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Watch Live: Fed Chair Warsh Explains 'Hawkish' Hold

Having delivered the biggest "non-cut" surprise to markets in decades - by holding rates unchanged (markets were pricing a 35% chance of a hike) - and given Warsh’s distaste for forward guidance, he is unlikely to offer any clearer signals during the press conference.

Bear in mind that since 2015, traders have foreseen the Fed’s ultimate rate decision with an average error of 2.4 basis points the day before the central bank’s announcement, according to a note from Ian Lyngen, head of US rates strategy at BMO Capital Markets.

“The market is set up for a sharper kneejerk response to the FOMC announcement than is typically the case,” Lyngen said.

Jonathan Pingle, chief US economist at UBS, said he hadn’t felt this uncertain about an imminent Fed rate decision in 20 years, back when Ben Bernanke became Fed chair.

However, the three dissents in favor of a rate hike clearly show the direction of travel,and that may prove helpful to Warsh if he aims to tamp down inflation pressures.

While yields are down and gold up after the statement, the dissenters would suggest this decision leans hawkish (Goldman expected 2 dissents, so marginally hawkish).

Warsh will likely emphasize that all options remain open, and that future decisions will depend on the data.

Desks anticipate a continued emphasis on the inflation side of the dual mandate, without offering any type of commitment for future hikes, though he might also acknowledge the upside risks to inflation posed by the latest rise in oil prices.

He recently announced the leaders of the five Chairman’s Task Forces for Advancing Monetary Policy and might provide an update on the timeline for their work.

Watch the full press conference live here (due to start at 1430ET):

Tyler Durden Wed, 07/29/2026 - 14:25

No Rate-Change Sparks 3 Dissents As Warsh Fed Delivers Biggest 'Non-Cut' Surprise In Decades

Tl;dr: The Fed held rates unchanged, delivering the biggest surprise "non-cut" to the market in decades. Three dissenters wanted a rate-hike, clearly signaling the direction of travel and confirming this decision as a "hawkish hold" though arguably only marginally.

*  *  *

Since the last FOMC meeting on June 17th (Kevin Warsh's first as Fed Chair), a lot has happened, with the Iran war re-erupting driving oil prices and the dollar higher, while stocks (momo/semis meltdown), bonds, gold, and bitcoin are all lower...

Both growth and inflation macro data has surprised to the downside...

But, oil's resurgence has pushed rate-hike odds significantly higher...

But, this will still be one of the first Fed meetings in years where the market does not have at least 80% confidence in what the committee will do...

One way or another, this will be the largest "non-cut" surprise in decades.

If the Fed hikes today, it will be almost as big of a surprise as Powell's 50bps cut in Sept '24 meant to give the election to Kamala. pic.twitter.com/5tQyfvye1H

— zerohedge (@zerohedge) July 29, 2026

As we detailed earlier, since 2015, traders have foreseen the Fed’s ultimate rate decision with an average error of 2.4 basis points the day before the central bank’s announcement, according to a note from Ian Lyngen, head of US rates strategy at BMO Capital Markets.

“The market is set up for a sharper kneejerk response to the FOMC announcement than is typically the case,” Lyngen said.

Jonathan Pingle, chief US economist at UBS, said he hasn’t felt this uncertain about an imminent Fed rate decision in 20 years, back when Ben Bernanke became Fed chair.

A lack of a track record by Warsh and recent divisions among Fed officials are further clouding the outlook, he said, not ruling out a scenario where Warsh is the one who casts the deciding vote.

“Given the fact that he can push around sort of the median of the committee at the moment, he’s going to decide policy for the next few meetings, and we really have no idea how Kevin Warsh thinks about monetary policy.”

Remember, there are/were 9 members of the committee that saw hikes this year...

Most pundits and sell-side analysts see the central bank leaving rates on hold - especially since last month's inflation reports came well below expectations, and there are no dots or forecasts to update this month.

So, with the market pricing a one-third chance of a hike today, what did The Fed decide?

• *FED VOTES 9-3 TO HOLD BENCHMARK RATE IN 3.5%-3.75% RANGE

• *FED: HAMMACK, KASHKARI AND LOGAN DISSENT IN FAVOR OF RATE HIKE

• *FED REPEATS ECONOMIC ACTIVITY IS EXPANDING AT A SOLID PACE

• *FED REPEATS COMMITTEE WILL DELIVER PRICE STABILITY

• *FED REPEATS JOB GAINS HAVE KEPT PACE WITH WORKFORCE

The three dissents in favor of a rate hike clearly show the direction of travel.

And that may prove helpful to Warsh if he aims to tamp down inflation pressures.

Read the redline below (not much changed)...

Tyler Durden Wed, 07/29/2026 - 14:00

US-Owned LNG Ship Reportedly Struck By Kamikaze Drone At Egyptian Port

A potentially major escalation emerged late Wednesday after a US-owned gas-processing vessel moored at Egypt's Mediterranean port of Damietta was reportedly struck by a drone, according to Reuters, citing maritime security firm Ambrey. Details remain scant, and this assessment is preliminary.

Explosion disrupts Damietta LNG hub

An explosion at Egypt's Damietta LNG terminal has disrupted operations at one of the country's key LNG import hubs after damaging the Energos Winter floating storage and regasification unit and the GasLog Salem LNG tanker. Both vessels have… pic.twitter.com/mYNTUanzT7

— Kpler (@Kpler) July 29, 2026

🚨🇺🇸🇪🇬🇲🇭 A US-owned LNG floating storage facility flying a Marshall Islands flag was struck by at least one drone in Damietta, Egypt.

Local authorities say the situation is now ‘under control.'

“The vessels involved have been safely relocated outside the port area... port… pic.twitter.com/te6MxlOtDp

— Mario Nawfal (@MarioNawfal) July 29, 2026

Ship-tracking data from Bloomberg shows the gas-processing vessel Energos Winter, which serves as a floating storage and regasification unit, moored off the port of Damietta. The port hosts the Damietta LNG terminal, a critical outlet for processing and exporting Egyptian and regional natural gas to Europe.

Reuters reported:

The drone hit floating storage tanker Energos Winter, causing a fire that then spread to another vessel, Gaslog ‌Salem, ⁠three trading sources familiar with the incident said. Two separate security sources said the cause ⁠of the blast was a drone strike.

The crew was evacuated, and the fire had ⁠been brought under control, Ambrey said, adding that no party ⁠had claimed responsibility.

Our partners at Newsquawk issued an alert at around 12:09 p.m. New York time that appeared to contradict Reuters' reporting on the floating storage and regasification unit:

Reports of a drone attack targeting Damietta port are false, Al Hadath reports, citing a source.

There are also conflicting reports on X: Some say it was a drone strike, while others say it was an industrial accident.

Two small drones hit it from two points according to a source in that port. No industrial accident at all.

— Babak Taghvaee - The Crisis Watch (@BabakTaghvaee1) July 29, 2026

Catch up with the latest US-Iran wrap. Read more here.

Tyler Durden Wed, 07/29/2026 - 13:45

Trump Invites California Teen Lifeguard Who Rescued Boy To White House

Authored by Jill McLaughlin via The Epoch Times,

A teen lifeguard, who heroically dove into pounding waves to save a young boy, will be honored by President Donald Trump at the White House.

Lifeguards rescue boy at California beach amid intense waves

"We're going to bring this heroic young man, and his family, into the White House with, perhaps, the boy he saved, to give him a High Civilian Honor," Trump announced on X July 28. "Very brave, he deserves it!"

The lifeguard, Ryder Williams, 16, rescued the 10-year-old boy on July 25 at Seabright Beach, about 6 miles east of the popular Santa Cruz Beach Boardwalk and about 60 miles south of San Francisco.

A witness, Scott Vander Dussen, posted the viral video of the rescue on Instagram.

        View this post on Instagram                      

A post shared by Scott Vander Dussen (@santacruznow)

In the clip, Williams is seen running into the rough water before he grabs the boy around the chest. The boy appeared to be exhausted and going limp, and unable to hold onto the lifeguard as relentless waves crashed over them.

The two were overcome with high surf multiple times before Williams was able to pull the boy close enough to the beach to be aided by another lifeguard and members of the public.

"That boy was moments from not coming back," Vander Dussen said in a social media post on X. "A few seconds, a few degrees, a few yards of distance, and this is a very different story with a very different ending."

Vander Dussen told NBC-owned KNTV-TV the waves were at "normal intensity" one moment and then suddenly changed.

"It caught a lot of people off guard," Vander Dussen said. "Unfortunately, this young man was overwhelmed and swept out in just a moment's time. I'm glad it ended the way it did."

A series of tropical storms and hurricanes, including Fausto and Genevieve, has impacted the California coast since late last week, resulting in higher surf and hazardous conditions.

The National Weather Service issued a beach hazard advisory this week for the central California coastline. Forecasters warned of an increased risk of sneaker waves and strong rip currents. Breaking waves could reach up to 10 feet along some beaches, the weather service said.

"Remain out of the water to avoid hazardous surf and never turn your back on the ocean," the advisory read.

California State Parks, which operates the lifeguard program at Santa Cruz, said thousands of ocean rescues happen every year.

"Our State Park lifeguards courageously risk their own lives every day to keep our visitors safe," California State Parks spokesman Tyler Hersko told The Epoch Times. "Their dedication never goes unnoticed and they are truly heroes to their local communities, Californians and the nation."

The department employs about 600 seasonal lifeguards every summer and about 70 permanent lifeguards who make about 10,000 rescues every year, according to Hersko.

Since the start of the month, the lifeguards have made 3,600 rescues and provided 1,600 cases of medical aid.

State Parks didn't say whether Williams had accepted the president's invitation to the White House.

Tyler Durden Wed, 07/29/2026 - 13:25

From Momentum To Mayhem: Korean 'Plunge Protectors' Meet As Leverage Unwind Sparks Chaos

'Leverage goes both ways...'

That is a lesson that many are learning in a painful manner as the army that enjoyed the momentum escalator ride up are now decrying the elevator plunge lower... and the poster-child for this pain is Korea.

Following anxiety over new Chinese competition, and disappointing earnings from SK Hynix overnight, Korea's stock market has plunged 44% from its record highs in June (but remains up 27% YTD still)...

Triggering yet another circuit-breaker...

You didn’t pray hard enough

The Kospi Index slid as much as 12.6%, triggering a circuit breaker for a second straight day. The gauge is on course for a record monthly loss of ~35%. https://t.co/PmULRxoa1Y

— zerohedge (@zerohedge) July 29, 2026

And prompting panic among Korean regulators:

As Bloomberg reports, South Korea will hold an emergency meeting Wednesday evening to discuss the market situation after a stocks rout that has wiped billions of dollars off investors’ holdings. The meeting, hosted by Finance Minister Koo Yun Cheol, will involve all of the country’s top financial authorities, starting from 6 p.m. local time, according to lawmaker Yoo Dong-soo.

Top administration officials faced multiple rounds of questioning by lawmakers at the country’s parliament Wednesday.

Lawmakers have linked the rout in part to South Korea’s rollout of leveraged single-stock products in May.

As CNBC reports, South Korea’s finance minister apologized on Wednesday after retail investors racked up heavy losses from leveraged bets on stocks, following rule changes earlier this year.

The May 27 introduction of single-stock leveraged Exchange Traded Funds has seen Korean retail investors pile in with net purchases of 14 trillion won ($9.7 billion), compared with roughly 2 trillion won by foreign investors, according to KB Financial Group.

But the speculative trading boom that helped fuel one of the world’s hottest equity markets has resulted in those investors nursing heavy losses as Korea’s Kospi index has experienced a sharp correction, led by a downturn in chip stocks.

“We’ve already put in place a package of measures, but if it’s needed we’ll introduce additional steps to help normalize the market,” Koo told lawmakers Wednesday.

Cue - the plunge protectors.

Rubbing salt into into the wounds, The FT reports that The Bank of England is probing the rapid growth of exposure to Asian equities among investment banks operating in London, as officials seek to avoid a build-up of highly concentrated bets on a few AI-linked companies.

The BoE’s Prudential Regulation Authority, which supervises UK banks, has launched a review of lenders’ prime brokerage operations in London to check whether they are taking on excessively concentrated exposures to Asian equities, according to people briefed on the move.

When the BoE believes prime brokers are taking on excessive risks, its supervisors can increase the amount of liquid assets they are required to hold to help them survive a potential market sell-off or the collapse of a large client.

...which would be yet another forced deleveraging event for those Korean/Asian equity market investors.

On the potentially bright side, Goldman Sachs' Alvin So - who has been tracking the Korean leveraged ETF market like a hawk - notes that a great deal of the exposure to levered Korean ETFs has already been unwound...

Incorporating today's price action, Korea-focused leveraged ETF AUM has declined to US$15–16bn (~70% domestically listed), equivalent to roughly 1.5% of Korean free float on a leveraged-exposure basis.

This is down 70%+ from the peak of US$53bn (3.2% of free float) on June 22.

Over the same period, Korean equities have declined by 40%.

We have also started to see net outflows from these products over the past two weeks (-US$2bn, as of yesterday), despite +US$8-9bn of buy-the-dip inflows between June 22 and July 15. 

“The deleveraging and selloff in Korea have increasingly taken on a life of their own,” said Rajeev De Mello, global macro portfolio manager at Gama Asset Management.

