Wall Street traded with a defensive tone ahead of the U.S. July nonfarm payrolls report. All three major U.S. stock indexes closed lower on Thursday, with the Dow Jones Industrial Average down 0.85%, ending a five-session winning streak, the S&P 500 off 0.18%, and the Nasdaq slipping 0.06%.
Traders were dealing with profit-taking before payrolls and a fresh inflation repricing tied to a sharp move higher in oil. Activity stayed light. Goldman Sachs’ trading desk rated market activity at 4 out of 10, and turnover ran 12% below the 5-day average.
Oil jumps on Strait of Hormuz developments, copper nears record territory
Iran moved forward with a draft rule on transit through the Strait of Hormuz that would bar vessels from the United States, Israel and related parties, with penalties of as much as 20% of cargo value for violators. Brent crude rose 5% to $82.9, while WTI crude gained 4% to $77.
Donald Trump said the Strait of Hormuz was “open in some way,” but also said the U.S. Navy was carrying out a blockade operation targeting Iran and that an agreement “cannot yet be said to have been formally reached.” Goldman’s energy team said Brent could remain in an $80 to $90 per barrel range until a new U.S.-Iran agreement is confirmed or the situation escalates materially.
The Treasury market stayed under pressure. The 10-year U.S. Treasury yield rose about 6.5 basis points, up 1.37% on the day, and at one point tested 4.70%. Alphabet’s $25 billion bond sale added to supply pressure. The deal drew about $115 billion in orders, roughly four times expectations. Higher yields helped the U.S. dollar rebound, with the dollar index testing 100.
Gold briefly moved above $4,300 intraday and then gave back the move to finish flat. The World Gold Council said gold prices were unchanged in July and said the next move will depend on real rates, the dollar, growth expectations and central bank responses. It also said a second wave of high inflation similar to the late 1970s cannot be ruled out, though that is not automatically bullish for gold.
In industrial metals, LME copper rose nearly 2% at one stage to $14,369 a ton after the Democratic Republic of the Congo banned exports of copper-cobalt concentrates. The move marked the highest level since January and left copper close to its historical peak. PANews said the logic behind copper’s rally has shifted away from a standard growth-recovery trade toward a mix of supply constraints, electricity demand from AI data centers, grid upgrades and trade-policy uncertainty.
Trump also signed an executive order setting minimum import prices and imposing a 15% tariff on imported polysilicon, wafers and solar modules, effective Dec. 4, 2026. He also said exports of tungsten scrap and battery scrap will be banned starting Aug. 27. PANews said tariff, energy and critical minerals policies are increasingly combining into a new inflation framework, prompting a reassessment of regional supply risks across battery, semiconductor and defense supply chains.
Payrolls now carry more weight as hawkish Fed voices grow louder
Forecasts on Wall Street for the payrolls report remain widely split, with estimates for job growth ranging from 18,000 to 83,000. A reading far from consensus could trigger sharp moves across financial markets.
Fed rhetoric has also turned more hawkish. St. Louis Fed President Musalem said the probability of inflation remaining above target has increased and that he leans toward supporting a rate hike. The Financial Times reported that Warsh is also prepared to push for a September hike if inflation data in coming weeks comes in hot. BMO, TD Securities, Bloomberg and UBS all said a strong payrolls print, combined with imported inflation pressure from higher oil prices, could keep the Fed on a hawkish footing in September.
AI software and memory stocks tumble while space and energy names hold up
AI application software and memory-chip shares sold off sharply after earnings or guidance missed expectations, while space-linked names and some energy stocks moved higher on event-driven buying. The Magnificent Seven index still edged up 0.23%, but market breadth was weak. Hedge funds bought technology shares, while long-only capital cut exposure to information technology and healthcare.
As earnings season moves toward the finish line, investors are rethinking the sustainability of high spending and high valuations. Among S&P 500 constituents that have reported, about 84.8% beat earnings expectations, well above the historical average of 68%. Yet share-price reactions have cooled, pointing to a market that is paying more attention to forward guidance than to results already delivered. PANews said tolerance for AI-related companies has dropped as compute expansion runs into hard constraints in memory, power and capital expenditure.
