Economy

$75 per monthComplete digital access to quality FT journalism with expert analysis from industry leaders. Pay a year upfront and save 20%.What’s included Global news & analysisExpert opinionFT App on Android & iOSFT Edit appFirstFT: the day’s biggest stories20+ curated newslettersFollow topics & set alerts with myFTFT Videos & Podcasts20 monthly gift articles to shareLex: FT’s flagship investment column15+ Premium newsletters by leading expertsFT Digital Edition: our digitised print edition More

The U.S. unemployment rate jumped to near a three-year high of 4.3% in July amid a significant slowdown in hiring, fuelling concerns fears that the labor market was deteriorating and potentially making the economy vulnerable to a recession.BofA Global Research brought forward its expectation of the first cut to September from December, while other major brokerages now expect the Fed to cut rates in all the three remaining meetings of the year. Here are the forecasts from major brokerages after the July unemployment data:New rate cut estimates Old rate cut estimates (in (in bps) bps) Sept Nov Dec Sept Nov Dec Goldman 25 Sachs 25 25 25 25 BofA Global Research 25 — 25 — — 25 UBS 50 25 Global Wealth 50 25 Management J.P.Morgan 50 50 25 — — — Wells 25 Fargo 50 50 25 25 Nomura 25 25 25 25 25 Deutsche Bank 25 25 25 25 25 25 Morgan Stanley 25 25 25 25 25 25 Citigroup 50 50 25 25 25 25 TD Securities 25 25 25 — — — Peel Hunt 25 25 25 25 — 25 Barclays 25 25 25 25 25 * UBS Global Research and UBS Global Wealth Management are distinct, independent divisions in UBS Group More

The announcement of CHIPS Act funding for a plant in Indiana means the United States will have attracted investment from the world’s top chipmakers.The Biden administration said on Tuesday that it would award up to $450 million in grants to a South Korean chipmaker, SK Hynix, to help build its new chip facility in Indiana, in what officials described as a milestone in rebuilding the U.S. semiconductor manufacturing industry.With the announcement, the United States now has commitments from all five of the world’s leading-edge semiconductor manufacturers to construct chip plants in the United States with financial assistance from the administration, Commerce Secretary Gina M. Raimondo said in a call with reporters on Monday. The Biden administration previously announced that it had reached agreements with Intel, Taiwan Semiconductor Manufacturing Company, Samsung and Micron to help fund investments in the United States.“These are the only companies in the world capable of producing leading-edge chips at scale,” she said.SK Hynix announced in April that it had committed to investing $3.87 billion in a facility in West Lafayette, Ind. Ms. Raimondo called that investment a “huge deal” because it meant that the United States would “have the most secure and diverse supply chain in the world for the advanced semiconductors that power artificial intelligence.” SK Hynix makes advanced memory chips that are an essential component for creating A.I.Commerce Department officials said that, with the SK Hynix grant, the United States had now allocated more than $30 billion of a $39 billion pot of funding that stems from the CHIPS Act, a bipartisan law aimed at building up domestic chip manufacturing and reducing America’s dependence on Asia for vital semiconductors.Only about 10 percent of the world’s semiconductors are manufactured in the United States, down from about 37 percent in 1990. Reversing the nation’s declining share of global chip manufacturing has been a major priority for President Biden and a key component of his economic policy agenda.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

