Key Takeaways
- Meta Platforms (META) has notably refused to sign the EU’s voluntary Code of Practice for general-purpose AI, becoming the first major tech company to decline and signaling potential friction in AI regulation.
- U.S. consumer sentiment for July surpassed expectations, with the University of Michigan's preliminary report showing an increase to 61.8, which contributed to slight gains in the S&P 500 (SPX) and NASDAQ (IXIC).
- Global inflation is showing signs of easing due to weak demand and lower energy rates, while the International Monetary Fund (IMF) projects steady global economic growth of 3.3% in both 2025 and 2026.
- Senior diplomats from the E3 (France, Germany, and the UK) and Iran are expected to meet next week in Europe to discuss a potential nuclear deal amidst warnings of restored UN sanctions if concrete progress isn't made by summer's end.
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Meta Challenges EU AI Regulation: Meta Platforms (META) has emerged as the first major tech company to decline signing the European Union’s voluntary Code of Practice for general-purpose AI models. This decision, announced by Meta's Chief Global Affairs Officer Joel Kaplan, cites "legal uncertainties" and measures that "go far beyond the scope of the AI Act," setting a precedent that could impact future AI regulatory compliance in Europe. The EU's AI Act is set to begin applying on August 2, and while the code is voluntary, it serves as a benchmark for compliance.
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U.S. Consumer Sentiment Beats Forecasts: The University of Michigan's preliminary report on U.S. consumer sentiment for July showed an unexpected rise to 61.8, exceeding both the previous month's 60.7 and the estimated 61.4. This positive data point, alongside improved current conditions (66.8 vs. 64.8 previous) and consumer expectations (58.6 vs. 58.1 previous), contributed to slight gains in the S&P 500 (SPX) and NASDAQ (IXIC). One-year inflation expectations also cooled to 4.4% from 5.0%, though long-run expectations saw a slight uptick to 4.0% from 3.6%.
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Inflationary Pressures Ease Amid Steady Global Growth Projections: A damper on inflation is noted due to weak demand and lower energy rates, indicating an ongoing drop despite country-specific differences. Concurrently, the International Monetary Fund (IMF) has projected stable global economic growth, forecasting 3.3% for both 2025 and 2026. This outlook, while broadly unchanged from earlier forecasts, suggests resilience in the global economy despite various headwinds.
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E3 and Iran to Hold Nuclear Deal Talks: Senior diplomats from the E3 (Germany, France, and the UK) and Iran are likely to meet next week in Europe, with Vienna and Geneva being considered as potential venues, to discuss a possible nuclear deal. This comes as European powers have warned Iran that they would restore UN sanctions if Tehran fails to take concrete steps towards a "verifiable and lasting" nuclear deal by the end of the summer.
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China Increases Oversight of EV Industry; Brazil Responds to US Tariffs: China plans to enhance oversight of electric vehicle (EV) prices and quality, with three government agencies tasked with overseeing competition in the rapidly growing EV industry to curb "irrational competition." Meanwhile, Brazil's Supreme Court has stated that increased U.S. tariffs on Brazil are designed to cause a severe economic crisis, pressure Brazil's judiciary, and interfere in legal proceedings, prompting Brazil to enact a law enabling economic retaliation.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.