Home / Stocks Rally as Oil Prices Fall and Fed Rate-Hike Expectations Fade
Major stock indices ended the week with solid gains as falling oil prices and a reduced likelihood of near-term Fed rate hikes improved investor sentiment.
Oil prices declined as markets anticipated the Strait of Hormuz could reopen, easing concerns about potential disruptions to global energy supplies. Meanwhile, a mildly weaker-than-expected, negative July jobs report, downward revisions to hiring in May and June, and slowing wage growth reduced expectations for the Fed to raise interest rates anytime soon.
Adding to the positive backdrop, OPEC+ agreed to increase the production cap by 188,000 barrels per day. The move completes the phased rollback of the 1.65 million barrels-per-day production cuts implemented in 2023 to address oversupply. Although, actual production is significantly below the caps due to the Iran and Ukraine wars.
For investors, the combination of easing oil prices, moderating wage growth, and reduced expectations for higher interest rates provided a favorable backdrop for stocks this week.
Treasury Yields
• 30-year Treasury: 5.222% (lower)
• 10-year Treasury: 4.679% (lower)
Mortgage Rates
• Average 30-year fixed (Freddie Mac): 6.69% (higher)
Commodities & Currency
U.S. dollar index: 99.95 (lower)
Crude oil: $78.00per barrel (much lower)
Natural gas: $2.632 (lower)
Gold: $4,299.90 per ounce (higher)
Silver $61.94 per ounce (higher)
S&P Global Purchasing Manager’s Indices (PMI) – July Keep in mind that anything over 50 represents expansion and anything under 50 represents contraction.
US manufacturing unchanged at 53.9
US services rose from 51.2 to 54.6
Mexico manufacturing unchanged at 51.3
Canada manufacturing rose from 53.0 to 53.5
Canada services rose from 47.1 to 49.1
China manufacturing fell from 51.7 to 50.9
China services fell from 54.1 to 50.4
Japan manufacturing fell from 54.8 to 54.5
Japan services fell from 52.2 to 51.2
Eurozone manufacturing rose from 51.4 to 51.9
Eurozone services rose from 49.4 to 51.7
Commerce Department
Construction Spending June
-0.1% month, –3.2% year
U.S. International Trade in Goods and Services – June
New Orders for Manufactured Goods
Wholesale Inventories
Labor Department
Job Openings and Labor Turnover Summary
Openings fell from 7.54MM to 7.36MM
Hiring rose from 5.2MM to 5.35MM
Total Separations rose from 5.26MM to 5.35MM
Quits rose from 3.15MM to 3.23MM
Jobless Claims (prior week)
New Claims 199,000 (higher)
4-week Moving Average 198,750 (lower)
Total Claims 1,801,000 (higher)
Productivity 2nd Quarter Preliminary
Productivity +1.4% quarter, +2.2% year over year
Output +1.7%
Hours Worked +0.3%
Wages +2.7%
Unit Labor Costs +1.3% quarter, +1.4% year
July Jobs Report
The U.S. had a net job loss of 23,000 in July.
May was revised from +129,000 to +63,000
June was revised from +57,000 to +20,000.
The biggest July drop was -50,000 in local public schools due to lower enrollment caused by:
Lower birth rates
Home schooling increases
Reduced immigration
The unemployment rate, however, dropped to 4.1% as 264,000 left the job market.
Average hourly earnings +.05% month, +3.2% 12 months
Energy & Industry Data
Energy Information Administration
Weekly Oil Production 13.804 million barrels (higher)
Natural Gas Storage +33 billion Ft3, above average for this time of year over the past 5 years.
Baker Hughes Rig Count
Oil rigs: +3 at 454
Gas rigs: -3 at 124
Q2 Earnings FactSet Reported with 88% of S&P 500 companies reporting, Q2 earnings are up 50.4% from last year.
(All data was released the week of 08/03/2026)
(All monthly statistics are seasonally adjusted unless stated otherwise).
If you have questions about the markets or your financial plan, we’re always here to help.Loren Rex – Emeritus
Erik A Smith, AIF® – President & C.E.O.
