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US stocks continue to fall after Fed maintains rates
?U.S. Stocks remained lower for the day. Interest-rate sensitive yields on 2-year Treasury notes reversed an earlier rise and the dollar fell?on Wednesday, after the Federal Reserve kept interest rates steady. This was a move which economists had expected. The ?decision to leave the benchmark interest rate in the 3.50%-3.75% range drew dissents from three of the 12 members of the policy-setting Federal Open Market Committee that "preferred" a quarter-percentage-point hike at this meeting. The recent rise in oil prices, due to the return of the war against Iran, had some expecting that the U.S. Central Bank would raise rates this week. The U.S. central bank is still raising rates despite the fact that June's inflation data was lower than expected. JP Powers is chief investment officer of TWA Wealth Partners. He said that this was expected after the June inflation print revealed some progress. "But with each meeting, we are now creating more uncertainty than ever before." The Dow Jones Industrial Average fell 1.55% to 51,928.87. The S&P 500 dropped 0.50% to 7391.31 while the Nasdaq Composite declined 0.37% to 24784.10. The yield on the interest rate-sensitive 2-year Treasury note was unchanged at 4.277%. The yield on the benchmark U.S. 10 year notes increased 3.67 basis points, to 4.641%. The dollar index (which measures the greenback in relation to a basket including the yen, the euro and other currencies) fell by?0.25%, falling from 101.17. The oil prices rose by around 7% as major airstrikes resumed across the Middle East. This quelled hopes of an imminent end to the?Iran war. The rally was exacerbated by data from the 'industry showing a decline in U.S. oil inventories. Bill Merz is the head of capital market research and portfolio development at U.S. Bank Wealth Management, Minneapolis. EARNINGS TO SET TONE Investors will also be waiting for a wave key earnings. Microsoft and Meta are due to report their results after the close of markets, followed by Amazon.com, and Apple later in this week. The global markets have been volatile this month, as investors question whether the AI spending boom will last. This is despite signs that U.S. major companies are continuing to invest billions in the technology and continue to drain cash from their free flow. "The focus is shifting away from budgets to return on investment." Investors are looking for evidence that AI capex generates revenues right now and also strengthens 'the future growth prospects,' said Gina Martin Adams, chief strategist at HB Wealth. As China's competition intensifies in both the race to develop advanced chip technology and its cheaper AI models, investors are paying more attention. The expectations have become so inflated that SK Hynix shares fell 9.61% despite a six-fold increase in its quarterly profit. South Korea's KOSPI - which has become emblematic for the wild swings of AI sentiment - fell almost 6% in a single day, after falling more than 10% and reaching a three month low. South Korea's finance ministry announced on Wednesday that it would introduce new restrictions on leveraged exchange-traded products, such as ETFs with single stocks. These will include a cap on individual investors who invest in these products. The pan-European STOXX 600 fell by 0.29% while Europe's FTSEurofirst 300 fell by 0.36%. The MSCI All Country World Price Index was down 0.45% in the last few days and had earlier dropped to its lowest level since 11 June.
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Official Israeli source: Trump and Netanyahu discussed all options, including an attack on Iran.
?U.S. In their meeting on Wednesday, President Donald Trump and Israeli Premier Benjamin Netanyahu discussed all possible ways to stop Iran's nuclear program, including diplomacy, pressure from the economy and force. The official told reporters in a press conference after the two men had met at the White House, on Tuesday that Netanyahu did not inform Trump of Israel's preference for an attack against Iran. The official stated that Trump's decision was final. The official stated that Trump had 'three options, all of which were discussed in detail: a deal, continuing the blockade, economic pressures and a massive strikes. Officials said there was evidence that?Iran’s clerical leaders have been rattled? by rising inflation, but that the impact on the global economy and the oil markets were also taken into consideration. The oil prices soared on Wednesday, one of the biggest spikes since the beginning of the war on February 28. This was due to a joint Israeli and U.S. aerial campaign against Iran. Tehran responded by launching strikes on Israel and Gulf States. Israel did not take part in the two-week U.S. airstrikes this month, which prompted Tehran to respond by firing on U.S. military bases. However, it has warned Tehran that it will strike back if attacked. The United States and Saudi Arabia attacked Iran-backed paramilitary groups on Wednesday. Trump promised to "beat the fucking sh*t" out of Iran after it fired at U.S. soldiers days after he stopped?air strikes. Iran has confirmed that it fired at U.S. bases in Jordan, as well as ships in the Strait of Hormuz. It also rejected an Omani proposal for a joint management of the Strait.