Alphabet’s bond deal became the session’s standout event. The $25 billion issuance and its roughly $115 billion order book pulled liquidity from the market and helped push long-end Treasury yields higher. Investors are increasingly focused on whether AI infrastructure spending could drive major technology companies’ free cash flow into negative territory.
SpaceX rose 6.14%. A massive unlock involving 911.5 million shares with a value in the hundreds of billions did not trigger panic selling and instead was followed by gains. PANews said Wednesday’s sharp sell-off had already flushed out marginal sellers, while retail buying offset institutional caution. Elon Musk also announced an initial $16.8 billion investment with Tesla to build the Terafab super chip plant, targeting annual compute output of 1 terawatt.
Most space-related shares followed higher. Redwire gained more than 10%, Kratos Defense & Security Solutions rose nearly 4%, Rocket Lab climbed more than 1%, Boeing fell more than 3%, and AST SpaceMobile slipped more than 1%.
Memory stocks were hit hard. Western Digital fell 13.03% and SanDisk lost 6.81%. Both companies posted better-than-expected fiscal fourth-quarter results, but current-quarter revenue guidance missed expectations and margins showed signs of peaking. Citigroup and Jefferies cut their price targets on SanDisk, while Goldman said overly elevated expectations had already priced in much of the upside. SK Hynix fell nearly 5%, Micron Technology dropped more than 1%, and the Roundhill Memory ETF (DRAM) lost more than 4.5%, while Silicon Motion gained nearly 9%.
AI software names also sold off heavily. AppLovin dropped 19.66%, and Datadog fell more than 19%. AppLovin missed expectations on both second-quarter revenue and third-quarter guidance, and its CEO said core AI model performance had not improved on schedule, leading advertisers to tighten budgets. Datadog was sold down after expectations for third-quarter revenue growth softened. HubSpot fell more than 19%, Salesforce lost more than 3%, and Cloudflare declined nearly 3% before rebounding in after-hours trading. Unity Software jumped more than 15% after results beat expectations.
Alphabet fell 1.29%. The company launched the $25 billion bond sale to support AI capital expenditure of as much as $205 billion. Demand exceeded that seen in deals from Amazon and SpaceX, but the size of the financing deepened concern that free cash flow could turn negative.
Optical-communications shares were supported by infrastructure demand. AXT Inc gained more than 9%, Astera Labs rose more than 4%, Credo added more than 2%, and Lumentum advanced more than 1%. Tesla slipped 0.63%. Musk said Terafab’s compute capacity will be allocated in a 1:3 ratio to the Optimus humanoid robot program and spacecraft AI projects.
Oracle fell 0.64% and Nebius dropped 13.29%. Michael Burry disclosed short positions in Oracle at $144.63 and in Nebius at $211.77, betting that slow GPU depreciation is making earnings look stronger than they are.
Airbnb rose more than 8% in after-hours trading after second-quarter net profit climbed 27%, booking volume hit a record, and the company sharply raised full-year guidance. Microsoft gained 2.54% to a fresh high for the year after opening its largest data center in India. Meta Platforms rose 0.19% even after a New Mexico judge ordered it to pay $567 million into a youth mental health relief fund. Nvidia slipped 0.10% and was reportedly considering lowering memory specifications for its next-generation Rubin Ultra chip because of shortages in HBM, a change that could require customers to buy more chips to run large AI models.
What markets are watching next
The first key event is the U.S. July nonfarm payrolls report due at 20:30 on Aug. 7. Wall Street forecasts for job creation range from 18,000 to 83,000. A stronger-than-expected number could reinforce expectations for a September Fed hike and lift both the dollar and Treasury yields. An extremely weak reading, with oil already elevated, could quickly intensify stagflation fears and drive sharp swings across stocks, bonds and currencies.
The second event comes at 4:30 on Aug. 8, when the Commodity Futures Trading Commission will release gold positioning data through Aug. 5. Traders will be looking to see whether Wednesday’s sharp one-day move in gold was driven by forced covering from CTA funds or by aggressive institutional long buying. If active money is absent, PANews said gold could face a buyer vacuum above $4,200.