Markets Mixed as Fed Holds Rates; Tech Resilient, Transports and Gold Stocks Tumble
The tech-heavy Nasdaq rose 31.38 points (0.2%) to 21,129.67, the S&P 500 edged down 7.96 points (0.1%) to 6,362.90 and the Dow fell 171.71 points (0.4%) to 44,461.28.
The major averages ended mixed after the Federal Reserve, in a divided vote, opted to keep interest rates steady at 4.25% to 4.50%. While the Fed cited its commitment to full employment and 2% inflation, Governors Bowman and Waller favored a rate cut. Fed Chair Jerome Powell emphasized that no decision has been made regarding a rate cut in September, stating it will depend on upcoming data.
Payroll processor ADP released a report showing private sector employment in the U.S. increased by more than expected in the month of July. The report said private sector employment jumped by 104,000 jobs in July after slipping by a revised 23,000 jobs in June. The Commerce Department too released a report showing the U.S. economy rebounded by more than expected in the second quarter of 2025. The report said real GDP surged by 3% in the second quarter after falling by 0.5% in the first quarter.
The rebound by real GDP in the second quarter primarily reflected a decrease in imports, which are a subtraction in the calculation of GDP and an increase in consumer spending, the Commerce Department said.
Most of the major sectors showed only modest moves, contributing to the lackluster performance by the broader markets. Transportation stocks substantial moved downwards, with the Dow Jones Transportation Average tumbling by 3%. Gold stocks was also significant weak , as reflected by the 2.9% slump by the NYSE Arca Gold Bugs Index. Energy and commercial real estate stocks too saw notable weakness on the day while semiconductor and brokerage stocks moved to the upside.
Asia-Pacific stocks turned in another mixed performance. Japan's Nikkei 225 Index edged down by 0.1% and Hong Kong's Hang Seng Index slumped by 1.4% while China's Shanghai Composite Index crept up by 0.2%. major European markets all moved modestly higher on the day while the German DAX Index rose by 0.2%, the French CAC 40 Index inched up by 0.1% and the U.K.'s FTSE 100 Index closed just above the unchanged line.
In the bond market, treasuries gave back ground after moving notably higher in the previous session. Subsequently, the yield on the benchmark ten-year note which moves opposite of its price, climbed 4.6 bps to 4.37%.
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Business Standard
5 hours ago
- Business Standard
US inflation likely to rise in July as higher tariffs drive up prices
By Vince Golle and Craig Stirling US consumers probably experienced a slight pickup in underlying inflation in July as retailers gradually raised prices on a variety of items subject to higher import duties. The core consumer price index, regarded as a measure of underlying inflation because it strips out volatile food and energy costs, rose 0.3 per cent in July, according to the median projection in a Bloomberg survey of economists. In June, core CPI edged up 0.2 per cent from the prior month. While that would be the biggest gain since the start of the year, Americans — at least those who drive — are finding some offset at the gas pump. Cheaper gasoline probably helped limit the overall CPI to a 0.2 per cent gain, the government's report on Tuesday is expected to show. Higher US tariffs have started to filter through to consumers in categories such as household furnishings and recreational goods. But a separate measure of core services inflation has so far remained tame. Still, many economists expect higher import duties to keep gradually feeding through. That's the dilemma for Federal Reserve officials who've kept interest rates unchanged this year in hopes of gaining clarity on whether tariffs will lead to sustained inflation. At the same time, the labor market — the other half of their dual policy mandate — is showing signs of losing momentum. As concerns build about the durability of the job market, many companies are exploring ways to limit the tariff pass-through to price-sensitive consumers. Economists expect government figures on Friday to show a solid gain in July retail sales as incentives helped fuel vehicle purchases and Amazon's Prime Day sale drew in online shoppers. What Bloomberg Economics Says: 'One reason firms are having trouble hiking prices is that households' real disposable income growth has been dismal — running at a third of the pandemic peak. Incorporating payroll revisions, we estimate that real income growth actually contracted in June. Yet nominal retail sales were likely robust in July. We caution against equating a strong headline print with resilient consumption.' —Anna Wong, Stuart Paul, Eliza Winger, Estelle Ou and Chris G. Collins, economists. Excluding auto dealers, economists have penciled in a more moderate advance. And when adjusted for price changes, the retail sales figures will likely underscore an uninspiring consumer spending environment. Among other economic data in the coming week, a Fed report is likely to show stagnant factory output as manufacturers contend with evolving tariffs policy. A preliminary trade truce between the US and China is set to expire on Tuesday, but a move to extend the detente is still possible. The Bank of Canada will release a summary of the deliberations that led it to hold its benchmark rate at 2.75 per cent for a third consecutive meeting; it also left the door open to more cuts if the economy weakens and inflation is contained. Home sales data for July will reveal whether sales gains continued for a third straight month. Elsewhere, several Chinese data releases, gross domestic product readings for the UK and Switzerland, and a possible rate cut in Australia are among the highlights. Asia Asia has a hectic data calendar, led by a wave of Chinese indicators, GDP reports from several economies, and a closely-watched rate decision in Australia. The week