Perspective: Morning Commentary for July 31

By: Arlan Suderman, Chief Commodities Economist

Thu, 31 Jul 2025, 13:26

Today's Perspective Video: Just How Big - or How Small - Are This Year's Crops?

July 31 – Tech stock futures hit fresh record highs overnight, with the S&P close on its heals, on trade deal optimism as more deals are announced ahead of tomorrow’s implementation of reciprocal tariffs, recovering from yesterday afternoon’s stock weakness after Federal Reserve Chair Jerome Powell poured cold water on rate cut hopes. This morning’s job and inflation data overall was also seen as positive, reflecting an economy that continues to be resilient, despite the turmoil of the tariff war. The VIX is trading near 15 this morning, while the dollar index trades near 99.9, which is close to the new five-week highs set after the Fed meeting ended on Wednesday. Yields on 10-year Treasuries are trading near 4.36%, while yields on 2-year Treasuries are trading near 3.94%. Crude oil prices pulled back modestly, while the grain and oilseed sector was mostly weaker overnight.

First-time claims for unemployment benefits totaled 218K in the week ending July 26, essentially matching last week’s 217K level, while falling short of analyst expectations that claims would rise to 225K during the week. The four-week moving average fell to 221K, down from 224.5K the previous week. Continuing claims for the week ending July 19 were unchanged from the previous week’s revised level at 1.946 million. The four-week moving average for continuing claims fell by 2,500 to 1.949 million. Initial claims for unemployment benefits filed by former Federal civilian employees in the week ending July 19 totaled 722, down 67 from the previous week. Continuing claims by the same for the week ending July 12 totaled 7,407, up 181 from the previous week.

Personal income rose 0.3% on the month in June, reversing 0.4% contraction seen in May, and above analyst expectations of 0.2% growth. Personal consumption expenditures rose 0.3% on the month in June, recovering from being flat at 0.0% in May, but falling short of analyst expectations of 0.4% growth. The PCE price index rose 0.3% on the month in June as expected, which was up from 0.1% in May as inflation pressures started to gain a little momentum. Yet, the PCE price index was up 2.3% year-on-year in June, which fell short of the upwardly revised 2.4% posted for May, and it fell below the 2.5% expected by analysts. The core PCE price index that excludes the more volatile food and energy sectors rose 0.3% on the month in June, as expected, which was up from 0.2% in May. The core PCE price index rose 2.4% year-on-year in June, down from an upwardly revised 2.8% in May, and below analyst expectations of 2.7%. The bottom line is that consumer income improved in June. Consumer spending also rebounded, although a bit more cautiously than analysts expected, helping to contain inflation below levels that were anticipated. Today’s inflation data suggests that inflation, while still above the Fed’s 2% mandate, is not rising to levels feared by the consumer or by the Federal Reserve, as a result of President Trump’s tariffs.

The employment cost index rose 0.9% in the second quarter of this year, versus the previous quarter, matching the previous quarter’s pace, but exceeding analyst expectations of 0.8% growth in wage inflation. The employment cost index rose 3.6% year-on-year in the second quarter of the year, which again was consistent with the previous quarter’s wage inflation pace. The Challenger Job-Cut Report indicated that firms gave notice of potential job reductions of 62,075 employees in July, up from 47,999 in June. The report doesn’t indicate whether the reductions will come from layoffs or attritions.

The feud between President Donald Trump and Fed Chair Jerome Powell continues. No rate cut was expected on Wednesday, and no rate cut was done. So the markets focused on statements by Powell at his press conference. Trump has been pressuring Powell to cut rates, and he has remained steadfast in not doing so, with the unanimous backing of other Fed members, until yesterday. Both Michelle Bowman and Christopher Waller cast dissenting votes to the Fed policy, with both seeking to cut rates now rather than to wait. It was the first time that the Fed has had double dissenting votes since December 1993 – something not missed by the markets. This suggests that some dissention has started in the ranks of the Federal Open Market Committee. It’s noteworthy that Waller has been mentioned as a possible Trump nominee to replace Powell at the end of his term next May. Waller has publicly stated that rates should come down. As for his part, Powell tried to stay neutral in his comments, but he ended up casting a hawkish tone in the press conference, leading the market to back down from its expectations of two rate cuts this year. The markets now expect the first rate cut in October, and it’s a toss up whether there will be a second one before the end of the year at this point. Powell acknowledged that the impact of the tariffs on inflation will likely be a one-off thing, but he put more emphasis on the job market, noting signs of softening. It seems that he needs data to justify a rate cut at this point so that it doesn’t look like he’s giving in to Trump, and he seems to have chosen the jobs data as his indicator that he hopes will give him that data signal he desires. Otherwise, no cut will likely occur. There will be two more job reports ahead of the next meeting to potentially give him the data that he wants.

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Perspective: Morning Commentary for August 4

August 4 – The benchmark Dow Jones Industrial Average surged into the close yesterday to finish almost 700 points higher, at a record close of 53,178 points – easily clearing the previous top from almost a month ago. The S&P 500 is on the brink of its own record as well, while the NASDAQ index is short of June highs but working on a strong three-session rally. All three are pointing to positive openings today. Palantir (a U.S. software company) reported better-than-expected earnings yesterday afternoon post-close to boost the tech sector, though a host of other firms reported strong earnings as well. The ten-year note continues to retreat from Friday’s high, now at 4.67%, with the dollar on the high side of level-par, while the VIX index now under 16 shows reduced volatility.

Matt ZellerTue, 04 Aug 2026, 12:43

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Perspective: Morning Commentary for August 3

August 3 – Equities futures are pointing higher to open the week and month, still in range of recent record highs and flush with optimism that the U.S. and others will start to negotiate with Iran over the Strait of Hormuz. A busy week is on tap with earnings reports and jobs data, among other economic releases. Crude oil is down over $5 per barrel and nearing in on three-week lows. The dollar is only slightly lower this morning but at its own month-and-a half low, while the U.S. ten-year note is also slightly on the low side at 4.68. The VIX index is rebounding a bit today after a sharp slide into the end of last week, just above 16.

Matt ZellerMon, 03 Aug 2026, 12:45

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Perspective: Mid-Day Commentary for July 31

July 31 – Stocks are clinging to modest gains at midday, with largely better than expected U.S. economic data today providing some optimism to end the week. The VIX briefly spiked to 18.7 earlier in the session but has since settled back to 17.15 at midday. The dollar has given back some of its gains on the day, now only modestly in the green, up roughly 0.1% to trade near 100.06 at the time of writing. Treasury action has been mixed thus far today, but yields remain notably elevated, with 30-year yields trading just below their 19-year high at 5.267%, 10-year yields just off their one-and-a-half-year high at 4.74%, and 2-year yields right at 4.30%. Crude oil remains quietly higher, with nearby WTI up 0.9% on the day near $84.70 and nearby Brent up 0.7% to trade near $87.40. The grains and oilseeds are widely lower at midday, with the wheat complex leading the way down, while the livestock sector is largely in the green.

Mike CastleFri, 31 Jul 2026, 16:33

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