“Concerns about excessive optimism around AI initially triggered the correction in semiconductor stocks, but the latest acceleration lower looks less driven by fundamentals and more by positioning, forced selling and investor psychology.”

Circling back to the carnage, unless the market stages a meaningful bounce over the next two trading days, the KOSPI is set for its worst month ever.

Korean opposition lawmakers questioned why the levered products were introduced at an unusual speed despite concerns from much of the asset-management industry, arguing officials prioritized efforts to boost stock prices over market stability.

“The country has turned into a casino,” People Power Party lawmaker Lee Jongwook told Koo during the hearing.

“These are products that should never have been allowed onto the market. I consider this a policy failure.”

Funny, we didn't hear you complaining on the way up??

We give the last word to Goldman Sachs Korean traders who noted that despite foreign flows switching to net sellers, they did not sense any material change in flow snapshot throughout the day, as it continued to be two-way but better sell skewed in memory. The Goldman desk also notably caught some dip buyers in memory intraday, so would not necessarily distinguish flow today as 'capitulation'.

This is far from over as the degenerate gamblers keep catching that falling knife...

Tyler Durden Wed, 07/29/2026 - 12:35

FDA Panel Backs Wider Access To Six Peptide Therapies, Citing Grey Market Concerns

Via American Greatness,

A Food and Drug Administration (FDA) advisory panel has voted to recommend expanding legal access to six popular peptide compounds. Supporters say it could pull patients out of the unregulated grey market that has flourished under years of federal inaction.

The FDA's Pharmacy Compounding Advisory Committee reviewed seven peptides during a two-day hearing in Maryland last week, weighing whether each should be added to the agency's Section 503A Bulks List. Reuters reported the panel voted in favor of moving six forward: BPC-157 for ulcerative colitis, TB-500 and KPV for wound healing, MOTS-c for obesity and osteoporosis, Semax for cerebral ischemia, migraine and trigeminal neuralgia, and Epitalon for insomnia.

Peptides are short chains of amino acids that help regulate metabolism, growth and tissue repair, according to the Cleveland Clinic. Some, including insulin and GLP-1 weight loss drugs, are already FDA approved, while others have remained in regulatory limbo even as demand exploded among patients seeking help with weight loss, muscle building, chronic disease and performance.

If the FDA ultimately adopts the recommendation, licensed compounding pharmacies could prepare the peptides for valid prescriptions, giving patients a legitimate alternative to unregulated online vendors who have filled the gap left by federal delay.

Jim LaValle, a Texas based clinical pharmacist who chairs the International Peptide Society and testified at the hearings, said the vote was not a rubber stamp but a meaningful step toward accountability. "This was not FDA approval, nor was it a blanket endorsement of every peptide, every use or unrestricted access," he told Fox News Digital. "I have said throughout this process that you do not solve a quality problem by forcing the market underground."

LaValle said he was encouraged because the recommendation creates a path away from unverified research use only products and toward oversight by qualified clinicians and licensed pharmacies. He described the right model as access paired with guardrails: trained clinicians, licensed pharmacies, validated quality testing and consistent patient follow up.

"My hope is that the FDA follows the recommendation with a transparent, science-driven process, establishes clear, peptide-specific standards, and follows the guidance for approving a substance that meets the FDA's current regulations," LaValle said, adding that the process should include verifying that both active ingredients and finished products meet quality standards and tracking any side effects.

LaValle cautioned that the committee's vote is only a recommendation, not final FDA approval, and that compounded medications are regulated differently than fully approved drugs. He urged patients to avoid research use only products sold online and to work only with licensed clinicians and pharmacies. "The peptide revolution is here," he said. "However, don't expect miracles. Better choices related to diet, exercise, gut health, sleep, stress and managing metabolic health, guided by regular lab assessments, should be the goal."

The FDA will now weigh the recommendation before issuing a final decision.

Tyler Durden Wed, 07/29/2026 - 12:05

NANO Nuclear Expands Air Force Footprint With Second AFWERX Award

NANO Nuclear Energy has been selected for a new AFWERX Small Business Innovation Research Phase I award, giving the company another opportunity to advance its KRONOS MMR Energy System with the Department of the Air Force.

The new Phase I award is framed as a broad research and development agreement. NANO said the contract is focused on using KRONOS to “address the most pressing challenges in the DAF [Department of the Air Force].”

The distinction between this award and NANO’s previous Air Force contract is worth noting. 

Last year’s roughly $1.25 million Direct-to-Phase II award was tied to a specific objective: studying the feasibility of deploying a KRONOS MMR at Joint Base Anacostia-Bolling in Washington, DC. That work examines the base’s energy requirements, grid vulnerabilities, siting options, environmental considerations and regulatory pathways.

Rather than evaluating a reactor for one predetermined location, the new engagement could give NANO a wider platform to demonstrate how KRONOS might support energy resilience across additional Air Force installations and potentially other defense applications. It arrives as the military is moving ahead with microreactor projects at several bases, reflecting growing concern over fragile commercial grids and the need for dependable, on-site power.

Of course, an early-stage government award should not be confused with a reactor purchase order. There is still plenty of engineering, licensing and bureaucracy standing between an SBIR contract and an operating nuclear plant.

Still, NANO now has multiple active Air Force engagements instead of a single feasibility study. The earlier Phase II contract gave the company a concrete deployment target, while this broader Phase I award could give it something potentially more valuable over the long run.

Tyler Durden Wed, 07/29/2026 - 11:45

Ukraine's FM Claims Attack On Iranian Ship In Caspian Sea Was 'Unintentional'

The week started with a bizarre incident in the Caspian Sea involving an Iranian commercial vessel and the Iranian military, an episode which threatened to expand the war by merging two conflict theatres.

Iran had accused Ukraine of attacking an Iranian commercial vessel by long-range drone in the Caspian Sea on Saturday, which resulted in an explosion that killed one sailor and injured another.

Soon after, Iran's Ministry of Foreign Affairs summoned Ukraine’s chargé d’affaires in Tehran to severely protest the "hostile and criminal" attack, IRNA reported.

Iran's Foreign Minister Abbas Araghchi has warned that the "blatant UN Charter violation" which was "done at Israel's behest" could serve to "drag Europe into its war." Araghchi also denounced and attacked Zelensky personally, calling him the "freeloader in Kyiv".

But on Tuesday, there was a rapid walk-back and climb-down of sorts regarding the whole murky incident.

Iranian Foreign Minister Abbas Araghchi newly stated that Ukraine's foreign minister assured him that the Ukrainian drone attack on the Iranian commercial vessel was "unintentional".

via Mappr

"Was assured by Ukrainian FM [Andrii Sybiha] that the attack on an Iranian ship was unintentional and Ukraine seeks no escalation," Araghchi wrote on X. "Iran does not seek escalation either, but made clear any attack on our citizens or interests is unacceptable. There must be restitution for losses."

Ukraine's top diplomat Andrii Sybiha‎ in turn didn't exactly deny it was an intentional attack; however, he did acknowledge that a civilian vessel was struck, and not a military one.

"I reiterated that all of Ukraine’s actions are aimed solely at defending our country from Russian aggression and never intended to target civilian vessels or people," Sybiha said after a call with Araghchi.

"This is also true with regard to Iran’s statements about their national who died and a civilian vessel that was targeted in a recent incident. Our goal is to counter Russian aggression, which is the root cause of all incidents, and it is Russia who bears full responsibility for all provocations and casualties," he added.

So it seems the two sides have agreed to downplay the attack incident and just move on. And yet what makes this bizarre and unexpected is that Ukraine seemed to initially be openly boasting of the escalation.

President Zelensky himself announced soon after on X, "We also have very good results from long-range strikes in the waters of the Caspian Sea. In particular, these are vessels that were involved in transporting military cargo from Iran, and a warship."

It is also perplexing how a long-range drone attack on a maritime vessel, presumably hundreds of miles away and which would require very precision targeting, could result in a direct hit and yet be 'unintentional'.

Anonymous (not verified) Wed, 07/29/2026 - 11:25

New Jersey Rejects DOJ's Request For Records On Noncitizen Voter Registration Error

Authored by Tom Gantert via The Epoch Times,

New Jersey is refusing to hand over information to the U.S. Department of Justice involving a voter registration error that allowed thousands of noncitizens to register to vote in the state.

The DOJ requested the full names, dates of birth, nationalities, residential addresses, and registration dates and locations of 6,600 people involved in the error.

New Jersey Gov. Mikie Sherrill rejected the DOJ’s request for the data, saying in a letter on Tuesday that state and federal privacy laws prohibit releasing it.

“The request had no legal basis, and I will always protect New Jerseyans’ personally identifiable information,” Sherrill said on X.

Harmeet K. Dhillon, the assistant attorney general for civil rights at the DOJ, said the governor’s “refusal to cooperate with federal law enforcement does nothing to protect law-abiding NJ voters.”

“NJ has a legal duty to keep ineligible voters off its rolls, & our request is grounded in that legal authority. DOJ will get this information through all legal means!” she said Tuesday in a post on X.

Sherrill said on July 21 that approximately 6,600 people who indicated they were not U.S. citizens were mistakenly registered to vote because of a software flaw in the state’s Motor Vehicle Commission system.

According to Sherrill, the error affected applicants between June 2023 and June 2024, during the previous administration. While applying for driver’s licenses or state identification cards, the individuals selected “no” when asked on a keypad whether they were U.S. citizens, but they were nevertheless added to the voter rolls due to the software issue.

The governor said a preliminary review found that fewer than 400 of those improperly registered ultimately cast ballots. Those voters included Democrats, Republicans, and unaffiliated voters and were spread across New Jersey.

Sherrill said she has directed her chief counsel to investigate how the mistake happened and instructed election officials to remove anyone who was improperly placed on the voter rolls during that timeframe. She said the software problem was corrected in June 2024 but that she only recently became aware of it.

The governor also said the Motor Vehicle Commission administrator she appointed has started replacing the vendor that managed the system.

However, a company that has worked with the New Jersey Motor Vehicle System for more than 40 years suggested the New Jersey government was responsible for the noncitizens being placed on the state’s voter rolls.

IDEMIA, an identification software provider, told The Epoch Times July 22 that the individuals disclaimed U.S. citizenship but also said they indicated “Yes” to wanting to register to vote.

“The voter registration information is transmitted to the New Jersey Department of State, Division of Elections, which is ultimately responsible for verifying eligibility to vote,” the company stated. “Information submitted by IDEMIA must still be validated and adjudicated by the Division of Elections.”

The governor said in the July 21 announcement that she was “appalled” by the failures that allowed the error to occur and vowed that those responsible would be held accountable.

She also accused the Trump administration of trying to “weaponize elections for political gain.”

The Department of Homeland Security (DHS) has found that about 278,000 noncitizens were illegally registered to vote in U.S. federal elections after reviewing voter rolls from several states that cooperated and turned over data, according to the White House.

The White House said earlier this month the actual number could be higher because some states did not share their voter files with the federal agency.

The Trump administration has been involved in lawsuits with several states involving access to voter registration rolls.

In April, a U.S. District judge dismissed a lawsuit the Trump administration had filed in Massachusetts to get access to unredacted voter rolls.

The White House said the error in New Jersey “is the direct result of Democrat policies that refuse basic citizenship checks—and exactly why Congress must pass the SAVE America Act immediately,” in a July 21 statement.

The SAVE America Act is a bill that would mandate proof of U.S. citizenship while registering to vote in federal elections, require photo ID verification to vote, and restrict the use of mail-in ballots.

Tyler Durden Wed, 07/29/2026 - 10:45

WTI Holds Spike After Big Crude Draw, SPR Drain Continues As Cushing Stocks Stuck At 'Tank Bottoms'

Oil prices are jumping higher after the U.S. military intercepted Iranian ballistic missiles aimed at American forces in Jordan.

Shortly after the surprise attack, the U.S. and Saudi Arabia launched strikes in Iraq against Iran-backed groups that the Islamic Revolutionary Guard Corps previously directed to attack American troops and Saudi energy infrastructure.

As Barron's Patrick O'Donnell reports, the escalation in hostilities hit market hopes that the vital Strait of Hormuz waterway would reopen. More than a quarter of the world's crude usually passes through the shipping channel and tanker traffic remains essentially halted.

"These developments throw cold water on the idea of a swift de-escalation in the Persian Gulf," analysts at ING said.

"Clearly, with Saudi oil infrastructure increasingly targeted, the risk of more prolonged supply disruptions grows."

President Trump this morning threatened to hit Iran “hard,” while the US and Saudi Arabia retaliated against militia and weapons sites in Iraq linked to Tehran.

Overnight, we saw API report a sizable crude draw but product builds (as the crack spread has eased somewhat)...

API

• Crude -3.3mm

• Cushing -300k

• Gasoline +900k

• Distillates +400k

DOE

• Crude -7.17mm

• Cushing -771k

• Gasoline +7k

• Distillates +1.06mm

The official DoE data shows a much larger crude drawdown than expected, and another drop in the stocks at the crucial Cushing Hub. Products saw small builds...

The Trump administration continues to drain the Strategic Petroleum Reserve

Cushing stocks remain near 'tank bottoms'...

US crude production remains just off record highs...

WTI is holding back above $84.50...