will see credit numbers from China, which will be assessed for signs that policymakers' efforts to revive economic growth are beginning to bear fruit. Money supply data will offer a complementary signal on underlying liquidity conditions. On Tuesday, the Reserve Bank of Australia is poised to lower policy rates for a third time this year after second-quarter inflation cooled further. A gauge of Australian business confidence due the same day will offer a timely read on sentiment heading into the second half. Wednesday brings Australia's wages data, followed by the employment report on Thursday. India reports CPI data on Tuesday, which will likely show prices cooled further in July from a year ago. Wholesale prices follow on Thursday, and will indicate whether cost pass-through remains muted. Trade figures during the week will show how strong India's external sector was before Trump imposed an additional 25 per cent tariff on Indian goods over its ongoing purchases of Russian energy, taking the total import levy to 50 per cent. On Wednesday, Thailand's central bank is expected to cut rates amid subdued price pressures and weak economic growth. The same day, New Zealand releases retail card spending data, South Korea publishes its unemployment rate for July, and Japan releases its producer price index — a gauge of wholesale inflation. China's big reveal comes on Friday, with a suite of July activity data including industrial production, retail sales, fixed asset investment, and jobless figures. Also on Friday, Japan publishes preliminary estimates of second-quarter GDP, with forecasts suggesting the country likely avoided a recession. Europe, Middle East, Africa The UK will take prominence again with some key data reports. Following Thursday's Bank of England rate cut, after which officials said they're on 'alert' for second-round effects from a spike in inflation, wage data will be released on Tuesday. Economists anticipate a slight slowdown in pay growth for private-sector workers. Meanwhile, second-quarter GDP is expected to show economic momentum slowing sharply after a growth spurt at the start of the year, meshing with the BOE's view that the economy has started to show more slack. Much of continental Europe will be on holiday on Friday, and data may be sparse too. Germany's ZEW index of investor sentiment comes on Tuesday. In the wider euro region, a second take of GDP, along with June industrial production, will be published on Thursday. In Switzerland, still reeling from Trump's imposition of a 39 per cent tariff, initial data on Friday may reveal that the economy suddenly contracted in the second quarter, even before that trade shock hit. Norwegian inflation is set for Monday. Three days later, the central bank in Oslo is likely to keep its rate at 4.25 per cent after its first post-pandemic cut in June surprised investors. Recent data included weaker retail sales, rising unemployment and gloomier industrial sentiment, though price pressures have also appeared to be stickier. Most economists expect two more quarter-point cuts in Norway this year, in September and December. Some monetary decisions are also due in Africa: On Tuesday, Kenya's central bank will probably adjust the key rate lower for a seventh straight time, from 9.75 per cent, with inflation expected to remain below the 5 per cent midpoint of its target range in the near term. Uganda's policymakers will probably leave their rate at 9.75 per cent to gauge the impact of US tariffs on inflation and keep local debt and swaps attractive to investors. On Wednesday, the Bank of Zambia may cut borrowing costs. Its real interest rate is the highest in six years, with the spread between the policy benchmark and the annual inflation rate at 1.5 percentage points in July after price growth eased. Namibia may also lower its rate, to 6.5 per cent from 6.75 per cent, in a bid to boost the economy. Inflation there is near the floor of its 3 per cent to 6 per cent target range. In Russia on Wednesday, analysts expect inflation to have fallen below 9 per cent in July from 9.4 per cent a month earlier. Turkish central bank Governor Fatih Karahan will present the latest 2025 inflation outlook at a quarterly meeting on Thursday. And finally, on Friday in Israel, inflation is expected to have eased to 3.1 per cent in July from 3.3 per cent a month earlier. Latin America Brazil's central bank gets the week rolling with its Focus survey of market expectations. Analysts have been slowly trimming their consumer price forecasts, but all estimates remain well above the 3 per cent target through the forecast horizon. Data on Tuesday should show that Brazilian consumer prices for July ticked down ever so slightly from June's 5.35 per cent print, substantiating the central bank's hawkish rate hold at 15 per cent on July 30. Chile's central bank on Wednesday publishes the minutes of its July 29 meeting, at which policymakers delivered their first cut of 2025, voting unanimously for a quarter-point reduction, to 4.75 per cent. The post-decision statement maintained guidance for more monetary easing in the coming quarters due to a weak labor market and slowing inflation. Also due on Wednesday is Argentina's July consumer prices report. Analysts surveyed by the central bank expect a slight uptick in the monthly reading from June's 1.6 per cent, with the year-on-year figure drifting lower from 39.4 per cent. Inflation in Peru's megacity capital of Lima has been below the 2 per cent midpoint of the central bank's target range all year, but the early consensus expects the central bank to keep its key rate unchanged at 4.5 per cent for a third straight meeting. Colombia is all but certain to have posted an eighth straight quarter of growth in the three months through June. The nation's central bank, which in June highlighted that the economy had gained momentum, is forecasting a 2.7 per cent rise in GDP this year and 2.9 per cent in 2026, up from 1.7 per cent in 2024.
