The labor market just hit a wall. July’s jobs report missed expectations by a wide margin, and revisions to prior months erased more than a quarter million jobs from the books.

That’s the clearest sign yet that the U.S. economy is losing steam. Meanwhile, political friction is boiling over.

President Trump fired the BLS commissioner, the Fed is splintering over what to do next, and markets are left to navigate the fog. Let’s clear it up below.

Stay Up to Speed on Macro News!

We now send our macro-focused news via text, so you’re never far from the latest market-moving action.

👉 Click here to get our macro notes by text and always stay in the loop.

New Health Window (Sponsored)

Beat the Crowd: 7 Breakout Stocks to Know First

The second quarter has brought a wave of volatility, but also rare opportunity.

A just-released investor guide reveals seven stocks positioned to lead, based on deep research and market momentum.

These companies have one thing in common: big upside with limited crowd exposure.

From energy to biotech, this report uncovers where the smart money is flowing.

Claim the full list now before institutional buyers drive up prices.

[Get Your Free Guide Now]

The Big Picture

Supply Chain

China’s Mineral Clampdown Puts U.S. Defense Supply Lines at Risk 

America’s defense industry is feeling the squeeze. As China tightens its export controls on critical minerals, U.S. military manufacturers are starting to run low on key inputs necessary to maintain smooth production lines.

The Wall Street Journal reports that some companies are now drawing on their emergency reserves.

Leonardo DRS, a supplier of advanced defense systems, has warned that it will miss delivery deadlines if its access to germanium doesn’t improve by year-end.

Other firms are seeing mineral prices skyrocket, with one rare element now costing 60 times more than it did before China began cutting its supply.

This is no short-term spike. China dominates refining for 19 of the 20 critical minerals tracked by the International Energy Agency, many of which are essential to radar, satellites, guided weapons, and secure communications.

With a global market share of up to 70 percent in some materials, Beijing holds the upper hand in a supply chain that the U.S. no longer controls.

For the Pentagon, the stakes are rising. Subcontractors are warning of cascading delays, and alternative suppliers in the West remain years away from being able to scale.

In some cases, domestic production isn’t viable at commercial cost.

The defense sector’s exposure now underscores a broader vulnerability. Without a reliable supply of refined minerals, even the most advanced weapons systems grind to a halt.

Urgent sourcing strategies and long-term extraction plans will now shape national security as much as missile stockpiles do.

Labor

Beneath the Surface, the U.S. Job Market Is Fraying Fast

America's labor engine is losing power. Hiring momentum has stalled, and revisions to earlier payroll data now reveal the slowdown began months earlier than expected.

The biggest red flag isn't just weak job creation. It's the sharp decline in household employment and a shrinking labor force, both of which signal structural cracks.

Despite modest gains in healthcare and social services, core industries like manufacturing, construction, and professional services are shedding jobs.

This trend suggests deeper shifts. Baby boomer retirements are accelerating, while immigration policy has significantly reduced the available workforce.

Economists estimate the economy now needs fewer than 100,000 new jobs per month to match population growth, but even that bar is proving challenging to clear.

For U.S. employers, the policy choices are compounding long-term demographic pressures. The result is a labor market that appears stable on the surface but is quietly deteriorating beneath the surface.

Wage growth remains elevated, partly because lower participation artificially tightens the labor pool. But that hasn't translated into broader employment gains.

The number of part-time and long-term unemployed Americans is rising again, and federal workforce cuts continue to have a ripple effect across various sectors.

With fewer workers, slower hiring, and a tighter supply pipeline, the U.S. economy is facing a new challenge: running hard without traction.

Must-Own AI Stocks (Sponsored)

5 AI Picks Before the Crowd Piles In

Artificial Intelligence is shaping up to be the most disruptive force since the internet—and a new report shares 5 stocks poised to benefit.

Among them is a little-known "sleeper stock" still flying under Wall Street’s radar.

These picks come from a Zacks senior strategist and target high-growth areas powered by ChatGPT and machine learning.

Early entry could mean massive returns as AI’s $15 trillion boom unfolds.

[Download your free copy of “Zacks Top 5 ChatGPT Stocks” now.]

Crypto

America Declares Open Season for Crypto Builders and Blockchain Teams 

The United States has formally kicked off what it’s calling a “Golden Age of Crypto,” marking a rare moment of policy alignment, institutional support, and regulatory clarity for blockchain innovation.

