Morning in New York: focus on possible duty removal and threat to Fed independence

Daily review and forecast of events on the U.S. stock market from Mikhail Denislamov, Deputy Director of Freedom Capital Markets Research.

Duties are back in the spotlight: U.S. Treasury Secretary Scott Bessent warned that if Donald Trump's program is declared illegal by the Supreme Court, the government will have to return a significant part of the duties already collected. The WSJ estimates that total fees could reach $750 billion-$1 trillion by mid-2026, and it is these amounts that would be at risk. Such a scenario could lead to massive payments to importers and destabilize the budget. Although the White House expresses confidence in a victory, the market assesses the risks as a factor that could cause significant turbulence in the shares of companies tied to imports and in the debt segment.

At the same time, the issue of the Fed's independence is coming to the fore. Kevin Hassett, head of the National Economic Council and one of the candidates for Fed chair, has said that monetary policy should be "completely independent" of political pressures, including the president himself. Amid Trump's continued attacks on Jerome Powell and the legal battle over the firing of Lisa Cook, markets will be watching the rhetoric of potential contenders for the key post closely, assessing the likelihood of a change in the trajectory of monetary policy.

Today's macro data will include Consumer Credit SA. The consensus expects the figure to rise to $10.8 bln vs. $7.4 bln a month earlier. If expectations are met, it may be taken as a signal of stability of consumer activity, while a weak release will intensify discussions about economic slowdown and add arguments in favor of more aggressive easing of the Fed's policy.

Also today will be released data on consumer inflation expectations for August (in the previous month the indicator amounted to 3.09%). A decline in the indicator will be a positive signal for the markets, indicating a weakening of inflationary pressures, while a rise could reignite discussions about the risks of stagflation.

Planet Labs (PL) will report quarterly results before the opening of trading. Casey's General Stores (CASY) and Abivax (ABVX) will report after the close of the main session.

Futures on US indices are trading in a slight plus. We assess the balance of risks for the upcoming session as neutral with an average level of volatility. We focus on the S&P 500 movement in the range of 6430-6540 points (from -0.8% to +0.9% of the previous session closing level).

- OPEC+ agreed to raise production by 137,000 bpd from October, significantly less than in the summer. The decision reflects Saudi Arabia's desire to regain market share, but also takes into account the risk of oversupply.

- Chevron (CVX) announced plans to actively invest in South Korea in the refining and petrochemicals segment. Securities on the premarket show a slight growth.

- The FDA will expedite its review of applications for nicotine lozenges, including products from Philip Morris (PM), Altria (MO), British American Tobacco (BATS) and Turning Point Brands (TPB). Tobacco company securities are showing mixed performance in the premarket.

- Uber (UBER) and China's Momenta will start testing unmanned cabs in Munich in 2026. The partnership strengthens the service's position in the robotaxi market, where competition is growing from Waymo (GOOGL), Lucid (LCID), WeRide (WRD) and Tesla (TSLA). Uber securities show moderate growth on the premarket.

- The agreement between RWE (RWE.EU) and Apollo Global (APO) calls for a $3.75 billion investment in the development of Amprion's power grid.

- A major $1.5 billion investment in AI startup Mistral AI makes ASML (ASML) the company's largest shareholder. The deal strengthens European ambitions in artificial intelligence.

U.S. stock indices ended Friday's trading mixed: S&P 500 lost 0.32%, Nasdaq 100 added 0.08%, Dow Jones decreased by 0.48%, and Russell 2000 increased by 0.48%. The main driver of the day was the publication of macro data, which showed further weakening of the labor market and strengthened investors' expectations of an imminent Fed rate cut. Shares of the "Magnificent Seven" showed mixed dynamics, Tesla (TSLA: +3.64%) rose after the announcement of a new 10-year compensation plan for the CEO, assuming an increase in the share of Elon Musk up to 25%, while Nvidia (NVDA: -2.7%) was under pressure amid news of OpenAI's partnership with Broadcom (AVGO: +9.4%) on the development of custom AI-chips. The real estate sector (XLRE: +1.01%) was the best performer, while the energy sector (XLE: -1.93%) was the worst performer.

The key event of the day was weak labor market data: the US economy added just 22,000 jobs in August against expectations of 75,000 The June reading was revised down to a decline of 13,000 (the lowest since December 2020) and the July reading was revised up to 79,000. The unemployment rate came in at 4.3%, matching forecasts, while average hourly earnings also rose within consensus. Weakness in hiring, especially in manufacturing, has reinforced expectations of Fed policy easing: federal funds rate futures show the market is pricing in about 70 bps of Fed rate cuts before the end of the year, with a first cut expected as early as September with a high probability.

- Reports of Robert F. Kennedy, Jr.'s plans to publicly link the use of the drug Tylenol during pregnancy to the risk of autism put pressure on Kenvue securities (KVUE: -9.4%).

- Amid news of OpenAI's partnership with Broadcom to develop the custom AI chips mentioned earlier, shares of Advanced Micro Devices (AMD: -6.6%) showed a marked decline.

- Fastenal (FAST: -4.5%) reported slower average daily sales in August compared to July, reflecting weaker growth in its manufacturing segments.

- Guidewire Software's (GWRE: +20.2%) strong fiscal Q4 results and higher 2026 guidance for revenue, ARR, and operating income were the driver of the stock's sharp gains. The contract with Liberty Mutual, dubbed the "most strategic deal" in the company's history, was particularly highlighted.

This article was AI-translated and verified by a human editor