The US national debt officially crossed the $40 trillion mark, with a third of this debt needing refinancing within a year. Concurrently, 30-year Treasury yields hit their highest levels since 2007, and US borrowing rates also reached highs not seen since June 2007. Credit card serious delinquencies also surged to 2010 highs, indicating potential strain on consumer finances.
In currency markets, the US joined Japan in defending the yen, marking the first joint intervention by the two countries in approximately 30 years. The New York Fed reportedly sold euros and bought yen at the direction of Bessent via the Exchange Stabilization Fund. This intervention occurred as the Japanese yen has been under significant pressure, with Japan reportedly spending the market value of its entire official gold reserves to defend its currency.
Geopolitical events heavily influenced commodity markets. President Trump canceled planned strikes on Iran, stating that a deal was being rapidly made to reopen the Strait of Hormuz. This announcement caused a significant shift in oil prices; after an earlier pump in crude futures, prices dumped by as much as ~7%. Brent crude had reached $90.12 per barrel earlier, with Goldman Sachs projecting a moderation to $80 by year-end only if the Strait of Hormuz fully reopens in Q4. This cancellation followed a period of volatile oil prices, including a "sneak attack" by Iran's Revolutionary Guard on July 28 that saw all missiles intercepted, yet still caused crude futures to turn sharply higher.
Separately, the Coldcard wallet theft has now exceeded $88 million. In the tech sector, major tech giants experienced nearly $2 trillion in market capitalization swings, driven by investor assessments of AI investment returns. Microsoft rose 15% while Meta fell 8%, illustrating the market's divergent views on AI spending effectiveness. Jefferies noted that US tech giants' AI spending over the next 12 months is approaching $800 billion. Other tech movements included Apple shedding over $350 billion in market cap, while Amazon and Alphabet gained significant value.
