Closing Recap

U.S. stocks finished mostly lower in a mixed session, with the Nasdaq eking out a gain while the broader market faltered, as investors contended with new tariffs taking effect, a hawkish Bank of England, and ongoing speculation about the Federal Reserve’s leadership; gold rallied, oil and Treasury yields slipped. 

Key Takeaways 

• Mixed, Rotational Session: The Nasdaq finished slightly positive, lifted by names like Apple, while the Dow and S&P 500 declined. Defensive sectors and REITs outperformed, while Healthcare and Financials lagged. 
• Sweeping U.S. Tariffs Take Effect: President Trump’s “reciprocal” tariffs on dozens of U.S. trading partners officially kicked in today, raising concerns about global growth and supply chains. New tariffs on India and semiconductors were also announced. 
• Bank of England Hikes Rates: The BOE unexpectedly hiked interest rates, contrasting with easing by other central banks and adding to global policy uncertainty. 
• Fed Leadership Speculation Intensifies: Reports that Fed Governor Christopher Waller is a top candidate to replace Chair Powell, along with a new nomination to the Fed board, kept Fed policy in the spotlight. 
• Gold Rallies, Oil Slips: Gold prices climbed to a two-week high on safe-haven demand, while oil prices slipped as potential diplomatic progress between Russia/U.S. eased some geopolitical risk. 
• Yields Fall, Crypto Gains: Treasury yields declined despite a weak 30-year auction, while cryptocurrencies advanced after President Trump signaled support for their inclusion in 401(k) plans. 
• AI Arms Race Heats Up: OpenAI unveiled its new GPT-5 model, sparking a fresh round of debate and competition with Elon Musk’s xAI and its Grok models. 

Market Overview

U.S. equity markets navigated another volatile session, ultimately closing mostly lower as investors juggled a complex mix of economic concerns, corporate earnings, and significant policy developments. The day was marked by the official implementation of President Trump’s sweeping “reciprocal” tariffs on dozens of U.S. trading partners. Trump took to Truth Social at midnight to herald the “BILLIONS OF DOLLARS” in new revenue, while also announcing fresh tariffs on India and a 100% tariff on semiconductor imports, further rattling global supply chains. 

Index	Up/Down	% Change	Last
DJ Industrials	-224.42	-0.0051	43968
S&P 500	-5.06	-0.0008	6340
Nasdaq	73.27	0.0035	21242
Russell 2000	-6.54	-0.0029	2214

The market initially showed resilience but turned definitively lower as the day progressed. Defensive sectors like Utilities, Consumer Staples, and REITs were relative outperformers, while cyclical areas and Healthcare stocks, particularly Eli Lilly (LLY) on disappointing drug data, saw significant declines. The Nasdaq managed to close in positive territory, propped up by a few large-cap names like Apple, which continued to benefit from tariff-related headlines. 

Adding to the uncertainty, the Bank of England surprised markets with a hawkish interest rate hike, creating a stark contrast with other global central banks that have been easing. In Washington, speculation intensified around the future leadership of the U.S. Federal Reserve, with reports naming Governor Christopher Waller as a leading candidate to replace Chair Powell. President Trump also nominated a new governor to the Fed board. A weak 30-year Treasury bond auction added to afternoon pressure, briefly pushing yields higher before they retreated. In the tech world, OpenAI’s launch of its new GPT-5 model sparked a renewed public rivalry with Elon Musk’s xAI.

Economic Data

Economic data yesterday showed improving labor productivity but rising wage pressures, alongside a slight increase in jobless claims. 

• Q2 Non-Farm Productivity: +2.4% (Above +2.0% consensus, vs. -1.8% Q1). 
• Q2 Non-Farm Unit Labor Costs: +1.6% (vs. +1.5% consensus, +6.9% Q1). 
• Weekly Jobless Claims: Rose to 226,000 from 219,000, slightly above the 221,000 consensus. Continuing claims also climbed to 1.974 million. 
• Wholesale Inventories/Sales (June – Revised): Inventories +0.1% (vs. +0.2% est.). Sales +0.3% (vs. +0.1% est.). Stock/sales ratio unchanged at 1.30 months. 
• NY Fed Inflation Expectations (July): 1-year ahead rose to 3.1%. 5-year ahead rose to 2.9% (highest since March). 
• Freddie Mac Mortgage Rates (Weekly): 30-year fixed rate fell to 6.63%, the lowest since April. 

Commodities, Currencies, and Treasuries 

Gold prices rallied to a two-week high, with August futures gaining $20.30 (+0.59%) to settle at $3,453.70 per ounce. The metal benefited from safe-haven demand amid the tariff implementations and ongoing geopolitical uncertainty. Crude oil prices slipped, with WTI settling down $0.47 (-0.73%) at $63.88/bbl. Prices turned lower after the Kremlin announced a potential meeting between Presidents Putin and Trump, which was seen as easing some geopolitical risk premium. 

Asset	Up/Down	Unit / % Change	Last
WTI Crude	-0.47	USD/bbl	63.88
Brent	-0.02	USD/bbl	66.87
Gold	20.3	USD/oz	3453.7
EUR/USD	-0.0028	USD	1.1631
USD/JPY	0.12	JPY	147.47
10-Year Note	0.016	%	0.04248

Treasury yields rose, with the 10-year yield climbing about 1.6 basis points to 4.248%, driven by a very poorly received 30-year bond auction that showed weak demand and a large “tail.” The U.S. dollar was mixed, weakening against the Euro but strengthening against the Yen. Cryptocurrencies advanced after President Trump signaled he would sign an executive order allowing their inclusion in 401(k) plans.

Looking Ahead 

The market will continue to digest the impact of the newly implemented U.S. tariffs and watch for any retaliatory actions from targeted countries. Investor sentiment remains fragile, with AAII bears now outnumbering bulls, suggesting increased caution. With Q2 earnings season largely complete, macroeconomic data and policy headlines (trade, Fed) will be the primary market drivers. The ongoing debate about the future leadership of the Federal Reserve also adds a significant layer of uncertainty.