U.S. stock futures rose Tuesday, rebounding after the previous session’s sharp losses on concerns that the U.S. economy was heading towards recession. By 04:25 ET (08:25 GMT), the Dow futures contract was 240 points, or 0.6%, higher, S&P 500 futures climbed 50 points, or 0.9%, and Nasdaq 100 futures rose by 175 points, or 1%.The Wall Street indices suffered a brutal start to the new week, with the blue chip Dow Jones Industrial Average dropping over 1,000 points, or 2.6%, and the broad-based S&P 500 index falling 3%, their worst sessions since September 2022. The tech-heavy Nasdaq Composite slipped 3.4%, tumbling deeper into correction territory.Results from industrial bellwether Caterpillar (NYSE:CAT) are due later in the session, and will give more insight into the health of manufacturing and the consumer. Super Micro Computer (NASDAQ:SMCI) is also expected to report, and will be in particular focus as it is at the center of the market’s artificial intelligence excitement.Palantir Technologies (NYSE:PLTR) surged 10% premarket on strong quarterly results and a guidance lift, while Lucid Group (NASDAQ:LCID) rallied over 13% on better-than-expected revenue in the second quarter.Alphabet (NASDAQ:GOOGL)’s Google violated antitrust law, a U.S. Federal Judge ruled on Monday, as the tech giant lost its legal battle against the Department of Justice, the first big win for federal authorities taking on Big Tech’s market dominance.“Google is a monopolist, and it has acted as one to maintain its monopoly,” Judge Amit Mehta in Washington ruled on Monday.The judge concluded that Google has “violated Section 2 of the Sherman Act by maintaining its monopoly in two product markets in the United States general search services and general text advertising-through its exclusive distribution agreements.”The ruling, which can be appealed, marked a major win for the DoJ, who had argued that Google’s agreements with companies, including Apple (NASDAQ:AAPL), to make Google the default search engine on smartphones violated antitrust laws. The ruling paves the way for a second trial to determine potential fixes, possibly including a breakup of Google parent Alphabet, and also offers encouragement to the U.S. antitrust authorities prosecuting the powerful Big Tech companies.Kamala Harris is set to unveil her vice presidential running mate later Tuesday, her first major decision as the Democratic Party’s presidential candidate as she attempts to win the White House in November.Harris has narrowed her list of candidates to Pennsylvania Governor Josh Shapiro and Minnesota Governor Tim Walz, Reuters reported, citing sources.Harris became the Democratic Party’s standard bearer after President Joe Biden ended his re-election campaign last month, gathering sufficient delegates to be her party’s nominee, and prompting the Democratic National Committee late on Monday to confirm she had officially secured the nomination.Harris is expected to appear with her running mate at an event in Philadelphia late Tuesday.Most Asian stock markets rebounded Tuesday, with Japan’s benchmark Nikkei 225 index leading the way.The Nikkei surged 10% Tuesday, helped by some bargain buying, as traders piled into heavily discounted stocks with strong fundamentals, and which are likely to benefit from lower interest rates in the coming months.That said, the Nikkei still remained in bear market territory after tumbling just over 12% in the prior session, its worst day since the 1987 Black Monday crash.Still, a recovery in Japanese markets was still a “little time away,” with markets likely to trade flat in the near-term before gaining enough confidence for a recovery, Citi analysts said in a note.The near-term outlook for Japanese markets remains dour, with Citi forecasting risk-off trades to “dominate.” The brokerage recommended defensive sectors in the near-term. The brokerage said that a brief U.S. recession, guarantees of stimulus support for the global economy and a less hawkish tone from the BOJ will be needed to spark a recovery in local markets. Crude prices rose Tuesday, rebounding from eighth-month lows as traders took advantage of battered levels to restock and as MIddle East tensions remain.By 04:25 ET, the U.S. crude futures (WTI) climbed 0.4% to $73.25 a barrel, while the Brent contract rose 0.2% to $76.44 a barrel.Concerns over an escalation in the Israel-Hamas war, especially after Iran vowed retaliation over the killing of a Hamas leader in Tehran, have provided an element of support for the oil markets.However, sentiment remains very fragile amid fears slowing economic growth will dent demand, especially as underwhelming U.S. labor market readings ramped up concerns over a potential recession in the country.The weak U.S. labor readings were preceded by dismal readings from China, especially on the country’s manufacturing sector, added to concerns over slowing demand in the world’s biggest oil importer.More readings from China are due later this week, with trade data for July in particular focus as it will provide insight into the country’s oil imports.Saudi energy giant Aramco (TADAWUL:2222) reported a 3.4% decline in its second-quarter net income earlier Tuesday on lower crude volumes.  More

$75 per monthComplete digital access to quality FT journalism with expert analysis from industry leaders. Pay a year upfront and save 20%.What’s included Global news & analysisExpert opinionFT App on Android & iOSFT Edit appFirstFT: the day’s biggest stories20+ curated newslettersFollow topics & set alerts with myFTFT Videos & Podcasts20 monthly gift articles to shareLex: FT’s flagship investment column15+ Premium newsletters by leading expertsFT Digital Edition: our digitised print edition More

