September hike odds just collapsed to 25%, and the repricing is bleeding into currencies, metals, and the long end of the curve.

This week's Fed minutes, flash PMIs, and a consumer bellwether's guidance will decide whether the pause trade extends or stalls.

Elon’s Supply Chain (Sponsored)

The Stocks Behind Elon’s Next Move

Most people know Elon Musk for rockets, EVs, Neuralink, and tunnels.

But his newest move may be tied to something completely different.

This technology is already being rolled out in multiple states, demand is rising fast, and major AI players are racing to secure access.

A few little-known companies control the supply chain behind it.

That means anyone who wants in, including Musk, Sam Altman, or other AI leaders, may need to go through them first.

Click here to see the little-known stocks tied to Elon’s next big move.

*This ad is sent on behalf of Altimetry, 110 Cambridge Street, Cambridge, MA 02141. If you would like to optout from receiving offers from Altimetry please click here.

The Big Picture

Manufacturing

A Seven-Year Defense Contract Is Sending Billions Into U.S. Production

The U.S. military has awarded Raytheon a $22.9 billion contract to dramatically expand production of Tomahawk missiles over the next seven years.

Annual output is expected to climb from roughly 60 missiles today to more than 1,000 as new manufacturing capacity comes online. 

Follow an order of this size through the supply chain, and you quickly reach far more than one assembly plant.

Factories Prepare to Scale

Higher production will require more electronics, engines, guidance systems, metals, specialized machinery, testing equipment, and skilled manufacturing workers.

Long-term contracts give suppliers something manufacturers rarely get during sudden demand surges: several years of predictable orders.

That visibility can make your factory expansion, equipment purchases, and workforce hiring easier to justify across the wider supplier network.

The production increase also follows recent agreements to expand output of other major missile systems and critical components.

The Industrial Base Gets Bigger

America’s defense manufacturing network has struggled with limited production lines and specialized suppliers that cannot expand overnight.

Large multi-year orders are designed to change that by giving manufacturers enough demand to invest in facilities and equipment before shortages become even harder to solve.

The latest contract is therefore more than another defense purchase. It is one of the clearest signs yet that a major expansion of U.S. manufacturing capacity is moving from planning into production.

Freight

Record Rail Surcharges Are Moving Through the Supply Chain

New regulatory filings show Union Pacific collected about $91 million more in fuel surcharges than it spent on fuel during the second quarter, putting fresh attention on the fees businesses pay to move goods by rail.

Fuel surcharges across U.S. railroads have also risen above their previous record from 2008. When you ship grain, chemicals, metals, vehicles, or consumer goods across long distances, rail costs quickly become part of the final price.

The Charge Travels With the Cargo

Railroads use fuel surcharges to adjust shipping bills when diesel prices rise. The formulas do not always move at the same speed as actual fuel prices, creating periods when charges remain high even after energy costs change.

Those costs matter well beyond the rail industry. Farmers, manufacturers, retailers, and chemical producers depend heavily on freight networks, and higher transportation bills can eventually work their way into your grocery store, factory, or warehouse.

Supply Chains Feel Every Extra Mile

Rail is one of the cheapest ways to move heavy goods across the country, which makes rising charges especially important for industries that cannot easily switch to trucks.

Higher freight expenses can squeeze business margins or be passed further down the supply chain.

The latest filings put a fresh spotlight on how fuel pricing inside America’s freight system can keep transportation costs elevated even when the original energy shock begins to fade.

Free ticker (Sponsored)

The Tech Stock Beyond Nvidia

I've recommended Nvidia for over two decades.

Now I may have found an even better tech stock for the long haul.

It's at the center of Elon Musk's AI mission, with a $51 billion backlog—and it's not SpaceX or Tesla.

A major announcement on September 3 could send shares higher.

Get the Name and Ticker Free

Trade

A 50% Tariff Is About to Hit a New Wave of U.S. Imports

A new 50% tariff is scheduled to hit a broad group of Canadian goods entering the United States this week, covering products ranging from furniture and cement to dairy products, clothing, wine, and sporting equipment.

Nearly $20 billion of annual imports could be affected, pushing the trade dispute directly into supply chains used by American retailers, builders, manufacturers, restaurants, and distributors.

The new duties are also expected to reach some goods that had previously moved under North American free-trade protections.

The Cost Moves Into U.S. Business

Tariffs are collected when goods enter the United States, putting the immediate cost on American importers. Companies can absorb part of the increase, switch suppliers, reduce orders, or raise prices.

Retailers, construction companies, restaurants, and manufacturers that rely on Canadian products could face higher input costs almost immediately. Industries with tightly connected cross-border supply chains have fewer easy alternatives.

North American Trade Gets More Expensive

Canada remains one of America’s largest trading partners, and decades of integration have made the border part of the production system itself.

Higher costs can therefore spread even into products assembled in the United States when materials or components cross the border earlier in the supply chain.

The latest tariff wave creates a fresh cost test for American businesses at a time when many industries are already managing expensive labor, transportation, and financing.

The immediate question is how much of the added import cost businesses absorb and how much eventually passes on to consumers.

Metrics to Watch

• 📊 US CPI (July) printed 3.4% year-over-year. The softest CPI trajectory in months, and the single biggest reason the September hike is off the table for most desks. This is the number your portfolio is trading on.
  

