by September.

Meanwhile,Trump said he would impose a tariff of about 100% on imported semiconductors, though products from companies that build chips within the U.S. would be exempt. 

Q2 earnings season in final stretch

With the reporting season now in its final stretch, LSEG data showed that more than 80% of companies that have reported so far have exceeded earnings expectations.

There are more earnings in digest Thursday, including reports from Eli Lilly (NYSE:LLY) and Warner Bros Discovery (NASDAQ:WBD) before the bell, while Block (NYSE:XYZ) and Pinterest (NYSE:PINS) are slated to report in the afternoon.

In extended trading, Airbnb (NASDAQ:ABNB) stock slumped after the vacation rental company forecast weaker growth for the rest of the year.

DoorDash (NASDAQ:DASH) stock climbed higher after the food delivery company reported a strong second-quarter earnings report that beat expectations, boosted by resilient demand for food and grocery delivery services despite a challenging consumer environment.

Shares of engineering materials manufacturer Rogers (NYSE:ROG) jumped in extended trading after the Wall Street Journal reported that activist investor Starboard Value took a more than 9% stake in the company. 

Jobless claims due 

Weekly initial jobless claims are due later in the session, and are expected to show that initial claims for unemployment benefits rose by 3,000 to 221,000 for the week ended August 2. 

Last week’s disappointing payrolls report raised expectations that the Federal Reserve will cut interest rate cuts next month, with some Fed policymakers having signaled a willingness to slash rates at the central bank’s upcoming meeting in September to address the cooling labor market, even as worries remain that the tariffs could fuel inflation.

Traders are pricing in around a 94% chance of a Fed cut in September, up from 48% a week ago, according to the CME Group’s FedWatch Tool. In total, traders see 60.5 basis points in cuts this year.

Crude bounces on U.S. demand 

Oil prices rose Thursday, helped by signs of strong U.S. demand, although concerns about the macroeconomic impact of U.S. tariffs and the potential for the return of Russian oil remain.

At 05:55 ET, Brent futures gained 0.5% to $67.22 a barrel, and U.S. West Texas Intermediate crude futures rose 0.5% to $64.67 a barrel.

Crude markets were supported from a bigger-than-expected draw in U.S. crude inventories last week.

The Energy Information Administration said on Wednesday that U.S. crude oil stockpiles fell by 3 million barrels in the week ended August 1, exceeding analysts’ expectations for a relatively small draw.

Both benchmarks had fallen to their lowest in eight weeks on Wednesday, on a five-day losing streak, after Trump indicated progress in talks with Moscow over ending the war with Ukraine, potentially leading to the return of Russian oil to the global market .

Still, despite a more positive tone, the U.S. continues preparations to impose secondary sanctions, including potentially on China, to pressure Moscow to end the war in Ukraine.

Ayushman Ojha contributed to this article

Trump’s Fed appointment in spotlight

The greenback has struggled to recover from the slump late last week after the disappointing jobs report, with data on Tuesday showing the U.S. services sector activity unexpectedly flatlined in July even as input costs climbed by the most in nearly three years, underscoring the hit from Trump’s tariffs on the economy.

Traders continue to price in around a 90% chance of a Fed cut in September, with about 56 basis points worth of easing expected by the year-end.

There’s little in the way of significant economic data due Wednesday, and thus attention is firmly focused on who the U.S. president chooses to replace resigning Fed board member Adriana Kugler, with Trump saying on Tuesday he will decide on a nominee by the end of the week.

“Trump’s open attacks on the Bureau of Labor Statistics over payroll revisions have not had much market impact, but it will be interesting to see whether the selected Fed chair candidate echoes that narrative,” said analysts at ING, in a note. 

“If so, it could ignite fears of a disconnect between Fed policy and official data - a scenario we see as decidedly dollar-negative.”

Sterling awaits BoE meeting 

In Europe, EUR/USD edged higher to 1.1576, even after German industrial orders unexpectedly fell in June, declining for a second straight month, due to falling demand from abroad.

Orders were down by 1% on the previous month, much weaker than the expected rise of 1.0%. 

Eurozone retail sales are expected to rebound 0.4% on a monthly basis in June from the previous month’s drop of 0.7%, with the data due for release later in the session.

“EUR/USD remains almost entirely driven by the dollar leg, and we continue to see decent upside potential mostly on the back of the Fed’s dovish repricing rather than any supportive eurozone story,” said ING.

GBP/USD slipped slightly to 1.3295, trading in a tight range ahead of this week’s policy-setting meeting of the Bank of England.

The U.K.’s central bank is widely expected to cut its key interest rate to 4% from 4.25% on Thursday and to lower it once more before the end of the year, despite consumer price inflation rising to close to double the central bank’s 2% target in June.

