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Global Stocks Edge Higher as Soft U.S. Data Diminish Fed Rate-Hike Bets

By
Samuel Nwite
-
0

Global stocks edged higher on Monday while the dollar fell to its lowest level since June as a run of weaker-than-expected U.S. economic data reduced expectations that the Federal Reserve will raise interest rates at its next meeting.

The shift in rate expectations provided fresh support for technology shares, with Nasdaq futures outperforming broader U.S. equity futures. Investors were also digesting the latest corporate earnings and assessing whether resilient profits can sustain the stock market’s rally even as economic momentum shows signs of cooling.

S&P 500 futures were up about 0.1%, while Nasdaq 100 futures gained 0.5%. Dow Jones Industrial Average futures fell 88 points, or 0.2%.

The moves followed a third consecutive weekly advance for the S&P 500, which reached a record closing high last week after a strong earnings season improved investor sentiment.

European equities were also slightly higher. The STOXX 600 gained 0.04%, led by resource stocks as gold prices advanced.

The latest economic data have shifted the focus back toward monetary policy. U.S. retail sales unexpectedly declined in July, marking their first monthly drop in nine months, while a relatively mild inflation reading and weaker consumer sentiment added to evidence that economic activity may be losing some momentum.

Markets now see only about a 30% probability of a Federal Reserve rate hike next month, according to CME Group’s FedWatch tool, down from roughly 50% a week earlier.

That repricing has been particularly supportive for technology stocks, whose valuations are sensitive to interest-rate expectations because lower yields reduce the discount applied to future earnings.

“You’ve had the shift in interest rate expectations which feeds into some of those tech names,” Rory McPherson, chief market strategist at Wren Sterling, told CNBC’s “Squawk Box Europe.”

“I think that helps explain some of that big rally we’ve had recently in tech after quite a quiet July where we had all those strong earnings but really tech didn’t do very much,” he said.

Chip stocks received an additional boost after Bloomberg reported that Anthropic’s second-quarter revenue exceeded $11.5 billion, highlighting the rapid expansion of spending on artificial intelligence infrastructure.

Micron Technology rose more than 3% in premarket trading, while Intel and Broadcom each gained about 1%.

The AI trade has been a major driver of equity markets this year, although investors have been questioning whether the pace of spending and valuations surrounding the sector can be sustained. Strong revenue growth at AI companies is providing fresh evidence of demand for the computing infrastructure needed to train and operate sophisticated models.

Fed Minutes in Focus

Investors are now turning their attention to Wednesday’s release of the minutes from the Federal Reserve’s July meeting for clues about the debate over the direction of interest rates.

The Fed voted 9-3 on July 29 to leave its benchmark rate unchanged at 3.50% to 3.75% for a fifth consecutive meeting.

The three dissenters, Cleveland Fed President Beth Hammack, Minneapolis Fed President Neel Kashkari and Dallas Fed President Lorie Logan, favored a 25-basis-point rate increase.

That split means the July minutes could provide important insight into how policymakers assess the balance between inflation risks and signs of weakening economic activity.

The market’s latest shift toward lower rate expectations has already pushed Treasury yields lower at the short end of the curve.

The two-year Treasury yield fell about 2 basis points to 4.154% on Monday after declining 3 basis points last week and touching a seven-week low of 4.0977%.

The 10-year yield slipped to 4.688% after rising 4 basis points last week.

The combination of lower short-term yields and reduced expectations for a Fed hike has weighed on the dollar.

The euro climbed to a two-month high of $1.1595, while the Australian and New Zealand dollars reached 10-week highs of $0.7105 and $0.5910, respectively.

Oil Remains Elevated As Middle East Risks Persist

Oil prices remained volatile as investors continued to assess the impact of the conflict involving Iran and the disruption to energy flows through the Middle East.

Brent crude rose about 1% to $89.42 a barrel after gaining 6% last week. U.S. crude was up 0.55%, having climbed 5.4% during the previous week.

Iran on Saturday called on the United States to accept defeat, while President Donald Trump urged Americans to accept higher gasoline prices while the conflict continues.

The wider regional risks were also evident in southern Lebanon, where at least 11 people were killed in Israeli strikes on Saturday, according to Lebanon’s health ministry. The strikes came weeks after Lebanon agreed to a U.S.-mediated peace framework with Israel.

Shane Oliver, chief economist at AMP, said the lack of a resolution to the Iran-Hormuz standoff leaves oil markets vulnerable to further disruption.

“While there is still no resolution to the Iran/Hormuz impasse, our base case remains that oil prices will stay in a $70-$100 range with Iran preventing it going lower and the U.S. moving to try and calm things down whenever it gets above $100,” Oliver said in a note.