Time of India
7 hours ago
- Time of India
Decoding US moves: Tariffs on India aren't about India
Until early August, the tariff sparring between Washington and New Delhi looked like another familiar round over soybeans. With China halting purchases and harvests approaching, it seemed like the US was looking for a buyer in India, as soybean farmers are a key MAGA base for Trump. Then, over just three days, the story shifted — from agriculture to a high-stakes game of geopolitics. On Aug 6, President Trump's negotiator, Steve Witkoff, met Russian president Vladimir Putin in St Petersburg for over three hours. Though billed as 'constructive', the talks yielded no major breakthrough. That same day, the White House announced an extra 25% tariff on Indian goods — lifting effective duties toward 50% — and framed the decision partly around New Delhi's continued intake of discounted Russian crude. In India, this was perceived as arm-twisting of its sovereignty, but a larger strategy was at play. The urgency in Washington comes from geopolitics as much as economics. The Ukraine war remains a key focus. In recent months, Russia has made incremental gains in Ukraine, giving it little reason to compromise. Official data showed a year-on-year rise in oil and gas revenues earlier this year, giving the Kremlin fiscal space to sustain the war. On another front, BRICS members are pushing for local-currency energy trade pilots. July's Rio summit saw Brazil and others call for 'economic sovereignty' from the dollar. If those systems take root, US sanctions will have less bite. It appears the White House wants to hit Russian revenues while the leverage window remains open. The domestic political calendar makes this even trickier. The midterms are barely a year away and while inflation has eased, it remains sensitive to fuel prices. Even a small Brent crude spike can quickly translate into higher gasoline costs, eroding consumer sentiment and complicating the Federal Reserve's path to cutting interest rates — a move the administration sees as vital to sustaining growth into 2025. A direct embargo on Russian oil would risk that spike, so Washington needs other channels. Since 2022, India has vaulted from a marginal buyer to Russia's largest swing customer, taking roughly 1-1.8m barrels of crude a day. Unlike private refiners tied to long-term contracts, India's state-owned refiners can quickly adjust their spot purchases when prices or risks change. If India reduces its spot purchases by 200,000 to 300,000 barrels a day, Russia may have to offer bigger discounts to other buyers, cutting its revenue by billions over a year. This would pinch Moscow's earnings and avoid a price surge that hurts American consumers. China, a larger buyer of Russian oil, has so far been spared to avoid disrupting US supply chains and ongoing tariff talks. Early signs suggest the tactic is having a marginal effect in India. One major state refiner recently reported a lower share of Russian crude as discounts narrowed. This is the kind of fine-tuning Washington is aiming for. For New Delhi, the irritation is real. It has watched Washington oscillate between warm words and hard edges — like this tariff move that risks raising Indian fuel costs while shielding US consumers. Yet this is also a moment to read beyond the headlines. Pakistan, despite entering this cycle with less leverage, has found its way into Trump's good books by using a cryptocurrency gambit and backing his bid for a Nobel Peace Prize. This has helped it carve out a tariff deal. India's own leverage is far greater: market size, strategic geography, technology and defence partnerships, and a pivotal role in energy flows. The smart play is to deploy that leverage to meet Trump's immediate need in exchange for wins of India's choosing. When both sides know they hold valuable cards, the game would be to trade them well, rather than escalate. This standoff is about much more than tariffs or a few oil shipments. For Washington, it is a test of whether it can squeeze Russia's war chest without spiking global fuel prices, hold China in check, and prevent the BRICS bloc from hardening into a true economic counterweight — all while keeping US inflation low enough for interest rates to fall. For New Delhi, it is about using its position as the swing buyer in the world's most strategic commodity to protect its autonomy, avoid an unnecessary rupture with America, and still extract tangible gains. The outcome will influence far more than trade flows. It will help decide who has the upper hand in setting oil prices, which currencies dominate energy trade, and whether the next global economic order tilts toward US-led systems or a more multipolar, BRICS-shaped architecture. How India and the US play this hand could echo for years in energy markets, currency systems, and the balance of global power. Facebook Twitter Linkedin Email Disclaimer Views expressed above are the author's own.