Finally, as Bloomberg's Michael Ball notes, the selloff earlier in the week was driven more by liquidation than normalization. Observable Hormuz traffic remains impaired, insurers and shipowners are cautious, not only through the Strait but now in the Red Sea. Trend-following funds cut Brent length sharply, while falling aggregate open interest shows positions were closed into heavy volume earlier in the week before the latest escalation.

The curve and options markets tell a similar story. Brent and WTI backwardation narrowed as longer-dated spreads fell to their weakest since mid-July, reflecting less urgency around prompt supply. Brent implied volatility dropped this week before firming again overnight. However, call skew retained an upside bias, something be justified by oil prices on the rise again.

The tighter market is in products. The European gasoil crack has surged above $70 a barrel as refiners run near capacity, with diesel and jet supplies constrained by outages, shipping risks and reduced Russian exports.

Crude stocks can rebuild quickly; refining capacity cannot. Headline prices remain sensitive to kinetic and diplomatic developments, while product scarcity and impaired shipping mean the bottom of a developing trading range will be higher than the recent lows suggest for now.

Tyler Durden Wed, 07/29/2026 - 10:36

An Interesting Divergence Is Emerging Between The Fed And Other Central Banks

By Benjamin Picton, senior market strategist at Rabobank

Circle Of Life

Active Brent crude futures fell by almost 5% yesterday as the US extended its pause on striking Iran. Donald Trump had indicated that the lull was underway to give diplomacy another chance, claiming that the US was in “very deep talks” with Iran but that his patience for progress was short, saying “either it goes fast or not at all.”

Brent has opened more than 3% higher this morning to follow overnight gains in WTI prices following Iranian missile strikes on a US base in Jordan – the first Iranian attacks since the recent ‘pause’ began – and joint strikes by the US and Saudi Arabia on Iran-backed militants in Iraq. Those Saudi-US came in retaliation for strikes on Saudi oil infrastructure. Israeli Prime Minister Netanyahu met with President Trump at the White House yesterday where the potential normalization of relations between Israel and Saudi Arabia was reportedly discussed.

Equity markets saw divergence yesterday between semiconductor stocks and value plays. South Korea’s KOSPI closed the day down 10.84% after triggering a market circuit-breaker early in the session, while Taiwan’s TAIEX index fell by 4.65%. Korean tech leaders Samsung and SK Hynix both fell by more than 10% as the latter posted record earnings but fell short of analyst estimates.

The chip selloff extended over to US markets, seeing the NASDAQ 100 fall by almost 1% to be off by close to 10% since the June highs. Sandisk, Seagate and Micron technologies were among the worst performers. The explanation offered by various newswires is that investors are becoming anxious about the large CAPEX programs of chip companies, including the ‘circle of life’ series of acquisitions and equity investments across the sector that critics suggest are keeping equity prices inflated beyond reasonable levels and raising the stakes for upcoming earnings reports.

Meanwhile, European stock indices were broadly higher, the S&P500 lifted 0.2% and the Dow Jones closed more than 1% higher. Among Asian indices the Australian ASX200 was a conspicuous outperformer, helped along by a relative paucity of tech names and an 8.6% gain for Viva Energy, who operates one of only two Australian oil refineries and reported an expected doubling of first-half earnings off the back of stronger refining margins. The expected earnings boost comes despite a 2% drop in fuel sales in the June quarter vs the prior corresponding period (June 2025). This was driven by a 4.7% drop in commercial and industrial fuel volumes, which might provide an insight into broader economic activity.

While geopolitical concerns simmer away, market attention will turn today to the FOMC, who meet to decide on the appropriate level of the Fed Funds rate. The overnight index swaps market currency has a touch over 8bps worth of rate hike priced-in for this meeting. The September meeting is now fully-priced for a 25bp hike, with another hike in the curve for March next year. In reality, few expect the Fed to raise rates at this meeting (we certainly do not), though we may see some FOMC members dissent in favour of lifting rates.

An interesting divergence is now emerging between the Fed under Kevin Warsh and other central banks. Warsh’s predilection for the Fed to “say less” contrasts with the approach of the RBA, who are busily implementing review findings encouraging better communication. The RBA recently published results of a survey it conducted which made the groundbreaking discovery that households’ primary economic concern is the rising cost of living (inflation) and that many individuals don’t have a firm grasp on the esoterics of monetary policy.

Given that the effectiveness of monetary policy transmission is related to the credibility of the central bank, the RBA views this as a problem for it to solve by communicating more effectively. Might we expect set-piece speeches like Governor Bullock’s appearance in support of the Anika Foundation yesterday to give way to TikToks?

Warsh, on the other hand, seems to take the view that the wizard retains more power if he remains behind the curtain. Saying less would neatly resolve the risk central bankers face of painting themselves into a corner when goaded into issuing forward guidance by enthusiastic journalists.

Bullock spent much of her speech yesterday rehashing the theme of repeated international shocks buffeting the supply side of the economy. Though Australia carried plenty of inflation momentum into the current oil shock, a tightening of global energy supplies has certainly exacerbated the problem and would have figured in the RBA’s decisions to raise the policy rate in March and May. There was some good news on the inflation front today though, with headline CPI in the year to June printing two ticks below market expectations at 3.8% and the core reading printing one tick lower than expected at 3.6%. The AUD and short sovereign yields are down substantially on the news.

Ultimately the great hope for overcoming the deleterious effects of geopolitical shocks on living standards is through strong productivity growth at home. AI holds the prospect of being something of a white knight on that score, but outside the US productivity growth remains anaemic and the link between huge AI CAPEX and improved productivity outcomes does not seem to be established in the top level data just yet.

While the promise is certainly there, the investment needs to result in inputs being converted to outputs more efficiently, and the physical materials needed for the fixed capital need to actually be available. In an age where semiconductor supply chains are being disrupted by energy and trade shocks, and important base materials like aluminium, copper, helium and nickel are physically constrained in the Strait of Hormuz shock (to say nothing of ongoing labour constraints!), converting those ‘circle of life’ CAPEX numbers into actual production might be easier said than done.

Tyler Durden Wed, 07/29/2026 - 10:30

BMW Targets 8,000 Job Cuts With New Voluntary Severance Package

BMW shares in Germany are down 36% so far this year, as the automaker's latest forecast downgrade was described by JPMorgan analyst Jose Asumendi as a "wake-up call for the auto industry."

The outlook for BMW continues to deteriorate, with Bloomberg reporting that the automaker will begin a sweeping workforce restructuring in Germany this fall.

Voluntary departures in Germany are expected to account for most of the roughly 8,000 positions BMW plans to eliminate globally, equivalent to about 5% of its workforce. The restructuring is aimed at reducing costs and strengthening the automaker's ability to compete with fast-growing Chinese rivals.

The report continued:

The offer will go out to staff in research, development, planning and other corporate functions, with factory floor workers not eligible, said the people, who asked not to be identified as the plans aren't public. BMW also is looking to streamline its management ranks in the coming months as part of the broader cuts, they said. 

The job reduction program will begin in October and run through 2027, with BMW anticipating a boost in profitability in 2028.

Shares in Frankfurt are marginally higher on the news after tumbling 36% so far this year, but they have stabilized over the last month around 60 euros per share.

This comes after last month's profit warning, in which a JPM analyst described the downgrade as a major "wake-up call for the auto industry" and warned that the German luxury automaker must address its compact-segment product strategy in China, where European premium automakers have been priced out of the market.

Asumendi called the downgrade a "radical earnings cut" but noted that BMW is generally executing well. He believes the automaker will likely take one-time charges to downsize its global production footprint, with a particular focus on Europe.

The restructuring comes as BMW contends with sliding sales in China and intensifying competition from EV manufacturers led by BYD, both in Europe and abroad. These pressures reflect a broader deterioration across Europe's auto industry, where soft demand, elevated production costs, and mounting Chinese competition continue to squeeze profitability.

Tyler Durden Wed, 07/29/2026 - 10:15

EssilorLuxottica's AI Smart Glasses Revenue Nearly Doubles On Ray-Ban, Oakley Demand

EssilorLuxottica shares rose as much as 4.5% in Paris before reversing course and falling 2%. The eyewear maker reported better-than-expected first-half profit margins, while revenue from its AI smart glasses nearly doubled in the second quarter, easing investor concerns over rising competition and component costs.

The Ray-Ban owner, which partners with Meta on smart glasses, reported a 13% increase in first-half adjusted profit to 1.9 billion euros, while its operating margin reached 18.6%, above the analyst estimate of 16.3%. Second-quarter revenue rose 8.7% at constant exchange rates to 7.69 billion euros, missing expectations due to weaker growth in North America.

Wall Street analysts called management's tone on the earnings call earlier today "optimistic" and "encouraging."

CFO Stefano Grassi noted, "There are good reasons to see a good trajectory on gross margin also for the second half." He told analysts about a pipeline of AI smart glasses set to hit the market.

EssilorLuxottica did not disclose second-quarter AI-glasses volumes, though management said growth was driven by its Ray-Ban and Oakley models developed with Meta.

EssilorLuxottica's smart glasses have emerged as early consumer-market winners by combining familiar eyewear frame designs with affordable pricing, unlike devices such as Apple's Vision Pro and other products priced above $2,000, even up to $3,000. The apparent sweet spot for mass-market adoption remains around $300 to $500 per unit.

Shares in Paris are down around 2%, after reversing gains of 4.5%. Year to date, shares have cratered, down about 39%. The reason for this is the durability of profit margins amid rising costs and intensifying competition. Analysts have also cited tensions among the heirs of founder Leonardo Del Vecchio as an additional overhang on the shares.

Here's what desks on Wall Street are saying (courtesy of Bloomberg):

Bernstein (market perform)

• The management's tone on the earnings call was "optimistic" regarding 2H, acknowledging harder comparatives, "but teasing a diversified innovation pipeline," analyst Luca Solca writes in a note
• The "positive outlook across both top line and margins reinforced on the call could bring the name back on investors' radars," even if the latest results seem "priced in"

Morgan Stanley (overweight)

• The 1H results are a "small relief following a series of downwards earnings revisions and the pressure on shares in recent months," analyst Grace Smalley writes in a note
• The management's tone on the call was "encouraging," outlining several growth drivers in 2H "while acknowledging the tougher comparison base, as well as pointing to ongoing solid cost control"

Citi (buy)

• The 2Q/1H results are mixed, "with worse sales but better margins," analyst Veronika Dubajova writes in a note
• The current valuation, which sits at the low-end of EssilorLuxottica's historical range, "already appears to discount forward sales growth"
• The better-than-expected adjusted Ebit "should diminish recent fears around margin progression/EPS momentum"

CFRA (buy)

• The results were mixed, with a slight miss on revenue and a beat on profit, analyst Wan Nurhayati says
• "We continue to see the strong adoption of AI glasses and the growth opportunity from Stellest supporting top-line momentum"
• However, Nurhayati believes the "rapid shift toward lower margin AI glasses remains a near-term margin headwind and could continue to weigh on the premium valuation the company has historically enjoyed"

Jefferies (buy)

• Analyst Julien Dormois says revenue in constant currency shows "resilient, high growth, even if slightly below cons"" * Additionally, Dormois views the first-half margin as "reassuring"
• "With the shares halving from Nov peak (margin reset, misplaced compet. fears, corp. gov.), we see a very compelling risk/reward into a quality growth compounder," the analyst writes

Bloomberg Intelligence

• "EssilorLuxottica's 1H adjusted Ebit margin rebound to 18.6%, a 233-bp beat, on price-mix and belated AI-glasses operating- leverage gains makes its 2H gross-margin expansion target feasible even without the net US tariff benefit, which added 60 bps in 1H," analyst Diana Gomes writes

Apple and Alphabet are also planning to enter the AI glasses market, with Meta currently in the lead.

Tyler Durden Wed, 07/29/2026 - 09:45

Idaho's High Desert Becomes Hot Spot For Nuclear Power Revolution

Authored by John Haughey via The Epoch Times,

History was made with the flip of a switch at 12:30 a.m. on June 4, under partly cloudy skies and a waning three-quarter moon in Idaho's Arco Desert, when a prototype reactor sustained a nuclear chain reaction, becoming the first new design to achieve "criticality," or viability, in the United States since 1973.

In that midnight milestone's wake, the future is following fast. Since Antares Nuclear's Mark-0 design was validated in early June, three other novel reactor designs have met the U.S. Department of Energy's criticality requirements and, according to Energy Secretary Chris Wright. Up to four more could do so by year's end.

While technologies, fuels, and applications vary, these prototypes share common traits. All are far smaller than the conventional reactors with massive cement cooling towers, and all are designed to be mass-produced, portable, and scalable. Several can fit in the bed of a pickup truck.

Most microreactor designs could be built in factories and shipped in cargo containers to locations around the world. Idaho National Laboratory

The nuclear energy surge is a convergence of rare bipartisan accord with stymied science and spiking electricity demand, spurred by power-hungry data centers and the integration of artificial intelligence and quantum computing into an electron-dependent world where the average U.S. home has 21 digital devices.

High-tech investors and hyperscalers are financing much of the innovation and pressuring the energy department to accelerate approvals to bring these new energy sources to market.

Not next decade.

Next year.

