US stocks remained steady, and Treasuries saw modest gains as investors anticipated the August jobs report, which could influence the Federal Reserve's decision on interest rates. Economists project a 55,000 increase in payrolls for August, following an unexpected decline in July, and the unemployment rate is expected to hold at 4.1%. Linh Tran from XS.com noted that a jobs report weak enough to deter a Fed rate hike, but not so weak as to signal a recession, would be ideal for the market. Stronger-than-expected employment and wage growth, conversely, could push yields higher and negatively impact equities.
In related market activity, S&P 500 futures were largely unchanged. Lululemon Athletica Inc. experienced a decline in early trading after adjusting its full-year outlook, while chip-related and space sector stocks outperformed. Longer-dated Treasuries gained, with the 10-year yield dropping one basis point to 4.75%. Brent crude eased towards $95 a barrel, and the dollar remained flat. Bitcoin fell 0.4% to $81,131.98, though it was still poised for a third consecutive week of gains, while Ether rose 0.6% to a seven-month high.
Simultaneously, US retail diesel prices surged to a record average of $5.85 a gallon, surpassing the previous high of nearly $5.82 in June 2022. This record price is attributed to the ongoing six-month war with Iran, which has disrupted global fuel supplies, particularly with tanker traffic bottlenecked in the Strait of Hormuz. Before the war, the national average for diesel was around $3.76 a gallon. The price of regular gasoline also increased to an average of $4.15 a gallon, up from $2.98 before the conflict.
The elevated diesel prices are expected to have widespread economic impacts, leading to higher transportation costs for goods and potentially contributing to increased inflation. Industries heavily reliant on diesel, such as freight, agriculture, and food supply chains, are particularly affected. Experts warn that if diesel prices remain high, the costs will continue to trickle down to consumers, impacting various products from groceries to cosmetics and furniture. Refrigerated items are among the first to see price increases, with seafood prices up 7% and fresh fruit prices up 4.9% in July compared to last year. Companies like Amazon, UPS, FedEx, and the USPS have already implemented fuel and logistics surcharges.
Globally, Europe's Stoxx 600 was little changed, though Volkswagen AG saw a 9.7% rise following a major restructuring announcement that includes 50,000 job cuts. Anthropic PBC is finalizing a $15 billion expansion of its credit facility, and OpenAI is set to release GPT-6, aiming for artificial general intelligence. The MSCI Asia Pacific Index rose 0.8% to its highest point since June 22, 2026, and the MSCI Emerging Markets Index gained 1.4%.