The Hindu
10 hours ago
- The Hindu
Shyam Sankar: Disruptor-in-chief
In Silicon Valley, where startups often burn bright and vanish fast, Palantir Technologies has defied the odds. Over the past year, the software company's stock has soared more than 600%, making it the best-performing AI name in the S&P 500 and one of the decade's biggest tech-success stories. On August 9, shares closed a record $186.96, pushing the company's market cap north of $443 billion. At the centre of this rise is Shyam Sankar, Palantir's Mumbai-born Chief Technology Officer. On July 25, his net worth crossed $1.3 billion as the company's stock soared. Raised in Orlando, Mr. Sankar earned a BS in electrical and computer engineering from Cornell University and an MS in management science and engineering from Stanford University. Known as a 'slayer of bureaucracy', he has spent over two decades building disruptive software and AI solutions for government and private clients. Mr. Sankar first learned about Palantir when a friend mentioned a small, stealthy, yet exciting software start-up looking for its first business hire in a largely technical role. The friend introduced him to one of the founders, and after seeing version 0.7 of the app, meeting a team of 'brilliant' people, and hearing about the company's mission, Mr. Sankar knew exactly where he wanted to be. Founded in 2003 by Peter Thiel — a crucial backer of Donald Trump's first presidential campaign — along with Alex Karp, Joe Lonsdale, and Stephen Cohen, the Silicon Valley unicorn was initially funded by In-Q-Tel, the CIA's venture capital arm. It built its early reputation serving the U.S. government, particularly national security agencies, with a founding vision of harnessing man–machine symbiosis to help American and allied intelligence communities share data securely and prevent another 9/11 without compromising civil liberties. Since joining Palantir in 2006 as its 13th employee, Mr. Sankar has pioneered the 'forward deployed engineer' model — embedding engineers directly with clients to tackle urgent, real-world challenges in real time. This approach was key to the success of Palantir's business model. Now headquartered in Denver, Palantir's platforms include Gotham, Foundry, and its Artificial Intelligence Platform (AIP). Its name, drawn from J.R.R. Tolkien's Lord of the Rings, refers to 'seeing stones' that reveal hidden truths. Inside the company, the unofficial motto — 'Save the Shire' — reflects its mission in plain terms: protect America from threats. Palantir's technology centralises and analyses large and disparate datasets, with applications ranging from tracking enemy drones for soldiers to monitoring ship parts for sailors, to assisting health officials in processing drug approvals. In 2020, it went public via a direct listing on the New York Stock Exchange. When the company's profile and operations expanded, so did Mr. Sankar's role. Leadership role In January 2023, he was made the CTO and executive vice-president. 'Under his leadership, Palantir transformed from a Silicon Valley start-up to a global, industry leading software and AI company,' reads Mr. Sankar's profile on his Substack page. Today, Palantir counts more than 30 U.S. federal agencies and a group of Fortune 500 companies as clients. In the second quarter of 2025, it posted $1 billion in revenue — up 48% from a year earlier — beating Wall Street forecasts. In the first half of 2025, it pulled in more than $322 million from federal contracts, a 12% increase from two years earlier. The U.S. Army, once an adversary in a contracting dispute, has become one of its biggest customers. In June, Mr. Sankar himself was commissioned into the Army Reserve, a symbolic move that underscored Palantir's alignment with military priorities. Some Pentagon officials have voiced concern about over-reliance on a single contractor for core data-processing needs. Palantir's reputation as a rapid-response problem solver was cemented during crises. At the height of the COVID-19 pandemic, it built systems to track the virus and vaccine distribution. After Russia's invasion of Ukraine, Palantir's technology got integrated into multiple Ukrainian government and military agencies. Similarly, days after the Hamas-led attack on Israel in October 2023, Mr. Karp — who is Jewish — flew with senior executives to Tel Aviv. Following a January 10 meeting with Israel's Defence Ministry officials, Palantir entered a strategic partnership with Israel to provide technology to aid its war efforts. The move drew criticism from pro-Palestinian activists in the U.S. At home, Palantir drew flak for a government contract to build an app that integrates data from across the government to assist with immigration enforcement. With debates still simmering, Palantir is looking beyond U.S. borders. It is pursuing lucrative contracts in Saudi Arabia, from overhauling the country's healthcare system to helping build Neom, a futuristic megacity in the desert that has collided with practical and financial challenges. But for Mr. Sankar and Mr. Karp, controversies are part of Palantir's DNA. Regarding working with different government agencies on data processing and other projects, Mr. Sankar once said, it's like 'shining a light on the battle space'. 'The things that you couldn't see before, you could see now...'