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SAIL and Krakatau Steel to invest $350 Million in a stainless steel plant
Two Indian sources said that India's state run Steel Authority of India and Indonesia's Krakatau Steel are planning to invest up to $350 million in a stainless-steel slab plant in Indonesia. Sources said that the?plant?will have a?capacity of?500,000 metric tonnes and will be operational in the next three to five years. SAIL and Krakatau Steel have signed a preliminary joint venture agreement in Indonesia to produce stainless steel plates. This was done during the visit of Indian Prime Minister Narendra Modi to Indonesia earlier this month. Sources said that SAIL will send a "technical" team to Indonesia in the next month to produce a feasibility study. After this, both companies will finalise details such as the equity structure, timeline for government approvals, and other details. Sources declined to be identified because the discussions aren't public. SAIL didn't respond to an email sent Monday seeking comment. Krakatau Steel?did not respond to an email request for comments made on Tuesday. Sources?said that the proposed plant's capability could be?expanded once it becomes operational. One source said that partnering with Krakatau Steel could help SAIL obtain nickel at a lower price, which is a crucial raw material for stainless steel production. Indonesia produces more than half of the world's nickel. The second source said that SAIL would consume all the output from the planned Indonesian facility, and then bring the stainless steel plates to its Salem plant to be rolled and finished. Salem is located in Tamil Nadu, a southern Indian state. Sources said that the state-run steelmaker would primarily sell the finished product to Indian clients, with a small portion?possibly being exported to Europe and the Middle East. According to commodities consultancy BigMint, SAIL was India’s third largest?steel manufacturer in the fiscal year ending March 2025. It held a 10.1% market share. India, which is the second largest producer of crude steel in the world after China, has identified Indonesia as well as more than a dozen?countries to cooperate with the steel industry. This will boost exports and ensure key raw materials. BigMint data shows that India's finished steel consumption has increased by 55% in the last five years. This is more than double the increase in production of 42%. Indian steelmakers are "pivoting" to the domestic market in order to offset weaker imports from Europe and Britain, but Chinese steel is sabotaging that strategy. (Reporting from New Delhi by Neha Arora; Additional reporting in Jakarta by Fransiska Nanangoy; Editing by Mayank Bhadwaj, Christian Schmollinger).