First-Movers

Antares Nuclear is one of 10 companies selected by the Department of Energy in August 2025 to develop "first mover" innovations under a reactor pilot program authorized by President Donald Trump. In four executive orders in May 2025, the president called for licensing 10 new reactors by 2030 and quadrupling the nation's nuclear energy capacity by 2050.

The United States maintains the world's largest nuclear power industry, with 96 reactors across 28 states that produce nearly 20 percent of the nation's electricity, according to the U.S. Energy Information Association.

But since 1990, while 18 reactors have been retired, only two new ones have been built in the United States, largely because of costs, long timelines, regulatory entanglements, and public perception after the Three Mile Island, Chernobyl, and Fukushima nuclear accidents.

Although deployments have languished for a half-century, nuclear technologies have advanced, with U.S. companies developing more than 30 new reactor designs. Meanwhile, successive administrations and Congress - in scarce consensus - have been deregulating and subsidizing the industry since 2024's ADVANCE Act adoption to meet a projected 25 percent increase in electricity demand by 2030 and more than 70 percent increase by 2050.

Criticality, a no-power proofing of theoretical physics, is generally the first step in being licensed by the Nuclear Regulatory Commission to produce and sell commercial nuclear reactors.

Trump's executive orders overhaul the commission and streamline approvals, meaning new reactors could be for sale within six months to a year, Wright said on June 25 in Idaho Falls after meeting with developers at the Idaho National Laboratory.

Qualifying for the pilot reactor program launched by Trump's executive orders, or for enrollment in the energy department's newly established nuclear launchpad program, gives developers access to the Idaho National Laboratory, an 890-square-mile sagebrush sprawl in the Arco Desert, where atomic power was first used to create electricity in 1951. Specifically, they gain access to the Materials and Fuels Complex, a 40-minute drive from the lab's Idaho Falls administrative offices.

Prototypes by Aalo Atomics and Valar Atomics also reached criticality under the pilot reactor program, while Deployable Energy did so as a launchpad participant. On criticality's "cusp" at the national lab and elsewhere are micro-reactors from Radiant Industries, Natura Resources, Last Energy, Atomic Alchemy, Deep Fission, and Oklo.

Antares Nuclear's Mark-O

When Antares's Mark-0 achieved functional viability on June 4, it became the 53rd reactor to reach criticality at the Idaho National Lab and the first non-lightwater reactor licensed in the United States since 1973.

The Torrance, California startup's shipping container-sized prototype, which utilizes sodium heat pipes for cooling without relying on external power, could produce up to 20 megawatts of electricity, or enough to power 15,000 homes, by 2027.

At the national lab on June 25, Wright told Antares CEO Jordan Bramble that seeing a structure where "wetted" sodium waste was treated transformed into a reactor test site in less than a year had made him so happy, he cried.

"I got emotional - emotional! - today to see the humans, the reactors, the steel, the action that's happening" at the lab site, he said. "To think on June 4 - less than 13 months after [Trump's executive orders] - that reactor ran critical [because] a three-year-old company said, 'Yes, we can. Yes, we will,' and leaned in."

Fueled by high-assay low-enriched uranium, Antares's prototype is in a 26-foot-deep, 26-foot-wide chamber and "over-shielded" under 11 cement slabs collectively weighing more than 200 tons.

Antares Communications Manager Kayla Haas said that when the company was founded in 2023, there were "three big things on the agenda": in 2026, secure Mark-0 criticality; in 2027, "produce electricity" with the next-generation Mark-1; and in 2028, "deploy reactors on customer sites."

"We're super excited to have checked the 2026 box," Haas said. "Now, we are shifting focus to our Mark-1 electricity-producing reactor that we'll test in 2027."

Backed by more than $140 million in private financing, Antares Nuclear owns a 322,000-square-foot plant in Southern California and offices in Aiken, South Carolina, and Idaho Falls. Its Mark-0 and Mark-1 reactors are ideally designed for defense and space applications.

The June 4 demonstration was conducted in partnership with Department of Defense nuclear fuels contractor BWX Technologies Inc. and observed by Pentagon officials. Antares is under contract to deliver micro-reactors to the U.S. Air Force's Joint Base San Antonio in 2027 and to the U.S. Army by September 2028.

Since 2025, Antares Nuclear has also been testing a 100-kilowatt reactor - enough juice for 65 homes - at NASA's Marshall Space Flight Center in Redstone Arsenal, Alabama, for potential use in space travel and as a moon base power plant.

The prototypes all share the same "base design," Antares Licensing Director Jason Andrus said, but testing in California, Idaho, and Alabama allows the company to integrate "learnings" into evolving designs and "do really kind of nerdy, nukey things."

Valar Atomics' Ward 250

Valar Atomics became the second to gain criticality, when its Ward 250 high-temperature, helium-cooled reactor sustained generation on June 18 at the San Rafael Energy Lab in Emery County, Utah. It is the only one of the four not to do so at the Idaho lab.

The El Segundo, California-based developer's 75-foot-long, 15-foot-wide micro-reactor could generate up to five megawatts of electricity, enough to power 5,000 homes, and be portable by truck, train, or plane. In February, the 120-ton Ward 250 was transported from California to Utah in a U.S. Air Force C-17.

Ward 250 is designed to be planted up to 80 feet underground and, because it is fueled by TRISO - a uranium fuel designed to prevent radioactive release - there's no need for large cement containment structures.

Valar followed criticality by using Ward 250 on July 1 to briefly power a website hosted on an Nvidia Blackwell AI chip. Nvidia is building a data center complex near Valar's factory in Orangeville, Utah, and has agreed to purchase up to 30 megawatts of electricity from the company by decade's end.

Deployable Energy's Unity

Houston-headquartered Deployable Energy's Unity reactor was the third new design, and second at the Idaho National Lab, to attain criticality in June, when it achieved operability at 11:55 p.m. on June 30.

Deployable founder and CEO Bobby Gallagher hauled Unity's reactor core, designed to fit in a 20-foot shipping container, from Texas to Idaho in a Ford F-150 pickup bed, proving its portability just by showing up at the lab.

The high-temperature, water-moderated, helium-cooled one-megawatt reactor - generating enough to power around 800 homes - is fueled with standard low enriched uranium, was built in partnership with Texas A&M University, and has drawn more than $10 billion in letter-of-interest queries "ranging from data centers to remote island community power," it maintains.

While one megawatt is not a lot of electricity, isolated communities, emergency responders, military installations, and industrial developers will see value in a reactor that can be "dropped in wherever you need it and left alone," Deployable Energy co-founder and Chief Commercial Officer Sanjay Mukhi said in late June, four days before Unity achieved criticality.

Deployable, which was only incorporated in 2025, was banking on that prospect when it was accepted into the reactor pilot program and arrived at the Idaho National Lab "150 days ago," he said, building a 340,000-square-foot structure dubbed "Studio 54," because it houses the 54th new reactor type to reach criticality at the lab.

Mukhi said one-megawatt reactors can be "scaled out" to meet tailored needs.

"We can deploy many at a time to meet the actual power requirements of specific sites," he said. "If you require 122 megawatts, instead of getting a 350-megawatt unit, you could actually get the exact power requirement and a little bit more."

The reactor, anchored in a 19-foot-deep basement chamber, looks like a laundry wash drum serrated by 696 holes where uranium rods will radiate heat in 63 gallons of water.

"It doesn't require a lot of water," Deployable co-founder and Chief Operating Officer Lance Maul said. "That's one of the other benefits to being able to go into different markets that have water restrictions."

Deployable's goal, he said, is to produce 1,000 reactors a year by decade's end and "by the mid-30s, 10,000 a year."

"That's the idea," Mukhi said. "From order to delivery, six months."

Aalo Atomics' Aalo-X

After Aalo Atomics of Austin, Texas, was selected to participate in the pilot program at the lab, the three-year-old startup's 200 employees built a 3,600-square-foot structure in 36 days. Then, over the next 40 days, they installed a 10-megawatt test reactor, which reached criticality 20 minutes into July 4.

"From founding to fission in under three years," Aalo spokesperson Ashley Cohen said. "One of the fastest reactor builds in modern American history."

It was the second-fastest build in history for a first-of-a-kind reactor, clarified Aalo co-founder and CEO Matt Lozak, and the swiftest in 80 years since Clementine, the world's first plutonium-fueled fast-neutron reactor, achieved criticality in November1946.

The test reactor is a full-scale prototype of its 20-foot-tall, 10-foot-wide Aalo-X micro-reactor - small enough to haul on a tractor trailer flatbed, big enough to power 10,000 homes.

Lozak projects that Aalo will be selling its next-generation 10-megawatt, 4.95 percent LEU-fueled Apollo X reactors at "commercial-scale" in 2027, and assembling its Aalo Pod power plants, which can house up to five 10-megawatt reactors, for commercial buyers by 2029 at its 40,000-square-foot Texas factory.

The Aalo Pod power plant will be mobile, won't need refurbishment for 40 years, and will be purpose-built to specifications - attributes the company says make it ideal for military, disaster response, and industrial applications.

Aalo co-founder and President Yasir Arafat noted that the Department of Energy has approved the company's request to build a data center on its national lab site.

"These things go hand-in-hand," he said. "AI is so power-hungry, and there's no better way to power AI than nuclear."

During a tour of the company's 2-acre site at the national lab, Lozak and Arafat said reaching criticality by July 4 would prove concepts key to their commercial model.

Mission accomplished.

"We proved all the major hard questions," Lozak said. "Can you construct? Yes. Can you build your reactor in a factory? Yes. We built our reactor in four weeks, did 80 percent of the installation within the first week in the factory, and shipped it across the country in two days."

Radiant Nuclear's Kaleidos

El Segundo, California-based Radiant Nuclear's one-megawatt Kaleidos reactor, designed to fit inside a 20-foot shipping container, is expected to reach criticality and then follow up with a 150-hour demonstration of sustained "hands off" operability this summer.

Kaleidos is installed in the Idaho lab's Demonstration of Microreactor Experiments (DOME), a 100-foot-tall structure on the Materials and Fuels Complex, where micro-reactors up to 20 megawatts were tested in the 1960s and '70s.

Radiant Nuclear President Tori Shivanandan said in late June that the company was engaged in "rigorous component testing on every single part of this system" it built inside the DOME.

The reactor's helium circulator, for instance, has received more than 150 start-stops "as though [it] just lost power" so the company can "understand that data prior to the system even shipping," she said. "We're still 'iterating' on the product."

There are five phases to reactor testing, Shivanandan said, "and we pause, we review the data, between each one."

Some Kaleidos components have undergone extensive testing at university labs nationwide, "but this will be the first time they're receiving dose under the full system, and so we want to again see 150 hours of what we call 'hands-off operations,' and monitor the environment, see what's going on," Shivanandan said.

The shuttered Three Mile Island nuclear power plant stands in the middle of the Susquehanna River near Middletown, Pa., on Oct. 10, 2024. Since 1990, only two new nuclear reactors have been built in the United States, in large part because of public perception after nuclear accidents such as the 1979 partial meltdown at the plant. Chip Somodevilla/Getty Images Tyler Durden Wed, 07/29/2026 - 09:30

Watch: Fauci's Invokes 5th, Lawyer Forcibly Removed From Hearing

Update (0920ET): As Dr. Anthony Fauci continues to invoke his 5th Amendment right not to incriminate himself - something we were all told he couldn't do due to his pardon by former President Joe Biden. 

The hearing kicked off at 8:30 a.m. EDT with Fauci appearing under subpoena from Chairman Rand Paul (R-KY). 

• Fauci’s opening statement: He invoked the Fifth Amendment and announced he would refuse to answer questions. He said it “pains” him to do so given his long record of cooperating with Congress, but he was following his attorneys’ advice. He accused Paul of an “obvious obsession” / “unhinged” campaign aimed at getting him “behind bars,” and said the hearing’s real purpose was to trap him into making statements that could support prosecution (especially perjury). He also criticized the recent public release of his personal diary entries as an effort to embarrass and intimidate him.
• Paul’s opening remarks: The chairman framed the session around COVID origins, NIH-funded research (including gain-of-function issues), inconsistencies between Fauci’s public statements and private diary notes, and accountability for the pandemic response. He noted that a presidential pardon does not rewrite history or prevent Congress from examining the facts.
• Questioning: As Paul (and possibly other senators) and others posed questions about origins, research funding, past testimony, and the diary, Fauci repeatedly responded along the lines of: “On the advice of counsel, I respectfully decline to answer based upon my rights under the Fifth Amendment of the Constitution.”

Paul went ballistic on Fauci's lawyer for speaking when he was not recognized, and then had security remove him.

Fauci lawyer is removed- round of applause pic.twitter.com/sZroNpcAAs

— Karli Bonne’ 🇺🇸 (@KarluskaP) July 29, 2026

Watch:

* * *

Dr. Anthony Fauci is testifying today before the Senate Homeland Security and Governmental Affairs Committe, after Chairman Sen. Rand Paul compelled him via subpoena. 

Fauci, the former longtime director of the National Institute of Allergy and Infectious Diseases (NIAID) at NIH (1984–2022) and a leading public face of the U.S. COVID-19 response, is appearing as the sole witness.

So far: 

•  Fauci is invoking his 5th amendment right not to incriminate himself by answers Paul's questions - something legal scholars widely expressed he could not do leading up to the hearing. 