A sweeping new federal stance positions the U.S. as a global crypto hub, following the passage of the GENIUS Act for stablecoin oversight, the SEC’s pivot toward constructive engagement via Project Crypto, and the release of a new national framework by the President’s Working Group on Digital Asset Markets.

The result: a unified push to accelerate blockchain development across financial, payment, and computing sectors.

For U.S. firms in the crypto industry, the message is now unmistakable.

Policymakers are inviting founders to build domestically, regulators are signaling a shift away from adversarial enforcement, and institutional investors are ramping up exposure across DeFi, stablecoins, and tokenized assets.

Global crypto teams are already taking notice.

By aligning tax, capital markets, and securities oversight under a single digital strategy, the U.S. is offering what many consider the clearest legal framework in the world for Web3 development.

This policy shift comes after years of regulatory friction and signals a broader goal: reclaiming leadership in decentralized technologies before global rivals set the pace.

Metrics to Watch

• Hiring Hits the Brakes: July saw just 73,000 jobs added, well below the 100,000 consensus. Worse, May and June were revised down by a combined 258,000. That makes for the weakest three-month stretch of job growth since the early pandemic era. Job creation is narrowing to sectors like healthcare, while cyclical areas like retail, manufacturing, and construction are starting to shed positions.
  

• Unemployment Creeps Up: The jobless rate ticked up to 4.2% in July, with long-term unemployment also on the rise. Notably, only 46% of industries added jobs last month, a ratio typically seen during recessions. Hours worked remain subdued, signaling weak labor demand despite the low headline unemployment figure.
  

• Fed Disunity Emerges: For the first time since 1993, two Fed governors dissented at last week’s policy meeting, calling for immediate rate cuts. Chair Powell held firm, citing tariff-induced inflation risks. But with job growth slowing and revisions painting a bleaker picture, the Fed’s “wait and see” stance may not last.
  

• Tariff Effects Starting to Bite: Businesses that pre-stocked inventory earlier this year are now facing higher input costs. Those with thin margins are preparing to raise consumer prices in Q3. That could rekindle inflation at the worst possible moment, just as growth cools and the Fed is debating its next move.

Real AI Shift (Sponsored)

A Major AI Shakeup Is Coming — Here’s Who Leads It

The escalating U.S.-China trade tensions are reshaping the AI landscape.

Companies like Nvidia are facing significant revenue hits with the U.S. imposing new export restrictions on advanced AI chips to China.

This shift opens doors for U.S.-based AI companies poised to fill the gap. I’ve identified 9 under-the-radar AI stocks with:

1. Deep AI integration across their core operations

2. Strong U.S. manufacturing capabilities

3. Proven revenue growth from AI initiatives

4. Infrastructure ready to capitalize on policy shifts

Access our FREE report, "Top 9 AI Stocks for This Month" to discover these opportunities before the broader market catches on.

Market Movers

📉 Labor Data Shocks Wall Street:
Stocks slipped Friday after the July jobs report disappointed, with the S&P falling 1.1% on the day.

The weak print, plus downward revisions, is prompting renewed bets on a September Fed rate cut, even as Powell stays cautious. Long-dated Treasuries rallied, and the 10-year yield dropped to 4.24%.

📊 Trump Fires BLS Commissioner After Jobs Miss:
In a shocking move, President Trump ousted the head of the Bureau of Labor Statistics, calling the agency’s data “manipulated.”

White House officials say they want to modernize the agency and install more “reliable” leadership. Economists warn that the firing risks undermining the credibility of economic data.

🧨 Fed Holds, But Divisions Widen:
The Fed left rates unchanged at 4.25–4.50% last week, but two governors dissented (both Trump appointees).

Powell avoided guiding toward a September cut, citing tariff-driven uncertainty. But with growth uneven and political pressure intensifying, the path forward is anything but clear.

📈 GDP Bounces, But With Caveats:
Second-quarter GDP grew at a 3% annualized rate, a sharp rebound from Q1’s decline. But nearly all the gain came from collapsing imports, meaning domestic demand actually weakened.

Final sales to private buyers rose just 1.2%, the slowest pace since 2022.

🛑 Business Spending Stalls:
Capex remains sluggish. Equipment investment was flat last quarter, and surveys point to hesitancy tied to policy volatility.

Companies from Carter’s to Steven Madden are pulling guidance due to uncertainty around tariffs, while Procter & Gamble warned that consumer demand is softening.