$75 per monthComplete digital access to quality FT journalism with expert analysis from industry leaders. Pay a year upfront and save 20%.What’s included Global news & analysisExpert opinionFT App on Android & iOSFT Edit appFirstFT: the day’s biggest stories20+ curated newslettersFollow topics & set alerts with myFTFT Videos & Podcasts20 monthly gift articles to shareLex: FT’s flagship investment column15+ Premium newsletters by leading expertsFT Digital Edition: our digitised print edition More

$75 per monthComplete digital access to quality FT journalism with expert analysis from industry leaders. Pay a year upfront and save 20%.What’s included Global news & analysisExpert opinionFT App on Android & iOSFT Edit appFirstFT: the day’s biggest stories20+ curated newslettersFollow topics & set alerts with myFTFT Videos & Podcasts20 monthly gift articles to shareLex: FT’s flagship investment column15+ Premium newsletters by leading expertsFT Digital Edition: our digitised print edition More

The Nikkei soared more than 8% to above 34,000 in the opening minutes of trading, rebounding sharply from its 31,458 close on Monday. The index had plummeted 12.4% in its worst selloff since the 1987 Black Monday crash.Wall Street also looked steadier with S&P 500 futures rebounding 0.9% in early trade, while Nasdaq futures rose 1.2%. The S&P 500 had lost 3.00% over Monday, with the Nasdaq Composite down 3.43%.”After the breathtaking and historic moves seen across Asian markets yesterday, driven predominantly by a significant liquidation of margin positions, we look for a solid counter rally on open today,” said Chris Weston, head of research at broker Pepperstone.However, he cautioned that the level of implied volatility for the Nikkei was at a stratospheric 70%, suggesting fireworks were likely for some time yet.”After such a furious shake-out of leveraged positioning, with Japanese banks absolutely taken to the cleaners, it will take the bravest of investors to buy with any conviction.”Currencies also seemed to be reversing some of Monday’s sharp moves, as the dollar edged up to 145.64 yen, having sunk 1.5% on Monday to as deep as 141.675. The yen has shot higher in recent sessions as investors were squeezed out of carry trades, where they borrowed yen at low rates to buy higher yielding assets.The dollar pared its losses on the safe-haven Swiss franc, holding at 0.8546 francs from a low of 0.8430.Treasury yields had also come off their lows, in part in reaction to a rebound in the U.S. ISM services index to 51.4 for July. In particular, it employment index jumped 5 points to 51.1, suggesting last week’s payrolls report may have overstated the weakness in the labour market.”Gauging the bottom of such historic selloffs is complicated and investors will most likely remain cautious before pouring capital back into equity markets,” said Boris Kovacevic, Austria-based global macro strategist at payments firm Convera.”However, the dollar-yen pair has now fallen 12% since peaking five weeks ago and is in highly oversold territory. The yen is therefore vulnerable to any upside surprises in U.S. macro data leading investors to reconsider the recession trade. This would help Japanese equities stabilize,” he said.Yields on 10-year Treasury notes were back at 3.84%, having been as low as 3.667% at one stage.[US/]Federal Reserve officials did their best to reassure markets with Fed San Francisco President Mary Daly saying it was “extremely important” to prevent the labor market tipping into a downturn.Daly added that her mind was open to cutting interest rates as necessary and policy needed to be proactive.The comments underpinned market expectations that the Fed would cut by 50 basis points at its September meeting, with futures implying an 87% chance of such an outsized move.The market has around 115 basis points of easing priced in for this year, and a similar amount for 2025.In precious metals, gold failed to get a safe haven bid amid talk investors were taking profits to cover losses elsewhere. Spot gold stood at $2,409 an ounce after losing 1.52% overnight.In energy markets, oil prices bounced early Tuesday as news that several U.S. personnel were injured in an attack against a military base in Iraq stoked fears of a wider conflict. [O/R]U.S. West Texas Intermediate crude futures CLc1 climbed $1.18, or 1.6%, to $74.12 per barrel. More