"Although it pains me to do so, because of the respect I have for the Legislative Branch for government, and my decades-long record of cooperating with Congress, under the advice of my attorneys, I will invoke my right under the Fifth Amendment of the Constitution to refrain from answering your questions," Fauci, 85, repeated over and over.

Paul reminded Fauci that it's illegal "to refuse to answer any questions pertinent to the question under inquiry."

🚨 JUST IN: Sen. Rand Paul just told Dr. Fauci to his face it's ILLEGAL to incessantly plead the 5th Amendment and refusing to answer relevant questions when testifying before the Senate under subpoena

PROSECUTE NOW!

PAUL: "Section 192 of Title II of the U.S. Code...that… pic.twitter.com/uXE2jLNNeE

— Eric Daugherty (@EricLDaugh) July 29, 2026

It's too bad Fauci is refusing to answer questions:

pic.twitter.com/XgNdlsUIHL

— zerohedge (@zerohedge) July 29, 2026

This marks another round of congressional scrutiny of Fauci since his 2022 retirement, centered on long-running criticisms of pandemic-era decisions and messaging. Key focuses include:

• COVID-19 origins: Whether NIH-funded research (including work connected to labs in China) played any role, versus the prevailing scientific view of a natural zoonotic spillover (likely amplified at the Wuhan wildlife market). Paul has long pressed lab-leak possibilities and alleged inconsistencies in Fauci’s public statements.
• Recently released diary entries: Paul made public more than 1,000–1,500 pages of Fauci’s personal notes from the pandemic years. Critics highlight passages they say differ from Fauci’s public comments (e.g., early notes on the virus and the market); Fauci’s attorneys have called the related allegations baseless.
• Broader issues of public-health messaging, school closures, gain-of-function research debates, and Fauci’s interactions with officials across the Trump and Biden administrations.

House Oversight Chairman James Comer and others have noted that a prior presidential pardon does not cover potential false statements in today’s testimony. Fauci has previously rejected claims of lying or cover-ups as preposterous; scientists and supporters have defended him ahead of the session.

Tyler Durden Wed, 07/29/2026 - 09:00

DOJ And Trump Ask Supreme Court To Review $83.3 Million Carroll Verdict

Authored by Matthew Vadum via The Epoch Times,

The U.S. Department of Justice (DOJ) asked the U.S. Supreme Court on July 28 to intervene in the defamation dispute between President Donald Trump and writer E. Jean Carroll.

The DOJ is arguing in the petition in United States v. Carroll that the federal government - not Trump personally - should be the defendant in the case that led to an $83.3 million verdict against Trump.

At the same time, Trump’s private attorneys filed a petition with the high court in the case of Trump v. Carroll, asking the justices to review the same verdict, largely on grounds of presidential immunity.

The DOJ’s petition, a copy of which was obtained by The Epoch Times, focuses on the federal Westfall Act, which shields federal employees from personal liability for common law tort lawsuits arising from their government employment.

Common law refers to the body of law developed over centuries by court rulings, as opposed to statutes passed by legislatures. A tort is a wrongful act or infringement of a right that gives rise to civil liability.

When the U.S. attorney general certifies that a federal employee—including a president—was acting in an official capacity, the United States is usually substituted as the defendant, and the individual ends up being dismissed from the lawsuit.

The $83.3 million verdict arose from statements Trump made in mid-2019 while he was president, in which he denied Carroll’s allegation that he sexually assaulted her in the mid-1990s. Trump denied the claim in an official White House statement and again when speaking to reporters—statements the jury found defamatory.

In 2020, then-Attorney General William Barr, who served in Trump’s Cabinet, certified under the Westfall Act that Trump’s statements were within the scope of his official duties. As a result, the case, which had been pending in New York state court, was transferred to federal court. Then in 2023, then-Attorney General Merrick Garland, who served in President Joe Biden’s Cabinet, took the unusual step of withdrawing the certification, the petition said.

This allowed the lawsuit to move forward against Trump personally, after which the jury found for Carroll, rendering the $83.3 million verdict.

While an appeal was pending, Trump was reelected, and in April 2025, his attorney general appointee, Pam Bondi, recertified Trump’s conduct and made a motion to substitute the United States as the defendant in the case. The Second Circuit blocked Bondi’s recertification, an action the DOJ argues the court was not entitled to take.

The DOJ also argues the Second Circuit misinterpreted the Westfall Act.

“This petition presents the question whether the Westfall Act contains an implicit timing restriction barring the Attorney General’s posttrial recertification. Such a restriction does not exist,” the petition said of Bondi’s action.

If the United States replaces Trump as the defendant, Carroll’s defamation claim would almost certainly fail. The Federal Tort Claims Act, which covers lawsuits against the government, specifically excludes defamation claims.

The DOJ urged the Supreme Court to take the case, arguing it raises potentially significant institutional stakes.

Trump may have to pay almost $100 million in damages and interest “for issuing a press release and answering reporters’ questions, from the White House, defending against attacks on his fitness for office,” the petition said.

Trump’s petition in Trump v. Carroll argues that the Second Circuit was wrong to treat presidential immunity like an ordinary legal defense that can be lost if not raised in time, and that the appeals court didn’t actually decide whether immunity protected Trump’s 2019 statements.

If the Second Circuit’s “mistreatment of Presidential immunity and the Westfall Act” are not corrected, there will be reverberations far beyond this case, as the threat of a single judgment for damages based on official acts will prevent presidents from “fearlessly” executing their duties, the petition said.

The $83.3 million verdict is separate from a prior $5 million civil verdict Carroll secured in 2023. In that case, a jury found Trump liable for sexually abusing Carroll in the 1990s and for defaming her again in 2022 when he was out of office.

The Supreme Court recently declined to take up Trump’s challenge to the $5 million verdict, but Trump has asked the court to reconsider its ruling.

It is unclear whether the Supreme Court will take up the two new petitions.

Tyler Durden Wed, 07/29/2026 - 08:35

Futures Rise Despite Oil Spike And Ongoing Korean Collapse, Ahead Of Fed, Meta And Microsoft

US equity futures are higher, overlooking both tech-led declines in Asia which saw the Kospi crash as much as 13% and trigger a second consecutive 20 minute market-wide halt, and the 5% jump in oil prices which has pushed Brent over $88. As of 7:30am ET,  S&P 500 and Nasdaq 100 contracts are each up 0.2%, reversing sharp overnight losses, with tech flipping from laggard to leader and reversing (for now) a chip rout overnight which saw SK Hynix plunge 7.6% after tumbling 17% the session prior. With hyperscaler earnings today (MSFT and META), JPMorgan's trading desk - which has incorrectly called the bottom in the chip rout almost every day in the past month - asks if "perhaps we finally establish a floor within the Tech trade."  Semis are higher pre-market with Mag7 mixed. Overnight, Korea / Semis took another leg lower with JPM’s Mixo Das seeing the levered ETF unwind in its 9th inning (90% complete). Defensives are leading Cyclicals (ex-Tech & Energy) with the Energy bid returning on news of renewed attacks in the Middle East. In fact, oil is trading 5% higher at session highs (above $83 for WTI and above $88 for Brent) which is pushing bond yields up 1-2bp as the curve flattens, USD is weaker. Today's macro focus is on the Fed (read out preview here). Most banks (but not Citadel) expect the Fed to hold with two or more hawkish dissents; the market is pricing a 32% chance of a hike.

In premarket trading, Mag 7 stocks were mostly, if modestly, higher: (Alphabet +0.6%, Amazon +0.1%, Apple +0.2%, Meta +0.3%, Microsoft +0.2%, Nvidia +0.1%, Tesla +0.2%)

• Avantor (AVTR) rises 4% after the life-sciences company reported adjusted Ebitda and net sales for the second quarter that beat the average analyst estimate. The company also boosted its adjusted profit guidance for the full year.
• Bloom Energy (BE) jumps 8% after the fuel-cell maker posted earnings that were more than double expectations and raised full-year guidance for the second consecutive quarter, a sign of rampant demand from data centers.
• Caterpillar (CAT) falls 4% after Baird cut its recommendation to neutral, citing a growing trend of state and local government actions targeting data centers, which have become a key growth driver for the industrial giant.
• Ford (F) rises 5% after the automaker raised its profit outlook for the second time this year as consumers continue to snap up the automaker’s high-margin sutility vehicles.
• Garmin (GRMN) climbs 7% after the maker of GPS smartwatches boosted its pro forma earnings per share guidance for the full year.
• GE Healthcare (GEHC) climbs 11% after the maker of X-ray equipment reported adjusted earnings per share for the second quarter that beat the average analyst estimate. The firm also posted a booking ratio that was ahead of expectations.
• GlobalFoundries (GFS) gains 7% after the semiconductor contract manufacturing and design company signed a letter of intent with the US Department of Commerce.
• Humana (HUM) drops 7% after the insurer maintained its yearly profit guidance despite a strong second quarter.
• Johnson Controls International (JCI) rises 5% after after the HVAC equipment maker boosted its adjusted earnings per share forecast for the full year
• KLA Corp. (KLAC) falls 8% after the semiconductor capital equipment company reported fourth-quarter results that Morgan Stanley called “uninspiring.”
• Lemonade (LMND) falls 12% after the insurance company reported less customers for the second quarter than analysts expected. It also said Nick Stead, the company’s senior vice president finance, will replace Tim Bixby as CFO effective Jan. 1.
• Manhattan Associates (MANH) rises 11% after the software company reported second-quarter results that beat expectations, prompting an analyst upgrade.
• O-I Glass (OI) is down 13% after the manufacturer of packaging products reported adjusted earnings per share for the second quarter that missed the average analyst estimate.
• Procter & Gamble (PG) slips 3% after giving a conservative outlook for its current fiscal year, highlighting the challenges the maker of Downy fabric softener faces as consumers retrench.
• Seagate Technology (STX) gains 5% after the computer hardware and storage company reported fourth-quarter results that beat expectations and gave a revenue forecast that is ahead of the consensus estimate.
• Teradyne (TER) gains 7% after the semiconductor manufacturing company reported second-quarter results that beat expectations and it gave a third-quarter forecast that is much stronger than expected.
• Vertiv (VRT) falls 14% after the power equipment company’s net sales missed estimates.

In other corporate news, Cigna must defend against most claims of a proposed class action alleging the health insurer disclosed the personal information of patients to third parties in violation of federal and state privacy laws. Visa said it’s taking a $563 million charge tied to job cuts affecting about 7% of the workforce, part of an effect to operate more efficiently and focus on its biggest opportunities for growth. Canada plans to scrap a levy on entertainment companies including Netflix and Walt Disney, according to a court filing, after pushback from US officials and Hollywood studios

Futures are tentatively higher, ignoring a continued tech rout in Korea, and surging oil, but as Bloomberg notes, price action at this stage of the session likely offers little insight into how equities will trade over the next 24 hours, with the FOMC policy announcement and Meta and Microsoft earnings later. Stripping away the ongoing meltdown in the chip/memory bubble, the equal-weight version of the S&P 500 reached another record high in Tuesday’s cash session and themes of rotation, divergence and dispersion continue. Of course, nobody cares about that; instead what people do care about is that the high beta momentum index, which we warned at the start of the month would have a terrible July...

High Beta Momentum is disintegrating in July. Every July https://t.co/7jnnW8v7Yt pic.twitter.com/lc2IhHG7yQ

— zerohedge (@zerohedge) July 2, 2026

... had a terrible July, and is on track for the biggest monthly drop on record in data going back to 1999, eclipsing the dot-com era, while an equal-weight version of the Nasdaq 100 is trailing the S&P 500 Equal Weight Index by the most in two decades of data.

As always, AI remains in the spotlight, with SK Hynix shares crashing - again - after forecasting a record outlay of at least $31 billion for capital spending this year, a jump of around 50% year-on-year, adding to concerns that tech companies are overinvesting in AI.  The pace of capex growth mirrors a similar trajectory at rival Micron, and with hyperscalers capex’ bills projected to exceed a $1 trillion next year, some analysts estimate memory could account for more than a third of that. 

Update: SK Hynix last 3 days "price discovery"

7/27: +2.13%
7/28: -16.16%
7/29: -7.61% https://t.co/sEikDsiNIo

— zerohedge (@zerohedge) July 29, 2026

The biggest loser from the latest SK Lonix rout was, of course, Korea's Kospi which slid as much as 12.6%, triggering a circuit breaker for a second straight day, and is on course for a record monthly loss of ~35%. And just when you thought it couldn't get any more farcical, South Korea’s finance minister apologized on Wednesday after retail investors racked up heavy losses from leveraged bets on stocks, following rule changes earlier this year. The May 27 introduction of single-stock leveraged Exchange Traded Funds has seen Korean retail investors pile in with net purchases of 14 trillion won ($9.7 billion), compared with roughly 2 trillion won by foreign investors, according to KB Financial Group. But the speculative trading boom that helped fuel one of the world’s hottest equity markets has resulted in those investors nursing catastrophic losses, leaving millions liquidated after margin calls, that have seen thousands owing money to their banks after being wiped out. 