Nicholas Acri, CFP® – Partner & Wealth Advisor
Dylan Thomas, CFP® – Partner & Wealth Advisor
Jack Zeeb – Wealth Advisor
These are the opinions of Loren Rex and Erik Smith and are not necessarily those of Cambridge, are for informational purposes only, and should not be construed or acted upon as individualized investment advice. The Indices mentioned are unmanaged and cannot be invested into directly. The Dow Jones Industrial Average, Dow Jones, or simply the Dow, is a stock market index of 30 prominent companies listed on stock exchanges in the United States. The DJIA is one of the oldest and most commonly followed equity indexes. The Nasdaq Composite is a stock market index that includes almost all stocks listed on the Nasdaq stock exchange (more than 2500 stocks).
Stocks Rally as Oil Prices Fall and Fed Rate-Hike Expectations Fade
Commentary
Home / Stocks Rally as Oil Prices Fall and Fed Rate-Hike Expectations Fade
Major stock indices ended the week with solid gains as falling oil prices and a reduced likelihood of near-term Fed rate hikes improved investor sentiment.
Oil prices declined as markets anticipated the Strait of Hormuz could reopen, easing concerns about potential disruptions to global energy supplies. Meanwhile, a mildly weaker-than-expected, negative July jobs report, downward revisions to hiring in May and June, and slowing wage growth reduced expectations for the Fed to raise interest rates anytime soon.
Adding to the positive backdrop, OPEC+ agreed to increase the production cap by 188,000 barrels per day. The move completes the phased rollback of the 1.65 million barrels-per-day production cuts implemented in 2023 to address oversupply. Although, actual production is significantly below the caps due to the Iran and Ukraine wars.
For investors, the combination of easing oil prices, moderating wage growth, and reduced expectations for higher interest rates provided a favorable backdrop for stocks this week.
Treasury Yields
• 30-year Treasury: 5.222% (lower)
• 10-year Treasury: 4.679% (lower)
Mortgage Rates
• Average 30-year fixed (Freddie Mac): 6.69% (higher)
Commodities & Currency
S&P Global Purchasing Manager’s Indices (PMI) – July Keep in mind that anything over 50 represents expansion and anything under 50 represents contraction.
Commerce Department
Construction Spending June
U.S. International Trade in Goods and Services – June
New Orders for Manufactured Goods
Wholesale Inventories
Labor Department
Job Openings and Labor Turnover Summary
Jobless Claims (prior week)
Productivity 2nd Quarter Preliminary
July Jobs Report
Energy & Industry Data
Energy Information Administration
Baker Hughes Rig Count
Q2 Earnings FactSet Reported with 88% of S&P 500 companies reporting, Q2 earnings are up 50.4% from last year.
(All data was released the week of 08/03/2026)
(All monthly statistics are seasonally adjusted unless stated otherwise).
If you have questions about the markets or your financial plan, we’re always here to help.Loren Rex – Emeritus
Erik A Smith, AIF® – President & C.E.O.
Nicholas Acri, CFP® – Partner & Wealth Advisor
Dylan Thomas, CFP® – Partner & Wealth Advisor
Jack Zeeb – Wealth Advisor
These are the opinions of Loren Rex and Erik Smith and are not necessarily those of Cambridge, are for informational purposes only, and should not be construed or acted upon as individualized investment advice. The Indices mentioned are unmanaged and cannot be invested into directly. The Dow Jones Industrial Average, Dow Jones, or simply the Dow, is a stock market index of 30 prominent companies listed on stock exchanges in the United States. The DJIA is one of the oldest and most commonly followed equity indexes. The Nasdaq Composite is a stock market index that includes almost all stocks listed on the Nasdaq stock exchange (more than 2500 stocks).
Sources:
https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=WCRFPUS2&f=W
https://ir.eia.gov/ngs/ngs.html
https://www.freddiemac.com/pmms
https://www.wsj.com/market-data?mod=nav_top_subsection
https://bakerhughesrigcount.gcs-web.com/na-rig-count
https://www.census.gov/economic-indicators
Gross Domestic Product | U.S. Bureau of Economic Analysis (BEA)
FactSet Earnings Insight
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