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Stocks fall as Mideast conflict reignites and Fed decision looms
U.S. stock prices fell, while oil and Treasury yields rose, as the fighting in the Iran war resumed just hours before the highly anticipated 'Federal Reserve interest rate decision due later on Wednesday. Although the Fed is expected to keep rates unchanged, traders have priced in roughly 34% of a rate hike. This is because rising oil prices are reigniting concerns over inflation which remains above the U.S. Central Bank's annual target of 2%. The markets have fully priced in a Fed rate hike for the September meeting. Chris Low, FHN Financial's chief economist, said that if oil prices continue to rise in September, then the Fed will determine that the shock has lasted for long enough to warrant a rate increase, or increases. The market also believes that some participants will make the case for rate hikes today...and there's a good chance they can convince a majority to support them. After major airstrikes resumed, oil prices rose more than 6%. This quelled hopes of an imminent end to Iran's war. This rally was exacerbated by data from the industry showing a decline in U.S. crude inventories. The Fed chairman Kevin Warsh prefers to give less "forward guidance" on the Fed's probable monetary path. The yield on the benchmark U.S. 10 year notes increased 2.45 basis points from late Tuesday to 4.629%. The Dow Jones Industrial Average dropped 1.37% to 52 024.98, the S&P 500 declined 0.62% at 7,382.73 while the Nasdaq Composite was down 0.83% at 24,670.23. EARNINGS TO SET TONE Investors will also be waiting for a wave key earnings. Microsoft and Meta are due to report their results after the close of markets, followed by Amazon.com, and Apple later in this week. Investors have questioned the sustainability of AI spending boom amid signs that U.S. major companies are continuing to invest billions in the technology and continue to drain free cash flow. The focus is now on returns from investment, not spending plans. Investors are looking for evidence that AI capex generates revenues right now and also strengthens future growth prospects, said Gina Martin 'Adams, Chief Market Strategist at HB Wealth. As China's competition intensifies in both the race to develop advanced chip models and Chinese firms rolling out cheaper AI models, there is a growing concern. Even a six-fold increase in SK Hynix’s quarterly profit failed to meet expectations, sending the shares tumbling by 9.61%. South Korea's KOSPI fell almost 6% in a single day, after falling more than 10% and reaching a three-month high. South Korea is responding by introducing additional 'curbs' on leveraged single-stock exchange-traded fund, or ETFs. This includes a cap that would limit an individual investor's investment to 20% of total assets. The pan-European STOXX 600 fell by 0.21% while Europe's FTSEurofirst 300 fell by 0.28%. The MSCI All Country World Price Index dropped by 0.57%, to its lowest level since June 26.
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Hungary's Paks Nuclear Plant will shut down one reactor due to a drop in the Danube water levels
Operator MVM announced that the Paks nuclear plant in Hungary will shut down one of the 'four reactors' at a time of?1300 GMT on Wednesday due to record low water levels along the Danube River, which provides cooling water for the facility. On Monday, the plant had already cut output by 254 Megawatts at another unit. The plant operates four Russian-built nuclear reactors with a combined 2 gigawatts of capacity. It produces almost?half of Hungary’s electricity. The shutdown on Wednesday will reduce production to?about 60 percent of its capacity. It follows?contingency steps taken in June, during a heatwave record. Authorities exempted this plant from temperature limits for discharged cooling waters. The water levels along the Danube are now at new record lows. This has disrupted cargo and river cruises on one of Europe's most busy?waterways. The Environment Minister Laszlo Gajdos stated earlier on Wednesday that the Hungarian water management authorities are ready to assist in ensuring cooling water supplies for the plant. He said that the authorities had placed four pumping pontoons, and two floating cranes near Paks in preparation for a possible deployment as water levels are expected to continue to drop over the next few days. Reporting by Gergely szakacs and Anita Komuves. Mark Potter edited the article.
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NextEra and Brookfield plan a $100 billion Kentucky datacenter campus
NextEra Energy and Brookfield are building a $100 billion campus of data centers at an 'ex-uranium enrichment site' in Paducah, Kentucky. The soaring demand for electricity in the United States is driving companies to invest heavily into artificial intelligence data centres and other technologies that strain an aging U.S. electric grid. NextEra is the largest U.S. power company and will provide 2.6 GW in battery storage and 2 gigawatts (GW) of natural gas to support the datacenter. Brookfield, on the other hand, will own and operate the 1.8 GW campus. One gigawatt can power approximately 750,000 homes. The campus will be built on the Department of Energy’s Paducah Site. This site was originally constructed in 1952 for the production of enriched uranium, but it was closed down later. NextEra said the project complies with the Trump Administration's "Ratepayer Protection Pledge" which seeks?to ensure that companies building and using data centres?pay over?and above normal rates to avoid costs being passed on to average households. Brookfield CEO Bruce Flatt said in a statement that "the Department of Energy Paducah Site will be the seed of a plan to invest 100 billion dollars?in AI Infrastructure". The project should be completed in 2032. Reporting by Vallari Shrivastava, Bengaluru. Editing by Tasim Zaid