And while we wait to find out just how many millions of broke and margin called Koreans will participate in the next season of Squid Games, we have a Fed decision later today where traders are eyeing the possibility of a surprise hike as patience with high inflation wears thin, and Chair Warsh’s avoidance of the past practice of giving signals on the future rates path. JPMorgan' Market Intel analysis shows a 28% probability of the central bank keeping rates unchanged, while sounding accommodative on the inflation outlook. This would trigger gains of 0.5% to 1% in the S&P 500 Index, the team said (full analysis here).

“It’s really rare to have the market split just hours ahead of a Fed decision,” said Amélie Derambure, a senior multi-asset portfolio manager at Amundi. “That means some investors will necessarily be hurt. A hike could have harsh consequences on equities if it announces a fresh cycle.”

Earnings from Meta and Microsoft arrive as the AI trade is faltering, with traders questioning whether the vast and often debt-fueled spending behind the buildout of the technology can deliver adequate returns. “I hope that Meta and Microsoft can confirm the capex spree in the industry and reassure the market about semiconductors,” said Fares Hendi, a portfolio manager at Société de Gestion Prévoir in Paris.

In other AI related news, the OpenAI models that hacked the startup Hugging Face this month also gained access to a customer account on the cloud platform Modal and used it to launch attacks, underscoring the broad scope of the incident. Meta CEO Mark Zuckerberg said the US administration should not block Chinese models to gain an edge in the AI arms race, in an interview with the Financial Times. It follows Nvidia CEO defending open-weight AI models earlier on Tuesday. And Moonshot AI secured a $35 billion valuation after raising $3.5 billion in a round of financing, exceeding its initial target of $1 billion to $2 billion.

Elsewhere, Washington tightened curbs on some foreign-made robots and inverters, vital components of solar-powered electricity, in a sweeping move that risks widening its tech confrontation with Beijing less than two months before a meeting between the countries’ leaders.

In the latest Iran escalation news, Brent jumped to session highs after Iran fired pre-emptively on American forces overnight and the US and Saudi Arabia struck Tehran-backed militias in Iraq, ending a days-long pause in hostilities. Elsewhere, Reuters reported that Iran is expected to receive within weeks a first shipment out of up to 400 Chinese-made shoulder-fired air-defense missile launchers, as it rebuilds its defenses amid war with the United States. 

Initial gains in European stocks faltered with the Stoxx 600 down 0.2%, following a flurry of earnings as Hermes weighs after missing expectations for its key leather goods unit. Real estate and retail sectors fall the most and energy and miners are the biggest gainers. Here are some of the biggest movers on Wednesday:

• Deutsche Bank shares jumped 6% after the German lender reported strong earnings supported by a fixed-income trading beat and announced a share buyback of €500 million.
• Reckitt shares jump as much as 7.4% after the maker of Dettol and Durex delivered better like-for-like sales growth than expected in the second quarter, with the core business accelerating more than anticipated, according to analysts at Barclays.
• Kering shares gain as much as 12% after the luxury goods maker reported better-than-expected revenue at Gucci in the second quarter.
• UBS shares gained 3.7% after the Swiss lender announced a new $3 billion share buyback program and reported second-quarter earnings that analysts said were strong.
• Sopra Steria shares jump as much as 17% after the IT firm boosted its organic revenue forecast for the full year.
• Porsche shares rise as much as 4.8% after the German carmaker posted what analysts called a strong set of results, including an operating profit beat driven by sales of its 911 model.
• BASF shares rise as much as 4.3% after the chemicals company announced a new €1 billion buyback program and beat EPS expectations.
• Electrolux shares gain as much as 23% after the Swedish home appliance manufacturer’s second-quarter earnings exceeded estimates and the company lowered its capex forecast.
• RWE advances as much as 4.4%, the most since mid-March, after delivering preliminary second-quarter results ahead of expectations and lifting its guidance for both 2026 and 2027.
• Endesa shares gain 2.4% after the Spanish electricity company reported net income for the first half that beat the average analyst estimate.
• Hermes shares fall 8.1% as the French maker of the Birkin bag missed analyst expectations for its key leather goods unit and was punished by investors.
• DWS shares plunge as much as 8.9% after the asset management firm posted pretax profits below expectations in the second quarter as heavier costs weighed, with analysts noting the strong share price performance leading into the print.
• CaixaBank shares fell as much as 6.7% after the Spanish bank’s second-quarter results missed expectations for net interest income.
• Auto1 shares fall as much as 16% after the German used-car retailer reported second-quarter results that Morgan Stanley analysts said leave it needing a stronger second half to achieve management’s full-year goal.

Earlier in the session, Asian stocks declined as a selloff in heavyweight chipmakers deepened, and oil prices rebounded following a fresh round of fighting across the Middle East. The MSCI Asia Pacific Index lost 0.7%, with shares of SK Hynix plunging almost 10% to be among the biggest drags. The firm’s quarterly profit fell short of lofty estimates despite surging sixfold, and its plan to spend at least $31 billion on capital expenditures intensified existing market worries that companies are overinvesting in AI capacity. Samsung, which is due to report results Thursday, also saw its stock slump more than 5%. TSMC slid 3.5%. South Korea’s Kospi index swung wildly again, tumbling 13% intraday before closing 6% lower. The declines in tech-heavy indexes in Korea, Taiwan and Japan outweighed gains in places like India and some Southeast Asian markets, which have relatively less exposure to the AI theme.

“The deleveraging and selloff in Korea have increasingly taken on a life of their own,” said Rajeev De Mello, global macro portfolio manager at Gama Asset Management. “Concerns about excessive optimism around AI initially triggered the correction in semiconductor stocks, but the latest acceleration lower looks less driven by fundamentals and more by positioning, forced selling and investor psychology.”

Sentiment was also cautious ahead of the Federal Reserve’s rate decision later on Wednesday. While the central bank is expected to hold, market participants are eyeing the possibility of a surprise hike as patience with high inflation wears thin. “Investors have re-focused on the downside surprise to earnings, and also recognized the constraint of the Fed decision,” said Damien Boey, portfolio strategist at Wilson Asset Management. A gauge of Chinese stocks listed in Hong Kong jumped more than 2% to be the top gainer in Asia on Wednesday. Still, the MSCI Asia Pacific was on course for its lowest close since April 23, having slumped 3.4% in the previous session, when it also entered a technical correction.

In FX, the Bloomberg Dollar Spot Index is fractionally weaker, while the Aussie dollar is the standout laggard following soft CPI data.

In rates, firmer crude prices have weighed on global fixed income markets, with US yields up around 1bp across the curve and those of EGBs up slightly more.

In commodities, oil is back on the rise, with Brent crude futures up 3.7% as fighting erupted once again in the Middle East. Spot gold and silver are posting respective gains of 0.2% and 1.3%. Bitcoin adds 0.9%. 

Looking to the very busy day ahead, the main event will be the Fed’s policy decision. The attention will then shift to the earnings from Microsoft and Meta after the US close. Before that, we also have Lam Research, ARM, L’Oreal, Hermes and Airbus. 

Market Snapshot

Top Overnight News

• Brent rose after Iran fired on American forces overnight and the US and Saudi Arabia struck Tehran-backed militias in Iraq, ending a days-long pause in hostilities. BBG
• Iran is expected to receive within weeks a first shipment out of up to 400 Chinese-made shoulder-fired air-defense missile launchers, three sources familiar with the deal told Reuters, as it rebuilds its defenses amid war with the United States. BBG
• Iran rejected a proposal to evenly divide control of the Strait of Hormuz, jeopardizing hopes that Tehran and Washington would quickly resume negotiations to end the war. WSJ
• South Korea will hold an emergency meeting Wednesday evening to discuss the market situation after a stocks rout that has wiped billions of dollars off investors’ holdings. BBG
• SK Hynix shares slumped after the company missed lofty expectations while committing at least $31 billion in capex this year. BBG
• The US plans to end a subsidy program that helped hold down costs for Medicare drug plans. BBG
• The Senate voted 86-12 to advance a bill that would empower Trump to impose tariffs on major buyers of Russian energy, as well as Iran, with a final vote possible later this week. BBG
• Wall Street banks have demanded more collateral from hedge funds in recent weeks as a rout in AI stocks accelerates and triggers heavy losses across several popular strategies. FT
• Moonshot secured a $35 billion valuation after raising a larger-than-anticipated $3.5 billion in a just-closed round of financing, people familiar said. BBG
• US President Trump posted "Senator Johnson is working hard with Senate Republican leadership to adopt a budget resolution before the August recess. This is the first step towards getting as much of the Save America Act as possible in the budget bill..". Full post: "Senator Ron Johnson is working hard with Senate Republican Leadership to adopt a Budget Resolution before the August recess. This is the first step towards getting as much of THE SAVE AMERICA ACT as possible in a Budget Bill, funding our Troops, and helping our Farmers. I am calling on the Senate to get this critical first step done before the August recess. This Resolution can be adopted at a simple Majority threshold. GET IT DONE! Thank you for your attention to this matter. President DONALD J. TRUMP".
• Majority of US Senate votes to confirm Trump nominee Jay Clayton to be the Director of National Intelligence.

A more detailed look at global markets courtesy of Newsquawk

APAC stocks were choppy with mixed, two-way trade seen as bourses initially began on the front foot as an initial tech rebound helped the region shrug off the geopolitical risks following the Iran attack on a US base in Jordan, although the tech-related gains were eventually wiped out. ASX 200 bucked the trend amid outperformance in defensives and as participants reflected on Rio Tinto's earnings and softer-than-expected inflation data, which saw an unwinding of RBA rate hike bets. Nikkei 225 initially rallied amid early tech momentum and reports the government will finalise a food sales tax cut next month, but then slipped into the red as tech stocks reversed course. KOSPI suffered at the whim of tech fluctuations, with stocks initially buoyed following mixed results from SK Hynix, which beat on Q2 net, but missed on oper. profit and revenue, stoking concerns of lofty expectations, despite oper. profit jumping 557%. However, the index then slumped and eventually triggered circuit breakers. Hang Seng and Shanghai Comp were mixed, with the Hang Seng driven by Chinese automakers/EV names, while the mainland is subdued amid ongoing trade-related frictions.

Top Asian News

• South Korean Lawmaker said Finance Minister, BoK Governor and Financial regulatory Chiefs to meet on Thursday afternoon.
• Japan's Chief Cabinet Secretary said Govt. will not pre-determine whether to use reserve funds for earthquake relief.
• Japanese PM Takaichi plans to cut food sales tax to 1% for two years starting April 2027, while government will finalise plan in August.

European Bourses began the session on a softer footing but remain relatively resilient to the firmer oil prices and prior APAC weakness, with earnings also providing somewhat of a cushion/impetus in the absence of macro updates. The IBEX 35 (-1.6%) underperforms following CaixaBank results, while the FTSE 100 (+0.1%) outperforms on earnings, including Rio Tinto, and a strong Glencore production update, whilst heavyweights BP and Shell cheer the higher oil prices. Sectors are mixed, with resilience across the board despite energy strength and prior APAC weakness, while sentiment remains capped by ongoing memory concerns and China competition following KOSPI volatility. Movers: SK Hynix (-9%) weighs on sentiment after earnings miss lofty expectations. In Europe, Kering (+12%), Gerresheimer (+5%), Eni (+4%), Deutsche Bank (+4%), BASF (+4%), Rio Tinto (+4%), UBS (+3%), Glencore (+3%) and Standard Chartered (+3%) gain after earnings. To the downside, ASM International (-8%), Hermes (-8%), CaixaBank (-6%), Aberdeen (-5%), Remy Cointreau (-4%) and EssilorLuxottica (-2%).

Top European News

• UK Net Lending to Individuals MoM (Jun) M/M 9.5B vs. Exp. 5.5B (Prev. 4.6B).
• UK Mortgage Lending (Jun) 7.73B vs. Exp. 3.95B (Prev. 2.89B).
• UK Mortgage Approvals (Jun) 58.20K vs. Exp. 56K (Prev. 56.21K).
• UK M4 Money Supply MoM (Jun) M/M 0.8% vs. Exp. 0.2% (Prev. 0.1%).
• UK BoE Consumer Credit (Jun) 1.807B vs. Exp. 1.7B (Prev. 1.662B).
• Italian Industrial Sales YoY (May) Y/Y 5.3% (Prev. 3.2%).
• Italian Industrial Sales MoM (May) M/M 0.60% (Prev. 0.3%).

FX

• DXY is relatively uneventful within a narrow band ahead of the FOMC, despite the overnight geopolitical escalation which saw crude gap higher. The index trades within a 101.23-101.49 range, holding broadly flat as markets priced around a 36% probability of a hike, with focus on the Fed decision and Chair Warsh’s presser.
• JPY modestly firmer overnight on potential haven demand following geopolitical tensions and APAC equity weakness, though USD/JPY came off best levels and now trades around the middle of a 163.28-163.88 range, below the prior session’s trough of 163.64.
• EUR holds a mild upward bias amid a subdued Dollar, with EUR/USD just below 1.1400 and trading within a 1.1382-1.1404 range. Newsflow is light from the bloc, with a smaller-than-expected softening in German import prices and a modest increase in the ECB Wage Tracker failing to move the needle.
• GBP trades with a modest upside bias in rangebound conditions, oscillating around the 1.3300 mark within a 1.3277-1.3307 range. Focus turns to the BoE on Thursday, where a hold is expected, with attention on the vote split and guidance and then the press conference.
• Antipodeans are mixed, with AUD under pressure after softer-than-expected inflation data prompted Westpac to shift its RBA view to a prolonged hold (vs prev. view of an August hike). AUD/USD trades at the bottom of a 0.6943-0.6979 range. NZD is relatively cushioned by AUD/NZD downside but remains soft overall, with NZD/USD in a 0.5775-0.5794 range.