Indian rupee stabilizes after RBI stands pat

Elsewhere, USD/JPY traded marginally higher to 147.66, following weaker-than-expected average cash earnings data for June, which pointed to sluggish wage growth, which could in turn herald some cooling in inflation. 

AUD/USD rose 0.4% to 0.6489, recovering further from a recent fall to one-month lows, while USD/CNY gained 0.1% to 7.1891, with focus on more U.S. tariffs against the country over Beijing’s continued buying of Russian oil.

USD/INR fell 0.1% to 87.697, after briefly surging to a record high over 88 rupees earlier this week.

The Indian currency saw some relief after the Reserve Bank of India (NSE:BOI) left interest rates unchanged at 5.50%, defying some market expectations that it would cut rates further. 

Expectations for a cut had stemmed from increasing headwinds for the Indian economy, especially from higher U.S. trade tariffs. 

The RBI has cut rates by a cumulative 1% so far in 2025.

U.S. President Donald Trump could use a new vacancy at the Federal Reserve to appoint his chosen successor to the central bank’s current Chair Jerome Powell, according to analysts at Wolfe Research.

Last week, Fed Governor Adriana Kugler, whose term was due to expire in January 2026, resigned earlier than had initially been anticipated.

Trump has since indicated that he plans to announce his pick to replace Kugler and carry out the rest of her term as soon as this week. Although the Senate -- which is currently on recess -- will not reconvene to approve the appointment until early September, analysts have noted that Trump could still fill the position temporarily.

"This is the one guaranteed vacancy that Trump has on the Fed Board of Governors, which raises the possibility that he will use it to put his intended successor to Powell on the board," the Wolfe Research analysts said in a note.

Speculation has swirled around Powell’s future, fueled in large part by Trump’s repeated attacks on the Fed leader.

Trump has called on the central bank to quickly lower interest rates to boost the economy, but Powell and other policymakers have continued to support a "wait-and-see" approach to future rate actions, citing uncertainty over the impact of the White House’s aggressive tariff agenda on inflation and employment.

Powell’s term is set to expire next May. Should Trump nominate his intended replacement before that date, he could be creating a so-called "shadow Fed Chair" that may undermine Powell’s leadership "sooner rather than later," the Wolfe analysts said.

"We started hearing about the concept of a shadow chair kicking around the Trump campaign policy apparatus last year, and eventually [Treasury Secretary Scott] Bessent, then advising candidate Trump and vying for the Treasury job, publicly put his name to the idea in October," the analysts wrote. "With Bessent publicly supportive of this idea, and Trump’s frustration with Powell only growing over time, we would guess he will welcome the chance to move early."

The strategists led by Tobin Marcus argued that they still expect National Economic Council Director Kevin Hassett to be Trump’s choice to replace Powell, particularly due to Hassett’s "academic expertise and reliable loyalty" to the White House. Other reported contenders include Bessent, former Fed Governor Kevin Warsh and current Fed member Christopher Waller.

"Any of these choices will have a similar import for the near-term rate path, as they’ll have clear marching orders

from Trump on rate cuts," the analysts wrote.

1. Futures higher

U.S. stock futures pointed higher on Monday following a sharp sell-off at the end of the prior week, as the prospect of lower interest rates helped to assuage worries over the U.S. economy.

By 03:00 ET (07:00 GMT), the Dow futures contract had risen by 128 points, or 0.3%, S&P 500 futures had climbed by 24 points, or 0.4%, and Nasdaq 100 futures had increased by 102 points, or 0.4%.

The main averages on Wall Street sank on Friday, with the benchmark S&P 500 in particular slipping to its worst day in more than two months. Weighing on sentiment were President Donald Trump’s announcement of elevated tariffs on a range of trading partners as well as a soft jobs report which featured heavy downward revisions that suggested a deeper slowdown in the American labor market than initally anticipated.

Trump added to the selling pressure after he dismissed the head of the statistics bureau charged with compiling the jobs data, arguing -- without evidence -- that the numbers were "rigged." Analysts flagged that the firing casts doubt over the longstanding reliability of U.S. economic data, with some noting concerns that Trump’s replacement could be more keen to please the White House than provide scrupulous figures.

Markets reacted to the July employment survey by ratcheting up their expectations for a Federal Reserve borrowing cost cut as soon as September, although media reports suggested that many Fed policymakers are not yet shifting their stance in an aggressively dovish direction, choosing instead to wait for further data to be released.

2. Earnings ahead

Also offering support to stocks has been a broadly solid corporate earnings season, which has helped to underline the staying power of a multi-year boom in enthusiasm around the applications of artificial intelligence.

Big-name tech companies like Facebook-owner Meta Platforms (NASDAQ:META) and software group Microsoft (NASDAQ:MSFT) have delivered blowout results in recent days and, perhaps more notably, backed their plans for massive capital expenditures on AI.