He warned that the risk remains that there will be no sustainable peace deal and that oil flows from the Middle East could remain 10% to 15% below normal levels. That creates a potential complication for central banks. Higher energy prices can feed into inflation even as weaker consumer demand puts downward pressure on broader price growth.

Markets Await Evidence on U.S. Consumers

The economic calendar is relatively light this week, but investors will receive several indicators that could help determine whether the recent slowdown is temporary or becoming more entrenched.

The August Empire State manufacturing index and NAHB Housing Market Index are due, while the August purchasing managers’ indexes will offer a broader view of business activity.

Corporate earnings will also provide an important test of consumer resilience. Home Depot and Lowe’s report during the week, followed by Walmart on Thursday, with investors looking for signs that households are becoming more cautious as borrowing costs and living expenses remain elevated.

Against that backdrop, the central question for markets is becoming clearer: Can the U.S. economy slow enough to give the Fed room to ease policy without weakening corporate earnings and economic growth enough to undermine the stock-market rally?

So far, investors appear to be betting that the answer is yes.

The S&P 500’s record high, falling Treasury yields and weaker dollar indicate that markets are treating the latest soft economic data primarily as a reason for less restrictive monetary policy rather than as a warning of an imminent recession.

That balance remains fragile. Some analysts believe that a further deterioration in consumer spending could eventually weigh on corporate earnings, while a renewed rise in oil prices could complicate the Fed’s inflation outlook.

China’s Economy Loses Momentum as Weak Consumption, Investment Raise Pressure for More Stimulus

By
Samuel Nwite
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0

China’s economy lost momentum at the start of the second half of the year, with industrial production and retail sales slowing sharply in July as weak domestic demand and severe weather disruptions added to pressure on policymakers to step up support.

The latest figures reveal a difficult start to the third quarter after economic growth in the second quarter slowed to its weakest pace in three and a half years. China’s continued reliance on exports to sustain activity is becoming increasingly important as household consumption and investment remain subdued, while U.S. tariffs and geopolitical tensions create additional risks.

Industrial output increased 4.5% in July from a year earlier, slowing from 5.3% in June and falling short of the 4.8% growth economists had expected, according to data released Monday by the National Bureau of Statistics.

Fixed-asset investment provided an even stronger indication of the weakness in domestic activity. Investment contracted 6.7% during the first seven months of 2026, compared with expectations for a 6% decline and a 5.7% contraction in the first six months.

“The poor performance is due in part to ineffective use of the policy measures in hand. Fiscal spending has lagged behind, for example,” said Xu Tianchen, senior economist at the Economist Intelligence Unit.

“It’s a call for officials to be bolder about spending what they have,” he said, adding that policymakers needed to pay particular attention to investment because its sharp decline was “by no means acceptable to Beijing.”

The weakness in investment puts additional pressure on Beijing to increase fiscal support. Fu Linghui, an NBS spokesperson, said officials would step up counter-cyclical policy adjustments to strengthen domestic demand.

The bigger challenge is generating stronger household spending.

Retail sales increased just 0.6% in July from a year earlier, down from 1% growth in June and well below the 1.5% expansion economists had forecast. The slowdown came even during the summer holiday period, when tourism typically provides additional support to consumer spending.

Julian Evans-Pritchard, head of China economics at Capital Economics, attributed part of the weakness to the fading impact of government trade-in subsidies. The consumer-goods trade-in programme had boosted sales a year earlier by bringing forward demand, he said, meaning some of the current slowdown represents a difficult comparison with the previous year.

Citi analysts also found that the pace of subsidy distribution weakened in July. Daily average sales fell to 6.3 billion yuan, or about $934.8 million, from 9 billion yuan in June.

The property market remains another major obstacle to a consumer recovery.

New home prices fell 3.2% in July from a year earlier and declined 0.1% from June, extending pressure on a sector that has been a major source of weakness in China’s economy.

Housing is particularly important for household finances because economists estimate that about 52% of household wealth remains tied to real estate. That share has declined in recent years as the prolonged property downturn has encouraged households to diversify into assets such as gold.

With property values under pressure, households may be more reluctant to increase spending, limiting the effectiveness of policies designed to stimulate consumption.

Weather disruptions added another temporary but significant drag to economic activity in July.

Three typhoons made landfall during the month, forcing millions of people to relocate across manufacturing centers in eastern and southern China. The disruptions affected factories and retail activity at a time when the economy was already showing signs of losing momentum.

The automotive sector provides another example of the divergence between domestic weakness and external demand. Vehicle sales declined for a 10th consecutive month in July, although the pace of contraction eased.

