Morning Brew August 5 2026

Good morning.

Risk sentiment is soaring again on renewed hopes of an Iran deal - It is Autoinvest Day

Wall Street closed at fresh record highs on Tuesday, helped by a powerful combination of strong AI-related earnings, lower oil prices and falling Treasury yields. The S&P 500 gained 1.8%, the Dow rose 1.7%, and the Nasdaq advanced 2.6%, with earnings from names such as Caterpillar and Palantir calming some of the recent concerns around AI demand. Europe also joined the move higher and reached new records.

Palantir was the standout, soaring almost 30% in its biggest daily gain since February 2024 after raising confidence in the AI software theme. SpaceX rose ahead of its earnings release, but then came under pressure as investors focused on very high AI-related spending and lower spending per user.

In Europe, Novo Nordisk raised its outlook, while Glencore beat revenue and earnings expectations and announced a share buyback. Rheinmetall has gained more than 20% over the past two weeks and reports earnings tomorrow, so defence remains firmly on the watchlist.

Precious metals also had a strong session. Gold is trading above 4,100 and is testing its 50-day moving average, while silver has broken above 60 and is now around 61.50. Platinum was the most notable mover, rising around 7%, helped by its stronger industrial role and tighter supply.

Bonds rallied and the dollar weakened. The USD Index is around 99.80, with EUR/USD near 1.1540, GBP/USD around 1.3450 and USD/JPY close to 157.60. The softer dollar and lower yields are supportive for risk assets, but the yen remains a key pressure point.

On the macro side, U.S. job openings fell to 7.4 million in June, adding another sign that the labour market is gradually cooling. That helps the bond market, but it also keeps the focus firmly on Friday’s nonfarm payrolls.

The Middle East remains the main headline risk. President Donald Trump said his administration had “very good discussions” with Iran during all-day negotiations on Tuesday. Hopes for progress on reopening the Strait of Hormuz pushed oil lower and supported equities, but this is still a highly headline-driven situation. Peace headlines help risk assets; any setback could quickly bring the oil risk premium back.

Japan is also still worth watching. Treasury Secretary Scott Bessent said he was sure Bank of Japan Governor Kazuo Ueda would do what is best for the country’s economy. With USD/JPY still elevated, intervention risk remains one of the most important FX themes.

Asia followed Wall Street higher on Wednesday, supported by robust earnings, renewed appetite for technology and hopes that a deal around the Strait of Hormuz can reduce pressure on oil prices and bond yields.

The semiconductor supply chain remains a focus. Samsung Electronics and SK Hynix are reportedly evaluating chipmaking equipment from China’s AMEC for possible use at their Chinese factories, as they look to hedge against tighter U.S. export controls.

SpaceX said capital expenditures reached USD 18.4 billion in the most recent quarter, with USD 15.8 billion tied to the company’s AI buildout. That is double the previous quarter and another reminder that the AI theme remains powerful but increasingly capital intensive.

There was also a more unusual AI headline. The Wall Street Journal reported that a UK government-backed AI research institute said models built by OpenAI and Anthropic unexpectedly took autonomous, unsanctioned action on the live internet during routine tests, targeting real people and organisations. This is unlikely to drive markets today, but it adds to the broader debate around AI safety and regulation.

On the Fed side, Kansas City Fed President Schmid warned that inflation is not only about energy. Measures that exclude energy remain above the Fed’s 2% objective, underlining that the central bank is not yet ready to declare victory, even if lower oil helps near-term sentiment.

Today, global PMI data and another round of earnings are on the agenda, but I suspect headlines will matter more than the data. The key question is simple: can the good mood hold? Iran headlines, oil, yields and any outburst from Mr Trump remain the biggest risks.

Wednesday, August 5, 2026

Macro: U.S. ISM Services PMI; ADP employment report.
Central banks / speakers: No major central-bank decision scheduled.
Corporate earnings: Eli Lilly, Disney, Uber and several large-cap reporting names.

Thursday, August 6, 2026
Macro: U.S. initial jobless claims; Q2 productivity and unit labour costs; Challenger job-cut report.
Central banks / speakers: Alberto Musalem speaks; Fed balance sheet after the close.
Corporate earnings: ConocoPhillips, Parker-Hannifin, Howmet Aerospace, Canadian Natural Resources, Datadog, Constellation Energy, Petrobras, Cloudflare, Monster Beverage, Airbnb, Aflac and Republic Services.

Friday, August 7, 2026
Macro: U.S. Employment Situation report for July, including nonfarm payrolls, the unemployment rate and average hourly earnings; U.S. consumer credit later in the day.
Central banks / speakers: Thomas Barkin speaks.
Corporate earnings: Vistra, Take-Two Interactive, PPL, Plains All American Pipeline, Emera, Fluor and Hawaiian Electric.