Today's stories that matter
A busy data week kicks off with the Fed’s rate decision, PCE and payrolls all due in three days. Trade deals ease policy risks, Treasury yields hover near decade highs, and stocks hit fresh records on strong earnings and spending.
📅 Packed economic calendar ahead
Investors face a wall of key releases: the Federal Reserve’s July 29–30 rate decision, June’s PCE inflation report (the Fed’s preferred gauge) on July 30, and July non‑farm payrolls on July 31. All three arrive within 72 hours, leaving markets braced for volatility.
These are the Fed’s own data points on inflation and labor. Cooler inflation or weaker job growth could prompt markets to price in rate cuts for later this year—while hotter readings reinforce a steady policy stance.
📊 Fed set to maintain rates amid mixed data
The Federal Reserve is widely expected to keep its benchmark funds rate at 4.25%–4.50% at its July 29–30 meeting. Inflation has ticked up to 3.5% y/y under tariff pressures, while uneven employment and soft housing have divided policymakers. A handful of governors may dissent for a cut, but Chair Powell and most colleagues favor patience until clearer signals emerge.
Holding rates steady supports bond valuations but keeps borrowing costs elevated for businesses and households. Any dissent vote or hawkish/dovish guidance could spur market swings, making Fed communications critical for portfolio positioning.
🌐 EU–US tariff deal and China truce extension
The US and EU agreed to cap most tariffs at 15%, averting threatened levies up to 30% on key exports and safeguarding roughly a third of global trade flows. This mirrors June’s deal with Japan and locks in over $1.25 trillion of trade and investment ties. Meanwhile, Treasury Secretary Scott Bessent and China’s Vice Premier He Lifeng meet July 28–29 in Stockholm to extend their August 12 tariff pause by 90 days, aiming to avoid a snap‑back to triple‑digit duties.
Capping tariffs at 15% removes a major overhang for exporters and importers, clarifying cost forecasts and underpinning corporate earnings. Rolling over the China truce dials down supply‑chain shock risks and soothes commodity volatility, letting markets refocus on fundamentals.
🏠 Small investors now buy one‑quarter of U.S. single‑family homes
With individual homebuyers sidelined by high prices and mortgage rates, small investors—those owning fewer than 100 properties—now account for roughly 25% of U.S. single‑family home purchases, up from under 15% a year ago. Builders in key markets like Texas and Florida have offered discounts and incentives on excess inventory, drawing cash‑ready investors who renovate and rent for income.
This surge in investor demand shrinks the supply available to traditional buyers—especially first‑time purchasers—and may push home prices and rents higher, worsening affordability. For holders of REITs and housing‑related equities, the trend suggests potential upside, but it also highlights a bifurcated market where policy shifts (e.g., tax incentives or rate cuts) could quickly reverse fortunes.
🚀 Weekly stock highs on earnings and easing tensions
Last week, the S&P 500 notched a record close—its E‑mini futures jumped 0.29%—while Nasdaq 100 futures climbed 0.48%. Strong “Magnificent Seven” earnings, robust retail results, and cooling trade rhetoric powered eight record closes in nine sessions.
Record highs signal healthy corporate profits and calmer geopolitical risk, boosting investor confidence. Yet with US equities trading about 30% above decade averages, some funds are rotating into defensive sectors to guard against a potential valuation‑driven pullback.