• 📈 US Retail Sales (July) missed forecasts, sending the dollar lower and Treasury yields down in tandem. The consumer is finally showing cracks after eighteen months of resilience. Walmart's print Thursday is the tell for whether Q3 GDP holds up.
  

• 💹 Fed Funds Futures now price September hike odds near 25%. A full repricing of monetary expectations in roughly a week. If Wednesday's minutes read hawkish, it snaps back fast.
  

• 🏦 10Y-2Y Yield Spread steepened on the week. The market is telling you the Fed is finished tightening while fiscal risk keeps the long end elevated. A classic bull-steepener setup, historically a good environment for banks and REITs.
  

• 🛢️ Brent Crude bid higher on Hormuz disruption. Every $10 sustained move in crude adds roughly 0.3% to headline CPI over three months. If Brent stays elevated through Labor Day, the soft-CPI thesis gets tested hard in the September print.

Market Movers

🏛️ Fed Pause Bets Flipped
September hike odds collapsed to 25% after soft CPI and retail sales. The single biggest macro reprice of the summer. It's driving everything from the dollar to gold to duration bets.

🚢 Hormuz Shipping Slowdown
Tanker traffic through the strait thinned meaningfully after weekend attacks. US-Iran talks are stalled. India is stockpiling. This is the setup for a supply squeeze that flows through jet fuel, gasoline, and eventually your grocery bill by October.

💵 Dollar Index Below 100
DXY broke a psychological level as retail sales missed and Fed cut expectations firmed. Japan intervened in coordination with the US on July 31 to defend the yen, the first joint operation in 28 years.

If the dollar keeps sliding, your EM equity exposure just picked up a tailwind you weren't paying for.

🥇 Gold Climbing Again, Not at Records
Bullion is near $4,450 an ounce, about a third above where it traded a year ago but still well below its 52-week high around $5,586, so this is a recovery leg rather than a breakout to all-time highs, with silver and copper running alongside.

This is real-money buying. Central banks and Asian retail combined. Adding 3% to 5% here still makes sense on a Fed-pause backdrop.

Market Impacts

📈 Equities: Energy led the market with XLE closing up 1.39% Friday on the Hormuz bid. If soft CPI holds and the Fed minutes lean dovish Wednesday, rate-sensitive small caps and REITs are the natural catch-up trade.

🏦Bonds: The 10-year yield eased on the week as softer inflation data reduced hike pressure, and two-year yields fell in sympathy. But the long end is stuck with a fiscal supply problem the Fed can't fix. That's the yield-curve steepener at work.

💱 Currencies: The dollar index broke below 100 for the first time since spring. USD/JPY held despite the July 31 joint intervention, signaling the market doesn't fully believe Tokyo's line in the sand. European and Japanese equities in dollar terms just picked up a tailwind.

🛢️Commodities: The energy complex is being driven by Hormuz, the metals complex by Fed pause bets and central bank buying. Natural gas is the outlier, drifting lower on ample storage. If you're underweight commodities, you're underweight the trade of 2026.

Musk’s Financial Signal (Sponsored)

Elon sends America a warning

Elon Musk spent millions to speak directly to 125 million Americans during the year’s biggest television event.

Most viewers moved on. But former hedge fund manager Whitney Tilson believes Musk revealed a major financial shift hiding in plain sight.

See Elon’s warning and what Tilson says investors should do next.

*This ad is sent on behalf of Stansberry Research, 1125 N Charles St, Baltimore, MD 21201. If you would like to optout from receiving offers from Stansberry Research please click here.

Key Indicators to Watch

• 📅 August 19: US Housing Starts and Building Permits. The July print lands before the open. Consensus is looking for a modest bounce. If starts miss again, the residential construction story takes another hit and homebuilders sell off into the Fed minutes.
  

• 📅 August 19: FOMC July Minutes. Released at 2 PM ET. The single biggest event of the week. Watch the internal debate on inflation versus labor market cooling. Dovish minutes confirm the September hold, and rate-sensitive names run.
  

• 📅 August 20: US Jobless Claims and Leading Indicators. Any claims print above 220K and the labor-cracking story gets fresh oxygen. Leading Indicators expected to turn positive after last month's dip.
  

• 📅 August 21: Flash PMIs. Manufacturing and services PMIs for August. The first look at how tariff uncertainty is hitting business confidence. Watch new orders and prices paid. Both feed directly into the September CPI print.
  

• 📅 August 21: Walmart (NYSE: WMT) Earnings. The consumer bellwether. Guidance matters more than the print. If Walmart flags a weaker back-to-school and holiday setup, the soft retail sales number gets confirmation and the consumer-discretionary trade rolls over.

Everything Else

• ⚙️ The shift to machines doing real work spans seven trades and a free report names the companies with real revenue and fresh catalysts.

• 💵 Softer U.S. jobs and inflation data have cut Fed hike bets, with markets increasingly expecting policymakers to leave rates unchanged in September.

• 👷 U.S. retail sales posted their first decline in nine months as consumer spending showed fresh signs of losing momentum.

• 🏦 Philippine policymakers expect inflation to ease gradually, although the central bank warned that upside price risks remain.

• 😟 U.S. consumer sentiment weakened in August while households’ near-term inflation expectations ticked higher.