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2w ago

Markets Hit Records as Jobs Weakness Lowers Near‑Term Fed Hike Odds

This week's July inflation readings could tip the Fed toward higher rates because oil supply risks from the Strait of Hormuz and tariff-driven goods costs keep price pressures elevated.

U.S. dollar, Euro, Yen, Pound, Turkish Lira, Yuan banknotes are seen in this illustration taken March 24, 2026. REUTERS/Dado Ruvic/Illustration/File Photo
Traffic signs in front of the Bank of Japan building in Tokyo, Japan, June 15, 2026. REUTERS/Kim Kyung-Hoon//File Photo
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Overview

  • A weaker-than-expected payrolls print that showed about 23,000 jobs lost last Friday trimmed traders' chances of a September rate rise to roughly the mid-40s percent, easing near-term pressure on the Federal Reserve.
  • U.S. stock benchmarks rallied to fresh highs after the jobs surprise, with strong corporate earnings—especially from AI-linked tech firms—providing further support for equities.
  • Oil has stayed elevated around the low $80s per barrel as Iran reiterated conditions for reopening the Strait of Hormuz and regional strikes and missile incidents have left shipping flows constrained.
  • Investors are focused on this week's July CPI and PPI reports because a hotter-than-expected reading would raise the odds of renewed Fed tightening despite the softer jobs data.
  • A separate dynamic is defense-driven industrial policy, highlighted by a Pentagon financing package for Sunrise Energy Metals, which shows how geopolitical supply risks are reshaping corporate winners and local economies.