Fixed Income

• USTs are modestly softer, down by a handful of ticks, as geopolitical escalation and firmer energy prices weigh on the space. The contract remains comfortably above recent lows at 108-15+ and 108-12+, with focus turning to the FOMC where a hold is expected, though risks are tilted hawkish amid the recent rise in energy, and with markets implying a 30-35% chance of a hike.
• Bund are under pressure, down around 15 ticks, with only a fleeting lift seen on softer German import prices (6.1% Y/Y vs prev. 6.8%). The benchmark trades just above a 124.95 low, holding above Tuesday’s 124.93 base. No move was seen to the 2036 Bund auction, which was moderately weak but showed slightly better underlying demand compared to the prior.
• Gilts are lower, opening down 16 ticks before extending losses to an 87.08 base, taking out Tuesday’s trough but remaining above Monday’s 86.83 low. Price action is largely driven by the broader energy-led move, with limited UK-specific catalysts.
• Germany sold EUR 4.5bln (exp. 6bln) 3.00% 2036 Bund: b/c 1.1x (prev. 1.03x), average yield 3.13% (prev. 3.09%) & retention 25.05% (prev. 35%).

Commodities

• Crude futures are firmer after gapping higher overnight on escalating geopolitics, with Iran striking a US base in Jordan and subsequent US-Saudi strikes on Iranian-backed militia. WTI Sept’26 and Brent Oct’26 hit highs of USD 83.30/bbl and USD 85.63/bbl respectively, before waning as the US had not yet officially retaliated to the Jordan strike. Dutch TTF found resistance at EUR 59.50/MWh, then support at EUR 58/MWh, stabilising around EUR 58.50/MWh. Prices rose further after sources said Yemen's Houthis are considering imposing fees on commercial ships transiting the southern Red Sea.
• Precious metals are firmer but to varying degrees, supported by geopolitically driven haven demand amid a flat/subdued Dollar, though upside is capped ahead of the FOMC. Spot gold trades within a USD 4,010-4,047/oz range, while spot silver posts larger gains but remains off the USD 58.53/oz peak, within a USD 56.85-58.23/oz range.
• Base metals are mixed to subdued as geopolitical tensions weigh on the growth outlook. 3M LME copper trades within a narrow USD 13,584.00-13,690.90/t range, while iron ore prices waned overnight amid weak steel demand concerns.
• Egypt aims to drill 160 new oil and gas wells with investments of USD 7.2bln, according to Al Arabiya.
• US invests USD 1bln to combat New World Screwworm outbreak,a ccording to Agricultural Secretary Rollins.
• US Private Inventory Data (bbls): Crude +3.3mln (exp. -1.4mln), Distillates +0.4mln (exp. +0.6mln), Gasoline +0.9mln (exp. -1.2mln), Cushing -0.3mln.

Trade/Tariffs

• US tariffs are sending some firms back to China, NYT writes.
• UK Foreign Secretary Miliband will play a “greater role” in the UK's Brexit reset talks than previous foreign secretaries, the FCDO told POLITICO.
• China Commerce Minister held a call with the UK Trade Secretary and said China is willing to strengthen cooperation in service trade, green transition and renewable energy. said:. Highly concerned about nationalisation of British steel and urged the UK to abide by relevant international rules. Urged favourable business environment for Chinese enterprises in the UK.
• China's MOFCOM said regarding US putting Chinese research institutions on sanctions list, that it is aware of the situation and strongly dissatisfied and firmly opposes this. said:. China urges the US to stop smearing Chinese research institutions, correct its approach, and provide fair, impartial, non‑discriminatory treatment. China will take necessary measures to safeguard the legitimate rights of its research institutions and to protect normal scientific exchanges and cooperation.
• Trump administration bans foreign made robots and power inverters amid fears of Chinese influence, according to POLITICO.

Geopolitical - Iran

• US CENTCOM said US and Saudi forces strike Iran-backed terrorist sites in Iraq.
• Iranian state TV cites an unnamed military source stating that Iran denies any link to projectiles fired from other countries at targets in Saudi Arabia.
• Chinese Foreign Ministry denies reported that Iran will received Chinese-made man-portable air defence systems in the coming weeks.
• Iran official said Oman proposal for Hormuz Strait joint regional management is to fail.
• Iran will get Chinese shoulder launched missile systems in weeks, according to Reuters.
• US President Trump said in a tele-rally that Iran wants to make a deal so badly, adds we'll get Iran to sign on the dotted line and we'll get the war over with.
• US CENTCOM said at 17.45EDT, IRGC forces launch multiple ballistic missiles from Iran and all Iranian missiles were effectively intercepted.
• US official said Iran launched missiles at a US base in Jordan, but noted missiles were intercepted, according to Axios.
• Iran considered retaliatory strike on Ukrainian seaport, although a flurry of diplomacy has eased tensions, according to NYT citing officials.
• US official said Iran is over reaching with demands that Oman, US and the international community are rightly rejecting on Strait of Hormuz. Deal being discussed is a coordination deal, there are no tolls and no fees.
• Iraq PM's planned visit to Saudi Arabia tomorrow has been cancelled, Iraqi government source tells Al-Araby.
• A senior Iranian official said Tehran has rejected Oman's proposal for regional joint management of the Strait of Hormuz as unworkable, reported suggest.
• Iraqi sources said US and Saudi Arabia targeted a mosque and water purification plant in Baghdad.
• IRGC noted that 3 tankers were hit and seized in the Hormuz Strait, adds US interference in the region will not go unanswered.
• Explosions were heard in south Baghdad, while reported noted US and Saudi strike in Kirkuk and Salah Al-Din.
• Israeli PM Netanyahu said meeting with Trump is one of the best we've had.
• IRGC confirmed that they fired ballistic missiles at the US Air Base and US Military Central Command Center in Jordan.
• US President Trump posted that he had a very good meeting with Israeli PM Netanyahu and many important subjects were discussed.
• Explosions reported in Al-Suwayrah, Wasit province South of Baghdad.
• Source circulates 'footage of a direct hit on Muwaffaq Al Salti Air Base in Jordan'.
• IRIB reported explosions in Jordanian airspace and that US base in Jordan was possibly targeted.
• Iranian media sources report explosions in US base in Jordan due to Iranian missile attack.
• Three Japanese-linked vessels have exited the Strait of Hormuz via Iran's designated route, Kyodo reported.
• An Israeli military source said Defence Minister Katz disclosed operational details about the takeoff of US fighter jets from Israel to carry out strikes on Iran, Al Hadath reported.
• Several loud explosions are being reported in Jordan, according to Nour News.
• Sources said Yemen's Houthis are considering imposing fees on commercial ships transiting the southern Red Sea.

Geopolitical - Ukraine

• Ukrainian President Zelensky said forces struck Russian oil refinery in the Perm region, export terminal and military plant in Rostov region.
• Russian forces hit two vessels carrying weapons to Ukrainian ports near Odesa, according to Russia's defence ministry.
• Ukrainian President Zelensky said had a very good meeting with US President Trump and that Trump accepted that he'll give Ukraine licenses for Patriot missiles.
• US President Trump posted that it was a great honour to meet with Ukrainian President Zelensky and that the meeting went well with many things discussed.
• Large majority of US Senate voted to advance Russian energy sanctions, with the bill targeting Russian officials and oil-dependent nations.

US Event Calendar 

• 7:00 am: Jul 24 MBA Mortgage Applications, prior 1.9%
• 2:00 pm: Jul 29 FOMC Rate Decision Upper Bound est. 3.75%, Lower Bound est. 3.5%

DB's Jim Reid concludes the overnight wrap

As we head towards a highly anticipated Fed decision this evening, over the past 24 hours markets were again caught in the crosswinds of volatile oil prices and an ongoing chip rout. A continued decline in oil prices had won out yesterday, with a -4.83% decline in Brent crude helping the equal weighted S&P 500 (+1.14%) to a new record high and the regular S&P 500 (+0.21%) also advancing even as the Philly semiconductor index fell -4.49%.

However, sentiment has soured overnight as the US said that it intercepted an Iranian attack against its bases in the Middle East, ending a pause in the fighting that had seen Brent crude decline from above $100/bbl last Thursday to only $84.09/bbl at yesterday’s close, marking its sharpest three-day decline (-16.5%) since April 2020. Iran’s IRIB News reported that missiles were fired in response to “aggressive US actions”. This comes as the US and Saudi Arabia carried out strikes on Iran-backed militants in Iraq in response to recent drone strikes. IRIB also reported that the IRGC targeted three tankers in the Strait of Hormuz “moving along an unsafe and illegal route”. With the news raising the risk of a return to a full war, Brent crude is trading about +4% higher as I type.

Together with a continued sell-off in chip stocks, this has weighed on the mood in Asian markets this morning. The KOSPI (-8.65%) is seeing another dramatic sell-off, triggering a circuit breaker for the second time in two days after tumbling by -11.0% yesterday. A reassessment in Korea’s AI-driven valuations has been boosted by results from semiconductor heavyweight SK Hynix, which is down -16.5% as its +557% surge in quarterly profits failed to meet elevated market expectations. Shares in Samsung, which reports tomorrow, are down -11.0%. The Nikkei (-2.29%) is also extending Tuesday’s decline, while in mainland China the CSI 300 (-0.24%) and Shanghai Composite (-0.50%) are posting more modest declines. In contrast, the Hang Seng (+1.34%) is outperforming the broader regional trend, while the S&P/ASX 200 (+1.10%) is advancing after softer-than-expected inflation data eased concerns about further RBA tightening (details below). Equity futures are also losing ground, with those on the S&P 500 (-0.20%), NASDAQ 100 (-0.62%) and STOXX 50 (-0.58%) all lower.

All that leaves a volatile backdrop ahead of today’s FOMC decision, which is the most finely poised in years in terms of market pricing. With a 32% chance of a rate hike today priced as of last night, this is the most uncertain that the market has been on whether the Fed will change rates going into a meeting since December 2018, when the eventual 25bps rate hike was about 65% priced the day before. We’ve seen considerable volatility in the July hike pricing over the past couple of weeks, falling as low as 10% in mid-July following the soft June US CPI print but rising to as high as 38% on Monday. So with Chair Warsh shying away from policy guidance, we’ve seen one regime shift compared to the past few years when markets received a steer from officials’ commentary or via the financial press.

In terms of today’s decision, our US economists expect the Fed to leave rates unchanged but see the risks of a hike as significant with the renewed escalation in the Middle East complicating the inflation outlook. If the Fed holds rates steady, they expect at least a couple of dissents in favour of a hike.  

Prior to the overnight moves, a continued fall in oil prices had dominated yesterday’s market action, as more positive signals on Iran negotiations stabilized inflation concerns. Trump said in an interview with Fox News that the US had a “strong position” and that Iran has essentially agreed to not have a nuclear weapon but would now need to make it formal. Markets reacted positively to his comments as well as reports of continued talks between Iran and Oman over control of the Strait of Hormuz, with front-month Brent crude down -4.83% and 6-month Brent sliding by a sizeable -3.60%.

That helped markets to dial back near-term inflation pricing. The 1 yr US inflation swap (-5.3bps) retreated to 1.88%, while the 1yr Euro inflation swap continued to post bigger declines (-13.8bps to 2.28%). In turn, Treasury yields pulled back across the curve with 2yr yield down -3.5bps to 4.29%, while the 10yr yield fell -4.3bps to 4.61%, which was actually its biggest daily decline in over a month. And this time real yields also fell, with the 10yr (-3.5bps to 2.41%) real yield retreating from Monday’s post-2023 high.
The decline in oil and rates also helped support equities, with the S&P 500 closing +0.21% higher. And the broader market mood was more clearly positive, with the equal-weighted version of the S&P (+1.14%) posting its best day in over a month and hitting a new record high. This came amid a broad rotation into non-tech and defensive sectors, though it was partially offset by continued losses for chipmakers. A -4.49% decline for the Philly semiconductor index left the gauge -24.6% below its June 22 high, though it is still up +55.8% YTD. Yesterday’s decline also left the NASDAQ 100 (-0.98%) just half a percent from technical correction territory. But it was not all bad news for tech yesterday, with Apple (+0.94%) exceeding the $5trn market cap for the first time, though it ended the session just below it at $4.995trn. The company is set to report its earnings tomorrow along with Amazon, after reports from Microsoft and Meta this evening.

In Europe, the market mood was positive yesterday, with the Stoxx 600 up +0.35% as the CAC 40 (+0.61%) and FTSE 100 (+0.83%) and DAX (+0.41%) all saw decent gains. Optimism over lower oil-driven inflation also boosted sovereign bonds, with yields on 10yr gilts (-5.2bps), OAT (-4.0bps), and bunds (-2.9bps) all heading lower. Outperformance of French assets was helped by an improved consumer confidence reading for July (86 vs 84 prev., 85 exp.) but this is still below the level that prevailed before the Iran war.