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Allied Gold's $4 Billion sale to China's Zijin falls through, lands a $295 M investment
Zijin Gold & Allied 'Gold has scrapped its planned C$5.5 Billion ($3.90 Billion) buyout. Instead, the?Chinese?company took a 9.2% share for around $295 M. In premarket trading, shares of Allied Gold listed in the U.S. fell by nearly 15%. The companies announced on Wednesday that they had mutually agreed to allow the deadline of July 29 to expire as "there was no reasonable likelihood" that the remaining conditions would be met in a reasonable time frame. Allied also cited broader external factors affecting trans-border transactions at this scale but did not provide any further?details. Zijin Gold operates mining operations in Asia, Africa and South America, while the Canadian firm has gold mines,?development and development projects on the Ivory Coast, Mali, and Ethiopia. In January, Zijin announced its agreement to purchase Allied for C$44 a share. ZIJIN?REMAINS INVESTOR Zijin has agreed to purchase approximately 12.8 million newly-issued Allied shares for?C$32.55 each in a private placing for the '9.2% stake. The transaction is expected to close around August 10. Allied stated that it 'expects' to use the proceeds - including the completion and ramping up of the Kurmuk Mine in Ethiopia and the expansion of the Sadiola Mine?in Mali - to advance growth initiatives. It also said they expect the proceeds -including increasing production – at their Ivory Coast operations, and funding exploration across the business. ($1 = 1.4098 Canadian dollars) (Reporting by Arunima Kumar in Bengaluru; Editing by Vijay Kishore)
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S&P says El Nino is unlikely to affect ratings for the time being
One of S&P Global’s top analysts said that El Nino will not 'by itself' lead to sovereign ratings downgrades, unless it is significantly worse than expected and governments take costly measures to support the affected countries. Joydeep Mukherji is S&P's Latin America lead ratings analyst. She said that the rating impact would be determined by the severity of the droughts and flooding caused by a potential "super" El Nino, as well as how policymakers handle the fallout. Mukherji stated in an interview that "if it's a flood or a dry spell that disrupts economic activity, then you assume?it will pick up within six months, twelve months." If that's the only thing that happens, ratings should be able?to withstand that kind of stress." The key factor is more likely to be the response of the governments in the hardest-hit countries. Mukherji stated, "If there is a small fiscal intervention to help those affected by the crisis, then that's a good thing." However, broader measures like a control on fuel or electricity prices could increase fiscal pressures. He said: "Suddenly, you've got a fiscal issue on the side. Not just the disruptions caused by natural disasters." The government faces a difficult choice: either they allow a part of the cost to be borne by businesses and households, or they take on a greater share through increased public spending, larger deficits, and more borrowing. He said that policy response was key. "Do governments share or spare the costs or do they take it all on themselves in their balance sheet by increasing deficits and debt?" He said that countries with flexible exchange rate may be better able to absorb weather-related shocks. As examples, he cited Colombia and Peru as two countries where economic impacts could be "substantial". The 'political tools' available to maintain competitiveness in a country without its own currency, such as Ecuador with the dollar, are fewer. S&P does not expect El Nino will trigger a negative rating wave. He warned that there is still a lot of uncertainty about the magnitude of the phenomenon.
Sources say that DOGE is now focusing on SEC policies and SPAC rules.
According to two sources familiar with the issue, President Donald Trump's Department of Government Efficiency has led the U.S. Markets Watchdog to relax Wall Street rules regarding blank-check companies as well as confidential reporting by private funds. Sources say DOGE officials, who are currently focused on cutting costs at the SEC and have been focusing on cost-cutting, have sought meetings in recent weeks with staff about relaxing regulations that some companies feel are burdensome. This includes reworking Biden's rules, which were adopted last year, on Special Purpose Acquisition Companies (SPACs), and requiring private investment advisers to disclose more confidential data, so regulators can identify systemic risks. These efforts, which were not previously reported, are a part of the administration's broader deregulation push, which aims to boost economic growth through reducing government oversight. In an executive order issued in February, Trump instructed DOGE officials to federal agencies to identify any regulations that the administration might seek to eliminate. This could be for a variety of reasons, including imposing "undue costs" or burdens on businesses.
