Morning Brief: Disappointing Non‑Farm Payrolls Douse Rate‑Hike Expectations; S&P 500 & Dow Hit Fresh Closing Highs

Core Snapshot

📊 U.S. July Non‑Farm Payrolls unexpectedly fell by 23,000, well below consensus forecasts, sharply cooling market bets for a September rate hike.

📈 Major U.S. equities rebounded. S&P 500 rose 0.62% to 7757.64, Dow Jones added 0.28% to 54036.93, both notched new closing all‑time highs; Nasdaq gained 1.30%.

🕊️ Iran stated it is close to a deal with Oman to reopen the Strait of Hormuz, conditional on additional U.S. concessions.

I. Market Outlook

Key Events

- 📊 Disappointing Non‑Farm Payrolls: U.S. July Non‑Farm Payrolls dropped by 23,000, versus an expected +80,000, marking the weakest reading this year. Prior‑month figures were heavily revised lower while the unemployment rate edged down to 4.1%. 10‑year U.S. Treasury yield fell 1.44 bps to 4.656%; DXY slipped 0.35% to 99.61; September rate‑hike expectations receded markedly.

Exclusive View

The payroll print came in below every economist’s forecast range, representing one of the largest employment misses since 2025. Rate‑hike expectations built up by Fed hawks were repriced in a single session. New closing highs across major indices show markets are now pricing “no September hike” as the base‑case scenario.

II. Overnight Market Performance

— US Equities: Dow Jones +0.28% at 54036.93 (fresh closing high); S&P 500 +0.62% at 7757.64 (fresh closing high); Nasdaq +1.30% at 26690.62. All three benchmarks posted their largest weekly gains in more than three months.

— European Equities: STOXX 600 +0.3% to 660.25, new all‑time high, four straight weekly advances. DAX +0.69%, CAC 40 +0.17%, FTSE 100 +0.31%.

— Fixed Income: 10‑year U.S. Treasury yield -1.44 bps to 4.656%; 2‑year yield -4.35 bps to 4.202%; 2‑10‑year yield curve steepened to 46 bps.

— Commodities: WTI Sep crude +1.15% to 78.18 USD/bbl, weekly loss 7.66%. Brent crude +1.28% to 83.55 USD/bbl, weekly loss 4.98%. Spot gold +2.37% to 4339.75 USD/oz, weekly gain 7.27%. Silver +3.11% to 63.4555 USD/oz, weekly gain 10.29%.

— FX: DXY -0.35% to 99.61, two consecutive weekly declines. USD/JPY -0.40% to 157.78; EUR/USD +0.30% to 1.1558.

— Crypto: BTC at 64888 USD; ETH +0.5% to 1914 USD.

III. Macro News

1. 🕊️ Iran close to Oman‑brokered Strait of Hormuz reopening deal, requires U.S. pre‑conditions

Iran said Sunday negotiations with Oman over new navigation rules for the Strait of Hormuz are in final stages, yet reopening remains subject to Washington meeting further demands.

Insight: A framework is in place but U.S. concessions are still needed. Oil prices have already priced in partial reopening hopes with weekly falls of 5‑8%. Further downside remains possible if the agreement materialises.

2. 📊 U.S. July Non‑Farm Payrolls unexpectedly contract, far weaker than estimates

Payrolls fell by 23,000 against consensus +80,000, the worst reading this year alongside sharp downward revisions to prior months. Unemployment rate dipped to 4.1%, creating conflicting signals.

Insight: Lower unemployment alongside fewer jobs points to shrinking labour‑force participation rather than robust hiring. The labour market is cooling amid supply‑side contraction. Market pricing for a September rate hike has retreated sharply.

3. 💴 Japan’s finance minister: FX intervention stands ready if needed

Satsuki Katayama stated Japan and the U.S. will not hesitate to intervene in currency markets should conditions warrant.

Insight: The post‑payroll dollar pullback has eased near‑term pressure on JPY. Wide US‑Japan yield differentials persist, questioning how durable verbal intervention will prove.

IV. Corporate News

1. 📱 Apple tests ChangXin Memory chips for iPhones and MacBooks to ease component shortages

Apple is trialling DRAM chips from ChangXin Memory Technologies across iPhone and MacBook lines to mitigate supply strains driven by AI‑driven component demand. Successful qualification would add a key new supplier to Apple’s DRAM chain.

2. 💰 SK Hynix proposes USD 71bn shareholder return plan, 40% allocated to share buybacks

The sizeable programme underscores the memory chip giant’s confidence in its cash‑flow outlook.

3. 📈 Berkshire Hathaway Q2 net profit doubles; quarterly buybacks hit five‑year high

Alphabet enters Berkshire’s top‑five holdings as Buffett continues adjusting tech‑stock exposure.

V. Today’s Focus

No major economic releases scheduled. Markets will monitor developments on the Strait of Hormuz negotiation and broader Middle‑East geopolitics.