Chinese automakers are increasingly looking overseas to compensate for weaker demand at home, intensifying their international expansion as domestic competition remains fierce.

Other indicators have also pointed to a soft start to the third quarter. China’s official manufacturing purchasing managers’ index unexpectedly slipped into contraction, while both export and import growth moderated from June, although both remained in double-digit territory.

Exports remain one of the economy’s strongest areas.

Chinese manufacturers have benefited from robust global demand for products linked to the artificial intelligence infrastructure boom, helping factories maintain production even as domestic consumption remains weak. China recorded another monthly trade surplus of more than $100 billion in July. The country’s full-year surplus is on course to exceed $1 trillion for a second consecutive year.

That export strength is increasingly creating tensions with trading partners.

The European Union is considering tougher measures to address its trade deficit with China, while the United States has announced additional tariffs on Chinese goods. Greater reliance on exports could therefore leave China’s economy more exposed to protectionist measures just as policymakers are attempting to compensate for weak domestic demand.

The combination creates a difficult policy equation for Beijing. Strong exports are supporting industrial activity, but a large trade surplus is increasing pressure from major trading partners. At the same time, domestic consumption and investment remain too weak to provide a reliable alternative engine of growth.

Chinese policymakers have pledged to accelerate fiscal spending and introduce new measures “in a timely manner,” but they have so far stopped short of announcing a major new stimulus package.

The latest figures could increase pressure for a more forceful response, particularly on investment and household consumption.

According to Reuters, Yuhan Zhang, principal economist at The Conference Board’s China Center, described the economy as showing “selective strength amid broad softness.”

“The question is, therefore, not simply whether China can sustain growth, but whether policy-supported pockets of activity can eventually generate a broader recovery in household spending and private investment,” Zhang said.

Fu remained confident that the recent weather disruptions would not derail Beijing’s target of keeping the roughly $20 trillion economy growing between 4.5% and 5%, saying the underlying foundation remained solid.

The July data, however, highlight the growing gap between China’s externally supported industrial economy and its weaker domestic economy. Manufacturing and exports continue to benefit from global demand, particularly from AI-related infrastructure spending, while households remain cautious and private investment is contracting.

That imbalance could become more difficult to sustain. If export growth weakens because of tariffs or slower global demand, China would have fewer sources of momentum to offset weak consumption and investment.

The immediate policy challenge for Beijing is therefore not simply maintaining headline growth. It is creating the conditions for households and private businesses to spend and invest again, reducing the economy’s dependence on exports and government-supported activity. Until that shift takes place, analysts believe China’s economy may continue to show pockets of strong industrial performance alongside a broader domestic recovery that remains elusive.

SafePal Data Breach Exposes Nearly 40,000 Customers as Crypto Industry’s Security Problem Persists

By
Samuel Nwite
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0

Cryptocurrency wallet provider SafePal has disclosed a data breach affecting nearly 40,000 customers, highlighting a persistent weakness in the digital asset industry: even after years of investment in cybersecurity and sophisticated security infrastructure, hacks, data leaks, and other breaches remain a problem that the crypto sector has struggled to eliminate.

SafePal said on Sunday that an authorization flaw in its order-tracking system allowed unauthorized users to access information belonging to other customers between March 2, 2025, and April 11, 2026.

About 39,798 customers were affected. The exposed information included names, addresses, and purchase data, according to the company.

SafePal said the incident did not compromise seed phrases, private keys or wallet passwords. Bank account details, payment card information and government-issued identification numbers were also not exposed.

That means the breach did not give attackers direct access to the cryptocurrency stored in affected wallets. However, the stolen information can still be valuable to criminals because it provides material that can be used to build convincing phishing and impersonation attacks against crypto users.

A Different Kind of Crypto Security Threat

The SafePal incident illustrates how the security risks facing cryptocurrency users have expanded beyond attempts to directly steal private keys or drain wallets.

An attacker who knows a customer’s name, physical address, and purchase history can make a fraudulent message appear legitimate. A criminal could, for example, impersonate SafePal and claim that a customer’s hardware wallet requires an urgent security update, replacement, or verification.

The objective would ultimately be to persuade the victim to surrender information that was not compromised in the original breach, such as a seed phrase or private key, or to transfer cryptocurrency to an address controlled by the attacker.

SafePal said it had identified and removed more than 30 fraudulent websites and phishing links connected to the breach, suggesting that criminals were already attempting to exploit the exposed information. The company has fixed the authorization flaw and introduced additional security measures. It also said it will retain customers’ personal information in its order-processing system for only 90 days.

