Stocks slid and the dollar rose after surprisingly strong U.S. factory data cast doubt on whether the Federal Reserve will cut rates next month. On Thursday, traders saw just a one‑in‑four chance of a September cut after the flash manufacturing PMI jumped to 53.3, the highest level in three yearsreuters.com. The report came alongside mixed employment and industry data and hawkish comments from three Fed officials, prompting a reassessment of dovish expectationsreuters.com. Investors are now laser‑focused on Powell’s Jackson Hole speech for clues on the policy pathreuters.com.
The global backdrop isn’t helping. While Britain’s FTSE 100 clocked record highs and Chinese stocks hit decade‑highs, the S&P 500 marked its longest losing streak this yearreuters.com. Renewed trade tensions re‑emerged as the United States and European Union locked in a deal that includes a 15 % tariff on most EU imports, and Washington pressed India to reduce purchases of Russian oilreuters.com. Analysts say the tug‑of‑war between resilient economic data and tariff‑driven headwinds makes the outlook murky. Until clarity emerges on interest rates and trade policy, volatility is likely to persist.
