1. U.S. and Russia Complete Prisoner Swap
2. U.S. Jobless Claims Surge
3. Bank of England Cuts Rates for First Time in Over 4 Years
4. U.S. Stocks Tumble Despite Fed Rate Cut
5. Ackman’s Hedge Fund Shelves IPO
6. Amazon and Apple Earnings Carry Heavy Market Weight
7. Amazon Shares Drop 5% After Earnings Report
1. U.S. and Russia Complete Prisoner Swap
Sources revealed that Russia has agreed to release Wall Street Journal reporter Evan Gershkovich and former U.S. Navy officer Paul Whelan. The two will first be transferred outside of Russia, while the U.S. will reciprocate by sending several convicted individuals back to Russia.
Previously, Russia accused both men of illegal espionage, which they and the U.S. government firmly denied. Evan was detained in Russia in March last year and sentenced to 16 years in prison last month—the first such conviction of a U.S. journalist on spying charges since the Cold War.
Former Navy officer Paul Whelan was arrested in 2018 and sentenced to 16 years in 2020.
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2. U.S. Jobless Claims Surge
Data released today by the U.S. Department of Labor shows that, for the week ending July 27, initial jobless claims rose by 14,000 to 249,000—nearing a one-year high, signaling continued cooling in the labor market. Michigan and Missouri saw the largest increases.
Ongoing claims also rose to 1.88 million—the highest since November 2021—indicating growing difficulty in finding new employment.
Fed Chair Jerome Powell noted that the unemployment rate remains near historic lows, and these numbers do not suggest broader economic weakness.
Now that hiring has clearly slowed, many data points show the labor market has returned to pre-pandemic levels.
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3. Bank of England Cuts Rates for First Time in Over 4 Years
Today, the Bank of England voted 5–4 to cut its benchmark interest rate by 25 basis points to 5%, marking its first rate cut since early 2020.
Following the announcement, the British pound reversed its earlier losses against the dollar, and UK government bonds gained. Traders now expect three rate cuts from the central bank this year.
The Bank did not specify a target range for the benchmark rate or commit to a pace of cuts, stating that decisions will depend on incoming data.
The Bank of England has now followed in the European Central Bank’s footsteps and completed its first rate cut.
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4. U.S. Stocks Tumble Despite Fed Rate Cut
ewly released data revealed signs of economic weakness in the U.S. While Treasury yields fell on rising rate-cut expectations, equity markets suffered a sharp correction.
The 10-year Treasury yield fell below 4%. Swap traders are now pricing in three Fed rate cuts this year, and those expectations are already reflected in the market.
Even though rate cuts could benefit corporate operations, growing cracks in the economy caused markets to plunge.
Today, the S&P 500 and Nasdaq fell by 2% and 3%, respectively; the Russell 2000 dropped 3.5%, while the VIX “fear index” surged toward its yearly high.
If the labor market continues to slow excessively, the Fed may be forced to cut rates more aggressively.
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5. Ackman’s Hedge Fund Shelves IPO
Billionaire hedge fund manager Bill Ackman announced yesterday that his firm Pershing Square is abandoning its IPO plans.
Initially, Pershing Square aimed to raise $25 billion in the offering, but the company lowered its target twice within a week—ultimately cutting it to just $2 billion. Now the IPO is canceled altogether.
Reasons cited for shelving the IPO include concerns about post-listing share performance. Some interested institutional investors preferred to wait for cheaper prices after the stock started trading.
Pershing Square charges a 2% management fee and 16% performance fee.
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6. Amazon and Apple Earnings Carry Heavy Market Weight
At the end of the day, tech giants Apple and Amazon are set to report earnings. Until Nvidia’s highly anticipated results at the end of August, these two companies are carrying the burden of setting the tone for market sentiment and tech stock performance.
During regular trading hours today, Amazon and Apple shares both fell more than 2%. Since debuting iPhone AI features in June, Apple shares have gained over 10%. Year-to-date, Amazon stock is also up 20%.
Analysts believe Apple’s outlook for future iPhone sales and its AI strategy are more important than last quarter’s revenue numbers.
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7. Amazon Shares Drop 5% After Earnings Report
After the market closed today, Amazon released its much-anticipated latest earnings report.
In Q2, Amazon Web Services (AWS) revenue grew 19% to $26.3 billion, beating expectations and marking a second consecutive quarter of acceleration.
The company expects operating income between $11.5 billion and $15 billion for Q3, falling short of analysts’ $15.7 billion forecast. Revenue is projected between $154 billion and $158.5 billion, in line with expectations.
CEO Andy Jassy remains focused on cost-cutting and boosting profit margins in Amazon’s core e-commerce business, while also heavily investing in AI. Amazon said successful AI expansion could generate billions in new revenue.
After the report was released, Amazon shares fell 4%, mainly due to profit expectations falling short for Q3.
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This content is sourced from Financial Times, Bloomberg, and The Real Deal, among other financial news outlets.