These statements have tamped down some lingering fears over the impact of Trump’s tariffs, although a selection of firms have begun to hint that price hikes could be coming in the months ahead.

Still, with more than half of the businesses in the S&P 500 having reported, year-on-year earnings growth for the second quarter is seen at 9.8%, compared with an estimated uptick of 5.8% on July 1, according to LSEG data cited by Reuters. More than 80% of the companies that have reported have topped analysts’ profit expectations, versus an average of 76% in the past four quarters.

This week, markets will be keeping an eye on earnings from the likes of economic bellwether Caterpillar (NYSE:CAT), burger titan McDonald’s (NYSE:MCD), and media giant Disney (NYSE:DIS). All of the firms are large members of the blue-chip Dow, which is now hovering just below its record high notched in December.

3. Berkshire Hathaway results

Berkshire Hathaway has posted a $3.76 billion write-down on its stake in consumer food company Kraft Heinz (NASDAQ:KHC), while a fall in insurance underwriting premiums also dented second-quarter returns from Warren Buffett’s sprawling conglomerate.

Along with tepid gains from common stocks such as American Express (NYSE:AXP) and Apple (NASDAQ:AAPL), the Kraft-Heinz write-down and premiums drop contributed to a steep decline in overall net profit to $12.37 billion from $30.35 billion in the same period a year ago. Revenue also fell by 1.2% to $92.5 bilion.

Still, Berkshire was boosted by an almost 20% jump in operating income at its BNSF unit that stemmed in large part from cost-cutting and lower fuel expenses.

Berkshire’s cash pile at the end of the second quarter stood at $344 billion, down slightly from $348 billion in the previous three-month period but near an all-time record high.

The earnings come as Berkshire looks ahead to the upcoming departure of the 94-year old Buffett. He will step down at the end of 2025 from his long-time post at the helm of a business that has turned him into a household name in financial markets, with current Vice Chair Greg Abel set to succeed him.

4. Crude steady despite OPEC+ production hike

Oil prices steadied Monday, even after a group of top producers agreed to another large production hike in September, adding to global supply.

At 03:10 ET, Brent futures slipped 0.2% to $69.80 a barrel, and U.S. West Texas Intermediate crude futures rose 0.3% to $67.53 a barrel.

The Organization of the Petroleum Exporting Countries and their allies, known as OPEC+, agreed on Sunday to raise oil production by 547,000 barrels per day for September.

The move, in line with market expectations, marks a full and early reversal of OPEC+’s largest tranche of output cuts, amounting to about 2.5 million bpd, or about 2.4% of world demand.

5. Spot gold price dips

Gold prices were mixed in early European trading on Monday, as investors booked some profits following a rise in the prior session fueled by expectations for Fed interest rate cuts.

Spot gold had fallen 0.2% to $3,355.69 an ounce, while gold futures for December gained 0.3% to $3,408.67/oz by 03:34 ET.

Gold prices jumped over 2% on Friday, after the weak jobs data sparked hopes for a Fed rate reduction in September. The rally in the yellow metal, which tends to do well in a lower-rate environment, helped carry it to a weekly gain after two straight weeks of declines.

Elsewhere, Bitcoin moved higher by 0.8% to $114,567.60, steadying after slipping by roughly 3% over the past five days.

Ahead of a much-anticipated August 1 deadline for his "reciprocal" duties to come into effect, Trump signed a proclamation on Thursday night lifting tariffs to as much as 50% on dozens of countries, as he steps up his drive to upend a global trading system he has described as unfair to U.S. interests. The levies are now set to activate at 12:01 am on August 7.

Major industrialized economies such as the European Union, Japan and South Korea will face duties of 15%, while other countries who run a trade surplus with the U.S. will be hit with tariffs of 10%.

Even higher tariffs are set to be slapped on other nations, including 50% levies on Brazil. Trump increased tariffs on Canada to 35% for goods that do not comply with the U.S.-Mexico-Canada Agreement, which was signed during Trump’s first term.

Meanwhile, Trump and Mexican counterpart Claudia Sheinbaum said Mexico was granted another 90-day reprieve to forge an agreement with Washington.

In a note, the Wolfe analysts estimated the aggregate tariff hike would amount to roughly $58 billion, below its prior projection of $85 billion, due largely to additional deals with countries notched this week.

"The incremental easing from deals with South Korea et al. was partially offset by higher tariffs on India, Taiwan, and some other countries not covered by Trump’s letters," the strategists wrote.

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Meanwhile, the anticipated total effective U.S. tariff rate of 16.1% could rise further when separate sector-specific levies on semiconductors and pharmaceuticals roll out in the weeks ahead, the analysts suggested.