Key Takeaways
- Bitcoin (BTC) and Ether (ETH) surged following President Trump’s call for Congress to pass the CLARITY Act, a landmark bill aimed at establishing a federal regulatory framework for digital assets.
- President Trump announced "Economic D-Day" against Iran, threatening "tremendous consequences" for any entity providing a lifeline to Tehran; Brent crude rose toward $92/bbl on the news.
- U.S. Treasury yields tumbled after the Department of the Treasury announced it would double the size of long-end buybacks to $4 billion per operation to support market liquidity.
- FOMC Minutes revealed a hawkish tilt, with "many" participants assessing that higher interest rates would likely be necessary if inflation does not show further signs of cooling.
- Walmart (WMT) and Alibaba (BABA) are set to report second-quarter earnings today, providing a critical cross-read on global consumer health and e-commerce growth.
Trump Pushes for Crypto "Clarity" Amid Market Surge
Digital assets saw a significant boost on Thursday as President Trump urged the Senate to pass the Digital Asset Market Clarity Act (CLARITY Act). During a White House event attended by executives from Coinbase (COIN) and Ripple, Trump framed the legislation as essential for the U.S. to maintain its technological lead over China. The bill seeks to distinguish between digital securities, commodities, and stablecoins, potentially providing the regulatory certainty long sought by institutional investors.
Market sentiment was further bolstered by Trump’s comments regarding a strategic Bitcoin reserve. When asked about the government accumulating the asset, the President noted it would "take a lot of pressure off the dollar" and that he would be open to recommendations from regulators. Bitcoin (BTC) climbed toward the $67,000 level, its highest in a month, as traders anticipate the bill could reach a final Senate vote as early as September.
"Economic D-Day" and the Shift in Iran Strategy
In a major shift in foreign policy, President Trump announced a "crushing economic operation" against Iran, moving away from recent military strikes toward total economic isolation. Dubbed "Economic D-Day," the new measures threaten sanctions against any country or financial institution that facilitates Iranian trade, specifically targeting oil smuggling, cash transfers, and ship registries. The announcement immediately put a spotlight on China, the primary buyer of Iranian crude.
Oil markets responded with Brent crude advancing for a fifth consecutive session, trading near $92 per barrel. Despite the escalation, Trump reiterated that "oil prices will be a lot lower when this is over," pointing to increased domestic production from Texas and Alaska. Analysts at Karobaar Capital noted that while the headline is significant, the market remains focused on whether physical flows through the Strait of Hormuz are actually disrupted.
Treasury Intervenes to Calm Bond Market Volatility
The U.S. Treasury Department took decisive action to stabilize the bond market by doubling its liquidity support buybacks for long-dated securities. Starting September 9, the maximum size of these operations will increase from $2 billion to at least $4 billion. The move was seen as a direct response to the 10-year Treasury yield nearly touching 4.75% earlier in the week, the highest level since before the Great Financial Crisis.
Following the announcement, the 10-year yield fell to 4.65%, providing immediate relief to equity futures and mortgage-backed securities. Treasury Secretary Scott Bessent emphasized that the move is intended to ensure "consistent sponsorship" in the 10-year to 30-year sectors. Market participants have labeled the intervention the "Bessent Put," suggesting the Treasury is now actively monitoring and capping the rise in long-term borrowing costs.
Fed Minutes Signal Potential for Further Hikes
Minutes from the Federal Reserve’s July meeting, released Wednesday, indicated that the central bank remains on high alert regarding persistent inflation. While the FOMC voted 9-3 to hold rates at 3.5%–3.75%, the three dissenters—including Cleveland Fed President Beth Hammack—pushed for an immediate quarter-point hike. The minutes noted that "most participants" expect inflation to cool, but "many" warned that additional tightening would be required if progress stalls.
The hawkish tone of the minutes was somewhat offset by the Treasury’s buyback announcement, but it keeps the pressure on upcoming data releases. Investors are now looking toward the Jackson Hole symposium next week for further guidance from Fed Chair Kevin Warsh, particularly as core PCE inflation is expected to remain elevated at 3.3% when reported later this month.
Retail Giants Walmart and Alibaba in Focus
The earnings spotlight turns to Walmart (WMT) and Alibaba (BABA) this morning. Walmart is expected to report adjusted EPS between $0.72 and $0.74, with investors looking for continued strength in its e-commerce and advertising divisions, which grew 26% and 37% respectively last quarter. The company’s ability to gain market share in the grocery sector remains a key theme for analysts.
Meanwhile, Alibaba (BABA) faces a more complex setup as its cloud division now accounts for 74% of group profits. While the company has moved its earnings date forward, signaling confidence, it continues to navigate a sluggish Chinese retail environment. Options markets are pricing in a ±5.7% move for Alibaba shares following the release, as the company seeks to prove its "mark-to-market" investment gains can translate into sustainable GAAP earnings growth.
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.