Ahead of the Fed decision, we also had some data releases out in the US. US July consumer confidence saw an unexpected decline to 90.8 (vs 92.4 expected), as the present situation component fell to its lowest level since early 2021. More positively, US house prices increased in May in both the FHFA (+0.3% m/m vs +0.1% m/m exp.) and S&P Case-Shiller (+0.15% vs 0.00% expected) indices, though this improvement comes after house price growth fell to effectively zero during the Feb-Apr period. As I discuss in my latest note on money and credit yesterday, housing looks more vulnerable to the recent move higher in yields. The report (see here) also dives into what the credit cycle suggests for policy direction of the G4 central banks as well as in China, where the Politburo meeting will be in focus later this week.

In data out this morning, Australia’s consumer price index (CPI) rose +0.6% qoq in Q2 (vs. +0.7% expected and +1.4% in Q1), supported by easing fuel prices. Annual inflation moderated from +4.0% to +3.8% yoy. Annual core inflation edged up from +3.5% to +3.6%, but remained below the consensus estimate of +3.7%, reducing the urgency for additional interest rate hikes after the RBA already raised rates three times this year. Following the release, yields on 2yr Aussie government bonds are down -8.3bps to 4.49%, with markets paring back the chance of a rate hike next month to just 2%, from 18% previously. The Australian dollar is down -0.40% against the US dollar.

To the day ahead now, the main event will be the Fed’s policy decision. The attention will then shift to the earnings from Microsoft and Meta after the US close. Before that, we also have Lam Research, ARM, L’Oreal, Hermes and Airbus. Data releases include UK June net consumer credit, M4, Germany June import price index, Italy May industrial sales, Australia June CPI, Sweden Q2 GDP indicator.

Tyler Durden Wed, 07/29/2026 - 08:15

Trump Admin Asks SCOTUS To Revive Mail-In Voting Order Ahead Of Midterms

Authored by AG News Staff via American Greatness,

The Trump administration asked the Supreme Court on Monday to let the president's mail-in voting executive order take effect ahead of the midterms, after a federal appeals court sided with Democrat-led states seeking to keep it blocked just months before Election Day.

Trump signed the order in March, directing the Postal Service to restrict delivery of mail-in ballots in states that refuse to hand over lists of eligible voters. It also orders the Department of Homeland Security and Social Security Administration to compile lists of verified absentee voters for the Postal Service to reference, and threatens to withhold federal funds from states that do not comply, part of a larger effort by the president to tighten a mail voting system he has long argued is vulnerable to abuse.

A federal judge in Massachusetts blocked the order in June, ruling that its timing made it impossible for the Postal Service to propose the rule through proper channels and would deny Congress its required chance to weigh in. The 1st U.S. Circuit Court of Appeals upheld that ruling Saturday, rejecting the administration's appeal and leaving the order blocked in the 23 states and Washington, D.C., that sued to stop it.

In Monday's filing, Solicitor General D. John Sauer argued the injunction improperly impedes the president's authority over the executive branch, noting the Postal Service falls within it despite its independent structure. Sauer warned that further delay could make the order impossible to implement in time for November even if the administration ultimately wins on appeal. "Every day that the agencies are unable to take steps to carry out the Executive Order as to the November 2026 election makes it less likely that they will, as a practical matter, be able to implement any lists or rules that they ultimately finalize, even if they obtain appellate relief," the filing states.

The order is one piece of a larger push by Trump to overhaul election security, an effort that has repeatedly run into resistance from federal judges. Trump has also urged Congress to pass his SAVE America Act, which would restrict mail voting and require identification to cast a ballot, though the legislation has stalled on Capitol Hill despite mounting pressure from the president.

Trump devoted a primetime address earlier this month to laying out his concerns about election interference, releasing declassified documents alongside the speech. Trump used the address to direct federal agencies to investigate a Michigan get-out-the-vote operation and to examine whether intelligence officials withheld information about Chinese efforts to influence the 2020 election.

Tyler Durden Wed, 07/29/2026 - 08:05

Gulf Bond Boom: Record Borrowing Fuels Race To Future-Proof Against Hormuz Shutdown

Gulf monarchies are hitting international debt markets at a record-shattering pace, Bloomberg figures show, amid a conflict-driven rush to harden domestic infrastructure and forge alternative supply corridors that bypass the vulnerable and effectively closed Strait of Hormuz. Added to this, just this month, Red Sea passage has become another problematic area, as the Houthis have targeted several Saudi vessels with missiles and drones.

Regional heavyweights led by the UAE and Saudi Arabia are seeking massive funding for new or expanded deep-water ports along the Red Sea and Gulf of Oman, backed by desert networks and crude oil pipeline bypasses. This modernization will take years, but is being hastened by the urgency of war.

As Bloomberg reports Tuesday, "Borrowers from the United Arab Emirates are tapping global bond markets at a record pace as the Middle East conflict rages, with sales up a third so far in 2026 versus year-ago levels."

Image via Global Capital 

The underlying totals underscore the unprecedented size of the paper issuance:

"Sovereigns and companies from the UAE, a federation of seven emirates, have sold a combined $30.3 billion of dollar- or euro-denominated bonds this year through July 28, according to data compiled by Bloomberg. That’s about $3.7 billion above the previous record for this period hit six years ago."

This is consistent with our analysis from April, just a little two months into Trump's Iran "excursion" - as he was calling it at the time, which saw the world's largest bond manager, PIMCO (Pacific Investment Management Co), step in amid the emerging Gulf scramble to find buyers for its bonds.

More broadly among regional Gulf Cooperation Council (GCC) states, bond sales have exploded to a record $112 billion so far this year, according to Bloomberg data, with government debt desks actively probing international banks for additional leverage.

When the US-Israeli war on Iran originally flared and reached a peak in March and April, regional banks froze fundraising and market participants retreated into defensive capital preservation mode to gauge the economic fallout.

But in the wake of the April 8 ceasefire - which was eventually extended before collapsing by mid-summer, UAE lenders drove the charge to tap global capital markets, with UAE-based institutions claiming five of the eight major capital market transactions completed in Q2.

Chart: Ed Clowes/Semafor, Source: Bloomberg

According to UAE's English-language daily Khaleej Times:

Emirates NBD became the first Gulf lender to tap international capital markets after the outbreak of the conflict, issuing $750 million in additional Tier 1 (AT1) capital on May 1. The offering attracted strong investor demand, with subscriptions reaching three times the amount offered despite ongoing market volatility, according to the bank.

First Abu Dhabi Bank (FAB) emerged as the region’s most active debt issuer during the quarter. In June, the lender completed two senior debt transactions under its $20 billion euro medium-term note programme, including a €750 million ($858.3 million) three-year green bond and a separate $300 million issuance.

The quarter also featured a notable equity transaction from Sharjah Islamic Bank, which raised Dh2.59 billion ($704.8 million) through a rights issue. The bank said the offering was more than 3.2 times oversubscribed, with the Government of Sharjah fully subscribing to its allocation while remaining shares attracted subscriptions exceeding 4.5 times the amount available.

Gulf capitals are looking to ensure in a long-term way that even if regional maritime flashpoints flare up or traditional choke points get closed down, the vital flow of energy exports and trade keeps moving along uninterrupted. This is one of the bigger 'lessons' of this ongoing costly Washington adventurism, given it has been largely Gulf infrastructure that's had to absorb the bulk of Iran's retaliation pain.

Tyler Durden Wed, 07/29/2026 - 07:45

Birkin Bag Maker Plunges Most Since 2010 As Soft China Demand Weighs On Leather Sales

Hermès shares in Paris suffered their steepest intraday decline in nearly 16 years after second-quarter leather goods sales missed estimates among analysts tracked by Bloomberg, reigniting concerns over the luxury group's large exposure to the Chinese market. 

Second-quarter sales in the leather goods division rose 10.2% at constant exchange rates, missing the Bloomberg Consensus estimate of 10.7%. Overall revenue increased 6.7% to about 4.1 billion euros, slightly ahead of estimates, driven by 13.7% growth in the Americas.

Here's a snapshot of 2Q Earnings:

Sales at constant exchange rates +6.7%, estimate +6.51% (Bloomberg Consensus)

• Leather goods sales at constant exchange rates +10.2%, estimate +10.7%
• Watches revenue at constant exchange rates +4.4%, estimate +0.17%
• Perfumes revenue at constant exchange rates -9.5%, estimate -1.47%
• Silk and Textiles revenue at constant exchange rates +12.2%, estimate +7.5%
• Ready-to-Wear and Fashion revenue at constant exchange rates +3.6%, estimate +3.53%
• France revenue at constant exchange rates +6.2%, estimate +3.78%
• Total Europe revenue at constant exchange rates +7.4%, estimate +6.89%
• Japan revenue at constant exchange rates +12.3%, estimate +10.7%
• Asia Pacific revenue at constant exchange rates +2.5%, estimate +3.2%
• Asia revenue at constant exchange rates +4.4%, estimate +4.51% (2 estimates)
• Americas revenue at constant exchange rates +13.7%, estimate +13.9%

UBS analyst Zuzanna Pusz wrote in a note to clients that her initial takeaway from the earnings call was "softer messaging on leather," suggesting management had adopted a more cautious tone toward the key division.

Pusz continued:

Subtle shift in messaging may raise questions on medium-term targets

At the Group level, results were broadly in line with expectations, however one of the key concerns was softness in the Leather Goods division (OSG of +10% vs. cons. & UBSe of +11%). In our view, management's commentary is unlikely to provide much shortterm reassurance. When asked about the MT growth algorithm and prior guidance for FY26 (6-7% volumes + 6% pricing), management stressed that the framework cannot be reduced to a simple combination of volume growth and price/mix, arguing that such an approach would be overly simplistic ignoring the regional pricing and productivity. Although the company reiterated robust demand for its handbags and reaffirmed its ambition to continue expanding volumes, the shift in messaging may be interpreted as a subtle softening of its commitment to previously assumed MT growth targets.

Tourism drag becomes harder to ignore in France

Management reiterated that France remains more exposed to tourism than the rest of Europe, helping explain the weaker performance relative to Europe ex-France. French stores are said to have been affected by lower tourist flows, particularly from the Middle East, which continued to weigh on Parisian locations, with the impact estimated at c.- 1.5ppt to Q2 growth, unchanged from Q1. By contrast, Europe ex-France remained strong, supported by Italy, Northern Europe, Germany, Greece and the UK following its recent space expansion. While local demand in the Middle East remained resilient, trends in concession markets were more mixed. Overall, management's comments suggest tourism, particularly Middle Eastern spending, remains an important swing factor, while growth is increasingly supported by strong local demand in markets such as the US, Japan, Korea and parts of Europe.

There are multiple factors underpinning the strength in margins

One of the key positives from the release was the strength of the EBIT margin, which came in at 41.0% (vs. consensus of 40.4%). While management unsurprisingly refrained from providing near-term guidance, it highlighted healthy product sellthrough rates without any build-up in inventories. The company also pointed to a favourable contribution from FX hedges in H1, while noting that the H2 impact will depend on where exchange rates ultimately settle. In addition, Hermès reiterated its intention to step up investments in communication and marketing initiatives to support customer recruitment, alongside continued expansion of its sales teams in key markets such as the US, Japan and South Korea. On raw material costs and pricing, management indicated that price increases in 2027 are likely to be somewhat lower than those implemented in 2026.

Jefferies analysts led by James Grzinic told clients that "the ongoing lack of growth in China" remains a major concern for the stock. The luxury industry has been under pressure for several years as Chinese consumers dial back on spending, inflation weighs on discretionary demand and conflict in the Gulf region disrupts regional shopping hubs and tourism flows.

China, once a key growth driver for the sector, remains under pressure. Hermès Executive Chairman Axel Dumas said the market is showing signs of stabilizing but has yet to stage a meaningful recovery.

"I see a stabilization of the Chinese market, but I don't see a fundamental rebound yet," Dumas said during the earnings call, adding that Hermès continues to grow in the country, but at a slower pace than in recent years.

The disappointing earnings report sent Hermès shares tumbling as much as 11% in Paris, the steepest intraday decline since Oct. 10, 2010. The stock has fallen to levels last seen in 2023 and has nearly halved since peaking in early 2025.

Here's what other desks on Wall Street are saying (courtesy of Bloomberg):

Citi (neutral)

• Thomas Chauvet says misses in the leather and perfumes divisions offset strong performance in silk & textiles, watches, France and Middle East
• Expects limited changes to FY26 consensus sales and Ebit

Deutsche Bank (buy)

• Adam Cochrane says firm delivered "solid" 2Q performance, which was modestly ahead of expectations
• Adds that "quality of growth was mixed," with Americas particularly strong as well as Japan accelerating, while Europe was softer than expected 
• Highlights rising gross margin helped offset higher operating expenses

Jefferies (buy)

• James Grzinic says "more critical to the debate will be the extent to which the ongoing lack of growth in China may also reflect the group restricting the supply of some products in that market"

RBC (outperform)

• Piral Dadhania notes that, by region, there are "no major surprises with Other less bad than feared"

Sector-wide, the Goldman Sachs European Luxury Index has largely stalled over the past three to four years.

UBS remains "Neutral" on Hermès, with a 1,795-euro 12-month price target.

Professional subscribers can read more on luxury here at our new Marketdesk.ai portal

Tyler Durden Wed, 07/29/2026 - 07:20