Crypto’s Security Problem Has Refused To Go Away

The incident also underscores a broader problem that has followed the cryptocurrency industry for years.

From exchanges and decentralized finance protocols to wallet providers and blockchain bridges, the crypto sector has repeatedly faced hacks, exploits, phishing campaigns, and data breaches. The technology has matured considerably, but the security problem has not disappeared.

Part of the challenge is that cryptocurrency combines valuable digital assets with infrastructure that is accessible around the clock and, in many cases, irreversible once a transaction is authorized. A successful attack can therefore have consequences that are difficult to undo.

The industry has also developed a large ecosystem of intermediaries and supporting services. A user may keep cryptocurrency in a hardware wallet but still provide personal information to a company when buying the device, registering an account, or obtaining customer support.

That creates additional points of exposure.

SafePal’s breach is particularly instructive because the attackers did not need access to the cryptographic credentials protecting users’ assets. A weakness in an ordinary order-management system was enough to expose information that could potentially be used to attack customers through other means.

The incident reinforces an important distinction in crypto security: protecting the blockchain credentials themselves is only one part of protecting digital assets.

Seed phrases and private keys remain the most critical credentials because control of them can effectively mean control of the associated cryptocurrency. But personal information can provide attackers with the starting point for social-engineering attacks designed to obtain those credentials.

That makes databases containing customer names, addresses, and transaction histories potentially valuable targets even when they do not contain private keys. For SafePal customers, the immediate danger is therefore likely to be fraudulent communications that appear to come from the company.

Data Minimization Becomes A Security Issue

SafePal’s decision to reduce the retention period for customer information to 90 days also points to a broader lesson for crypto companies.

The longer sensitive customer information remains in a database, the longer it can potentially be exposed if that database is compromised. Limiting the amount of information collected and reducing how long it is retained can reduce the potential damage from future incidents.

The change is especially relevant for companies operating in the cryptocurrency sector, where users can face both conventional identity theft and attempts to steal digital assets.

SafePal provides hardware wallets as well as mobile and browser-based tools for managing cryptocurrencies. The company has emphasized that the latest incident did not expose the credentials needed to directly access customers’ wallets.

Still, the breach shows that security failures do not have to reach the blockchain itself to create meaningful risks for crypto users.

AI Investment Explodes as Top 1% of US Firms Spend $7,400 Per Employee – Report

By
Ojukwu Emmanuel
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0

Artificial intelligence is rapidly becoming one of the biggest areas of corporate investment in the United States, with spending reaching unprecedented levels among the country’s biggest AI adopters.

A new report by Ramp’s latest AI Index, shows that the top 1% of U.S. firms spent a median of $7,400 per employee per month on AI tools and infrastructure in July 2026. That figure is more than 600 times higher than the median company’s outlay of roughly $12 per employee.

This highlights just how aggressively businesses are deploying the technology to gain a competitive edge. The gap underscores a deepening divide in corporate AI adoption. Firms in the top 10% spent about $650 per employee per month, still a fraction of what the leading cohort invests.

These expenditures cover large language model subscriptions, coding agents, API tokens, and GPU cloud computing. Ramp draws the data from anonymized transaction records of tens of thousands of US businesses that use its corporate card and expense platform.

The acceleration has been rapid. In early 2024, reports revealed that the top 1% was spending less than $1,000 per employee per month. Spending has more than tripled across the distribution in recent months, yet the bulk of the growth remains concentrated at the high end.

Much of the spending is being led by the largest technology companies, particularly Microsoft, Amazon, Alphabet, Meta and Oracle. Analysts describe the pattern as “whales-first,” in which a small number of aggressive adopters account for most of the overall increase in AI expenditure.

These companies are directing enormous amounts of capital toward the physical infrastructure required to develop and operate increasingly sophisticated AI systems. Their investments include massive data centers, AI accelerators, networking equipment, electricity infrastructure, and cloud-computing capacity.

In 2026, the investment boom has moved well beyond experimentation. Goldman Sachs estimates that AI-related investment in the United States could reach about $600 billion this year, equivalent to roughly 2% of U.S. GDP and 10% of business fixed investment.

This spending suggests that the AI race is moving beyond the question of whether employees have access to AI. Companies are increasingly competing over how deeply AI can be embedded into employees’ daily work.

Some businesses are using AI to help employees write documents, analyze information, generate software, conduct research, and communicate with customers. Others are deploying AI agents capable of performing multiple steps in a workflow with considerably less human intervention.

The trend is also visible among major financial institutions. Citi, for example, has trained about 4,000 employees as AI stewards and has reported that nearly 90% of its workforce uses AI tools.

