TL;DR

US PPI jumps above forecast; Fed cut odds trimmed; BlackRock Bitcoin ETF tops $90B AUM.

Highlights

• US July Producer Price Index (PPI) rose 0.9% MoM and 3.3% YoY, both well above forecasts; core PPI up 0.9% MoM (3.7% YoY), driven by services inflation 1.
• Initial jobless claims dipped to 224,000; continuing claims fell to 1.953 million, signaling a still-stable labor market 5.
• Fed funds futures price in a 92–96% chance of a 25bp rate cut in September, but odds of a larger move have faded after the hot PPI 3.
• Treasury Secretary Bessent clarified he is not calling for aggressive Fed cuts and ruled out gold revaluation or crypto purchases for reserves 418.
• White House considering Section 232 tariffs on imported generic drugs, citing national security and supply chain concerns 6.
• Bridgewater Associates exited all US-listed Chinese equities (~$1.4B), reallocating into US tech, AI, and select consumer names 10.
• Apple restored blood-oxygen monitoring to US Apple Watches via software update; Masimo shares fell on the news 8.
• Ulta Beauty and Target to end their 600-store partnership in August 2026; both stocks traded lower on the announcement 9.
• BlackRock’s Bitcoin ETF (IBIT) surpassed $90B AUM, with spot Bitcoin ETFs now holding ~6.5% of BTC supply 12.
• US Treasury will halt sales of its $15–20B bitcoin reserve, removing a source of supply from the market 2.
• Coinbase acquired Deribit for $2.9B, expanding into crypto options 11; Citigroup is considering stablecoin and crypto ETF custody services as banks move toward dollar-backed stablecoins under the GENIUS Act 1315.
• CoreWeave shares fell 10% as post-IPO lockup expired, pressuring other recent listings 17.

Commentary

A hotter-than-expected July PPI print is weighing on risk sentiment, with both headline and core readings sharply above consensus and services inflation leading the move 1. Treasury yields rose and the dollar gained as traders reassessed the likelihood of aggressive Fed easing 1. However, futures still overwhelmingly price in a 25bp rate cut for September, with bets on a larger cut now off the table 3. Labor market data remains steady, with jobless claims still in the range that signals stability, but the combination of sticky inflation and only gradual cooling in employment complicates the policy outlook 5.

Sector-specific news is driving notable moves. Apple ’s restoration of blood-oxygen monitoring to US Apple Watches removes an overhang ahead of new product launches, while Masimo shares dropped on the workaround 8. The decision by Ulta and Target to end their partnership in 2026 is pressuring both stocks and raises questions about future beauty retail strategies 9. Bridgewater’s exit from US-listed Chinese equities and rotation into US tech and AI names underscores persistent geopolitical and regulatory risks tied to China exposure 10.

Digital assets remain in focus. BlackRock’s Bitcoin ETF has crossed $90B AUM, intensifying a supply squeeze as the US Treasury halts bitcoin sales and spot ETFs hold a growing share of circulating Bitcoin 122. Coinbase ’s acquisition of Deribit strengthens its position in crypto derivatives 11, while traditional banks like Citigroup are preparing to enter stablecoin and crypto ETF custody, responding to the new GENIUS Act 1315. Regulatory clarity is expected to be a near-term catalyst, with the SEC set to outline new digital asset rules 14.

Traders should watch for late-session volatility in rate-sensitive sectors, crypto-linked equities, and consumer names exposed to supply chain or trade policy shifts. The interplay between inflation data, Fed expectations, and sector rotation will likely drive market direction into the September FOMC.