Major indices are currently split between red and green, with the S&P 500 and Nasdaq Composite in the red while the Russell 2000 and Dow Jones are in the green.

Magnificent Seven names are lagging overall, splitting major indices. They make up large portions of the S&P 500 and Nasdaq.

Technology (XLK) and Industrials (XLI) are in the red as investors rotate out of the two best performing sectors year-to-date. Meanwhile, Health Care (XLV) is the best performing sector, getting a boost from favorable earnings reactions to IQVIA Holdings (IQV) and Quest Diagnostics (DGX).

We are seeing a continuation of yesterday’s trend in commodities, with metals like copper, gold, and silver in the green while oil and natural gas are in the red.

The Ten-Year Treasury Yield (TNX) is also continuing its trend from yesterday, currently down 3.8 basis points and breaking below the 200-day moving average.

Economic Data

The Richmond Fed manufacturing Index fell 12 points to -20 in July, and well below estimates of -2.

Notable Points:

• Shipments fell to -18 from -5
• Expectations of Shipments rose to 11 from 6
• Backlogs declined to -30 from -18
• Employment fell to -16 from -6
• Prices Paid slowed to 5.65 from 6.1
• Prices Received also slowed to 3.16 from 3.57

Comments from Bessent

Secretary Bessent made several remarks this morning. He called for an internal investigation at the Fed as well as calling for “deeper reforms rooted in a long-term blueprint for innovation.” White House officials indicated they plan to visit the Fed HQ on Thursday. Interestingly, he said he sees no reason for Powell to step down right now. In addition, he reiterated calls for lower rates and stated he expects GDP growth to reach 3% or more in Q1’26.

He also made comments regarding tariffs, that reinforce the August 1^st deadline and hint at more trade deals within the next few days. Notably, he will meet with Chinese counterparts in Stockholm next Monday and Tuesday to further trade talks.

 

Fed Powell gave prepared remarks at the Integrated Review of the Capital Framework for Large Banks Conference in Washington, D.C. Due to “blackout period” restrictions ahead of next week’s FOMC meeting, he didn’t mention monetary policy.

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