JPMorgan has deployed its proprietary generative AI platform to more than 200,000 employees, while Wells Fargo has introduced AI tools designed to increase the productivity of financial advisers.

The deployment of capital is not limited to employee spending. Companies are also redirecting existing resources toward AI development. Businesses are reallocating portions of their software and labor budgets to fund AI initiatives, while hiring or acquiring specialized talent in areas such as machine learning, data science, semiconductor engineering, and AI research.

However, the disparity in spending by top companies, raises questions about competitive dynamics. Companies that can sustain multi-thousand-dollar monthly AI costs per worker are building capabilities far beyond those of firms that treat AI as a modest software expense.

Whether this polarization continues or begins to narrow will shape how widely the productivity gains from AI spread across the American economy in the years ahead.

Outlook

Looking ahead, AI spending by U.S. companies is likely to continue rising as businesses move from experimentation to deeper integration of AI into their core operations.

The most aggressive adopters are expected to increase spending on AI agents, advanced models, computing infrastructure, and specialized software as they seek to automate more complex tasks and improve employee productivity.

The next phase of the AI investment cycle could therefore shift from simply acquiring more AI tools to determining which deployments deliver measurable business value.

If the technology continues to produce significant productivity gains, corporate AI spending could expand further and become a permanent component of employee and infrastructure budgets.

Oracle Faces Another Layoff Wave as AI Spending Reshapes Its Workforce

By
Paul Ugbede Godwin
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0

Oracle is reportedly preparing for another round of layoffs, just months after the technology giant eliminated roughly 21,000 positions during its 2026 fiscal year.

The potential cuts highlight a growing contradiction at the heart of the company’s strategy: Oracle is experiencing strong demand for cloud infrastructure while simultaneously reducing its workforce to manage the enormous costs of its artificial intelligence expansion.

According to Business Insider, which cited people familiar with the matter and an internal document, Oracle has asked managers to identify employees whose roles could be eliminated. Some teams could reportedly face workforce reductions in the double-digit percentage range.

With the cuts expected before Oracle begins its second fiscal quarter on September 1. Oracle has not publicly confirmed the reported layoffs.

The possibility of another reduction is particularly significant because Oracle has already undergone one of the largest workforce contractions among major technology companies this year.

Its employee count reportedly fell from approximately 162,000 to 141,000 by the end of fiscal 2026, representing a reduction of about 13%. The company also recorded approximately $1.8 billion in restructuring costs, compared with $374 million a year earlier.

Yet Oracle’s layoffs are not occurring because its cloud business is collapsing. Quite the opposite. Oracle’s cloud infrastructure revenue increased 77% year over year in fiscal 2026, while total revenue increased 17%.

The problem is that the company is simultaneously committing extraordinary amounts of capital to AI infrastructure. Oracle spent $55.7 billion during the fiscal year, while also raising substantial debt and equity financing to support its expansion.

That spending creates a difficult financial equation. Oracle needs massive data-center capacity to serve customers seeking AI computing power, but building that infrastructure requires enormous upfront investment.

Cutting payroll can therefore become one mechanism for controlling operating expenses while the company redirects capital toward data centers, GPUs and cloud infrastructure. The broader technology industry is facing a similar transformation.

Companies are increasingly using artificial intelligence to automate tasks, redesign workflows and concentrate hiring on highly specialized technical roles. Oracle’s situation demonstrates that layoffs connected to AI do not necessarily mean that AI alone is replacing workers.

Cost discipline, restructuring and the enormous expense of competing in AI infrastructure are also important factors. The human consequences remain substantial.

TIME previously documented the impact of Oracle’s March layoffs, describing how employees who had spent decades with the company suddenly found themselves without jobs. The report highlighted how some workers had been asked to document their workflows for AI systems before subsequently losing their positions.

Oracle’s latest workforce concerns underline a broader question: how profitable will the AI infrastructure boom ultimately become? Strong cloud demand is encouraging, but Oracle must spend aggressively today to capture potential revenue tomorrow.

If capital requirements continue rising faster than cash generation, workforce reductions may remain part of the company’s financial strategy. Oracle therefore finds itself at an important crossroads. Its AI ambitions are expanding rapidly.

Its cloud business is growing, and demand for computing capacity remains strong. But those opportunities come with extraordinary financial and operational costs.

The reported layoffs suggest that the AI race is not simply creating new jobs and revenue streams. It is forcing some of the world’s largest technology companies to rethink their workforce structures. For Oracle employees, another round of cuts would be a painful continuation of that transformation.

For the technology industry, it could be another indication that the cost of building the AI economy is being paid not only through billions in capital spending, but also through a smaller and increasingly specialized workforce.

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