Market Impacts

Equities: U.S. stock futures were flat Sunday night as investors digested a weak July jobs report and President Trump’s sweeping tariff overhaul.

The S&P 500, Nasdaq, and Dow all posted their worst weekly performances in months—down 2.4%, 2.2%, and 2.9%, respectively.

Friday’s selloff came after Trump signed an executive order raising duties on dozens of countries, and nonfarm payrolls landed far below expectations.

With economic clouds gathering, August is already living up to its reputation as one of the market’s most volatile months. Traders are watching closely to see whether the Fed pivots, or if more pain is in store before relief arrives.

Bonds: Treasury yields plunged after the jobs report shocked to the downside, with the 2-year yield falling more than 25 basis points to 3.66%, its lowest since March. The 10-year yield dropped to 4.21% as traders boosted bets on a Fed rate cut in September.

Markets were further jolted by the resignation of Fed Governor Adriana Kugler, giving Trump an opening to install another rate-cut-friendly official.

With economic data weakening and political pressure mounting, fixed income markets are now fully pricing in at least two cuts by year-end.

Currencies: The dollar tumbled Friday, posting its steepest one-day drop against the yen since early 2023. The greenback sank 2.2% to 147.37 yen and fell sharply against the euro, which rose 1.4% to $1.1571.

Traders ramped up expectations for Fed easing after jobs data missed badly, with Fed funds futures now pricing in 63 basis points of cuts before year-end.

Sentiment also shifted on political risk, with Trump’s firing of the BLS commissioner and upcoming tariff implementation rattling confidence in the U.S. economic outlook.

Commodities: Oil slipped modestly after OPEC+ announced a 547,000 bpd output hike for September—the latest in a string of supply boosts aimed at regaining market share.

Brent settled at $69.24 while WTI closed at $66.94, with traders weighing Trump’s pressure on India to curb Russian oil imports ahead of the August 8 deadline.

Gold surged 2.1% to $3,359.77 as safe-haven demand spiked and rate-cut bets firmed. The yellow metal is now up nearly $60 in two sessions, as investors hedge against political volatility, slowing growth, and global trade fragmentation.

Must-Own AI Stocks (Sponsored)

5 Stocks at the Core of AI’s Next Phase

If you're like many investors, your portfolio is seeing some nice gains in this market.
But why settle for "nice" when you could aim for massive?

After filtering through thousands of companies, the experts at Zacks just released their top picks with the best chance to gain +100% or more in the coming year.

You can download the exclusive 5 Stocks Set to Double special report today — absolutely free.

These stocks have:

• Rock-solid fundamentals for long-term growth
  

• Promising technical indicators suggesting explosive upside soon
  

While we can't guarantee future performance, past editions of this report have posted gains like +175%, +498%, even +673%.¹

Important: This opportunity is only available until MIDNIGHT TONIGHT.

Download the report now – 100% free

Key Indicators to Watch

• 📅 ISM Services Index – Tuesday, August 5:
  Services activity is expected to show modest expansion, with forecasts calling for a slight uptick to 51.1. Markets will be watching for signs of consumer slowdown or resilience in light of tariff pressures.
  

• 📅 Jobless Claims – Thursday, August 7:
  Initial claims are forecast to tick up to 221,000. After a dismal July jobs report, this week’s data will help clarify whether labor market weakness is accelerating into August.
  

• 📅 Productivity & Labor Costs – Thursday, August 7:
  Q2 productivity is expected to rebound to 1.9%, while unit labor costs are projected to drop sharply from 6.6% to 1.3%. These metrics will shape how the Fed views inflationary wage dynamics.
  

• 📅 Consumer Credit – Thursday, August 7:
  With interest rates elevated and savings falling, June’s credit data will offer insight into how much consumers are relying on borrowing to fund spending amid economic uncertainty.

Everything Else

• Adriana Kugler’s surprise resignation gives President Trump another opportunity to reshape the Fed ahead of the September meeting.

• The U.S. just hit Switzerland with a 39% tariff, dealing a sharp blow to one of Europe’s most stable economies and catching policymakers off guard.

• U.S. construction spending fell for a second straight month in June, reflecting continued weakness in the residential and public infrastructure sectors.

• The Bank of Canada held rates steady and said global trade war risk appears to be easing, though it warned the outlook remains fragile.

• While consumer spending is recovering, Americans remain cautious in the wake of months of trade tensions and mixed inflation signals.