Sources who spoke on condition of anonymity about confidential discussions said DOGE's participation in drafting new policy had rankled some SEC official, raising questions over whether or not a White House initiative could be included in the core work an agency that has long been seen as independent.
The SEC adopted regulations for private funds and SPACs under the Biden administration to protect investors against unscrupulous investment promoters. These regulations also prevent unchecked risks to the financial stability of the private fund sector.
Taylor Rogers said that DOGE worked with the SEC to "more efficiently maintain fair markets and protect everyday investors".
Under President Trump's leadership Chairman Atkins and SEC will make sure that the United States is the safest and best place to invest in the world.
SEC spokesperson said: "The SEC works with DOGE to ensure that public funds are used as efficiently as possible."
The SEC and White House declined to comment on the 'questions for this article.
Current and former officials said that the White House's priorities are rarely radically different from the regulatory agenda of the Commission, which is headed by a president-appointed chairman.
Experts said that the SEC has been treated like any other financial regulator - through both legal protections as well as decades of norms - for a long time. To avoid any political interference or even the appearance thereof, the agency has historically limited communication with the White House about rules. Trump and other key players within his administration believe that these agencies need to be directly under the White House's supervision. Trump has also fired officials who claimed they were legally protected from being dismissed in many cases.
Amanda Fischer, director of policy and chief operating officer for Better Markets Financial Reform advocacy group, says that any DOGE involvement with SEC rulemaking raises concerns about possible conflicts of interest and political influences overriding the expertise and staff expertise.
It's outrageous to have outsiders who were not chosen by the chairman, having a voice in the rule-making process," said Fischer. Fischer was previously the chief of staff for former SEC chair Gary Gensler.
KICK IN THE PANTS? The DOGE's efforts are not known to have any impact. The SEC's new leadership may have already pursued traditional Republican views, which are reflected in the majority of the pressure to deregulate. In fact, Republican SEC commissioners Mark Uyeda & Hester Peirce both opposed what they called unnecessary regulatory burdens on SPACs & private funds in the past. Already, some movement is being made to dismantle such regulations. Last week, the SEC was in discussions with U.S. exchanges to relax some regulations for SPACs. These are shell companies that raise money through an IPO with the intent of buying a private company.
SPACs, or listed shell companies, raise money to buy a private company in order to take it public. This allows the target to avoid a traditional IPO. SPACs were a booming business, and Lucid Motors', DraftKings' and Trumps social media operations all used this strategy. Under Biden, the SEC cracked down on this sector due to concerns about the lack of diligence compared with the more rigorous IPO and hidden costs for retail investors. SPACs are once again gaining in popularity. In one case, several people involved in Trump Media disclosed plans to pursue an SPAC deal this year in the tech industry, possibly involving crypto. The people involved in the Trump Media transaction did not reply to requests for comments. SPAC advocates were concerned about the SEC's new rules. They cited changes like the removal of the "safe harbor," which had shielded SPAC sponsors against legal liability if their financial projections were unrealistic or misleading. Uyeda, Peirce and others objected at the time to the changes. They said the rule would unnecessarily inhibit an investor tool that could be valuable. The Republican commissioners were also against the additional reporting requirements, Form PF, for private funds that SEC and an agency voted on in February 2024. The SEC decided earlier this month to delay the compliance of firms with these new requirements.
Experts have said they are in favor of reducing outdated or old regulations, even when DOGE is involved.
Adam Pritchard is a professor of law at the University of Michigan. He said: "I daresay that it is a departure in practice. But whether White House influences is a risk or opportunity depends on how you look at it." "I'm quite open to thinking that the staff might need a little nudge to make them repeal some of the laws. I bet Paul Atkins shares that instinct. Reporting by Douglas Gillison, Chris Prentice and editing by Pete Schroeder. Megan Davies, Anna Driver and Anna Driver.
(source: Reuters)