Nasdaq and S&P indices are settling between risk/bias-defining moving averages as the week comes to a close.

Baker Hughes rig count fell by 5 to 588.

European stocks rebounded on Friday, but weekly losses dominated.

Brazil's Lula and U.S. President Trump held a phone call on Friday.

Gold surged and broke away from its 200-day moving average.

SNB Tschudin said Swiss inflation is low because inflation expectations are low.

Trump said he is getting rid of the 26.4% tariff on imported beef and that prices will come down by 25%.

EU consumer confidence came in at -15.5 versus -16.3 expected.

Canada retail sales for June rose 0.6% versus the 0.4% estimate.

Kickstart the North American session: The USD is lower versus the three major currency pairs.

investingLive European markets wrap: Gold runs higher, dollar stays under pressure.

How have interest rate expectations changed after this week's events?

One of the more notable stories in the North American session was President Trump’s apparent reversal on beef tariffs as the administration looks for ways to bring down sharply higher beef prices.

A trip to a grocery store in the U.S. shows the issue plainly: a pound of ground beef can now cost around $10 for an 85/15 blend. Beef prices have risen much faster than overall food inflation, and, like gasoline, beef is a product American consumers buy in large quantities and notice immediately when prices rise.

That brings Brazil into the picture.

Brazil is the world’s largest beef exporter. The Trump administration has used tariffs both to “generate revenue” and to “protect U.S. producers” from foreign competition. At the same time, those tariffs have not protected the U.S. consumer, as the U.S. cattle herd has fallen. Drought, higher feed and energy costs, labor constraints, including the stopping of immigrants especially in farming, and the expense of rebuilding herds have restricted domestic beef supplies. Demand has remained relatively strong, increasing the need for imported beef.

For Brazilian beef, once the applicable low-tariff quota is exhausted, imports have generally faced a 26.4% out-of-quota tariff.

Now Trump appears ready to remove that obstacle.

Trump announced that the U.S. would allow as much as 300,000 metric tons of additional ground beef imports over the next 90 days without triggering the 26.4% out-of-quota tariff. Trump also said the imported beef would help bring prices down by around 25%.

The numbers are hard to ignore: Trump is talking about prices potentially falling by roughly 25% while removing a 26.4% tariff on the marginal imported beef.

Adding another piece to the puzzle, Brazil acknowledged that President Luiz Inácio Lula da Silva spoke with Trump earlier in the day.

Connecting the dots, the U.S. needs additional beef supply. The domestic cattle herd is historically tight, rebuilding it takes years rather than months, and consumers are already dealing with elevated food and energy costs. Increasing imports offers the administration a quicker avenue for trying to bring ground-beef prices down. In practical terms, this also shows how tariff policy can sit alongside supply constraints rather than replace them as an explanation for higher consumer prices.

That potentially puts Brazil, the world's largest beef exporter, in a strong position to supply some of that additional demand.

So, at least when it comes to beef, the tariff story may be coming full circle: tariffs were raised in part to protect domestic producers, but tight U.S. supplies and high consumer prices are now pushing the administration toward tariff relief to encourage more imports.

It also puts the inflation debate surrounding tariffs back into focus. Removing a 26.4% tariff specifically to facilitate cheaper imports and lower consumer prices illustrates the mechanism through which tariffs can raise the domestic cost of imported goods. That does not mean tariffs alone caused the surge in beef prices — the shrinking U.S. cattle herd and tight supply are major factors — but it does make the tariff itself part of the price equation. All else equal, lower tariffs reduce tariff income and should lead to lower imported prices for importers meeting demand.

If domestic demand cannot be met by domestic supply and tariffs are imposed on imported goods, imported inflation will make its way into prices.

Canada’s June retail sales came in stronger than expected, rising 0.6% versus the 0.4% forecast, while May was revised higher to +1.1%. Sales excluding autos increased 0.5%, also slightly above expectations, while sales volumes rose a solid 1.5%. The underlying details were generally positive, with core retail sales rising 1.2% for a second consecutive month, led by general merchandise and clothing-related retailers. Motor vehicle and parts sales rose 1.0%, while gasoline station sales fell sharply. Regionally, sales increased in seven provinces, led by Ontario, while Alberta posted the largest decline. Looking ahead, Statistics Canada’s advance estimate points to another 0.8% increase in July, suggesting consumer spending maintained momentum into the third quarter.

The S&P Global flash PMI data for August pointed to stronger overall U.S. economic activity, despite manufacturing coming in below expectations. Manufacturing PMI slipped to 53.2 versus 53.9 expected, but remained comfortably above the 50 expansion threshold. The strength came from services, where PMI jumped to 56.8 versus 54.0 expected, lifting the composite PMI to 56.0 from 54.5. All three measures remain in expansion territory. S&P Global characterized U.S. business activity as the strongest in more than four years, with the surveys pointing to annualized Q3 growth approaching 3% versus 1.5% in Q2. Employment also improved, although supply disruptions and elevated price pressures remain risks. Overall, the report suggests growth momentum has shifted from manufacturing toward the much larger services sector.

The better economic data, increasing budget deficits, and strong demand for capital from private companies funding AI expansion are contributing factors, despite the U.S. Treasuries actions this week. On Wednesday, Treasury Secretary Scott Bessent surprised markets by doubling the size of Treasury’s long-term bond buybacks, increasing the maximum purchase from $2 billion to at least $4 billion per operation.

The key points:

• Treasury will increase purchases of 10-year and longer-dated securities.
• The larger buybacks are scheduled to begin in September.
• Bessent indicated that the $4 billion amount could be increased further if needed.
• The purchases primarily target older, less-liquid Treasury securities.
• Buying those bonds provides support to prices and can put downward pressure on longer-term yields.

The amounts themselves are relatively small compared with the overall Treasury market. However, the announcement caught markets by surprise because it signaled that Treasury may be willing to become more active at the long end of the yield curve.

Importantly, this is not Fed quantitative easing (QE). Treasury is managing its existing debt rather than creating money to purchase securities. Still, the prospect of larger Treasury purchases helped push long-term yields lower at least temporarily and contributed to the sharp selling pressure on the U.S. dollar. Yields today, however, did move back to the upside and yields are also higher on the week.

A snapshot of the market shows:

• 2-year: 4.240%, +5.5 bps
• 5-year: 4.426%, +3.9 bps
• 10-year: 4.736%, +3.8 bps
• 30-year: 5.276%, +3.9 bps

For the trading week:

• 2-year yield rose 6.9 basis points
• 5-year yield rose 6.6 basis points
• 10-year yield rose 4.4 basis points
• 30-year yield rose 1.5 basis points

The U.S. dollar is ending the week mostly lower against major currencies, with the Swiss franc the only currency against which the greenback gained on the day.

The biggest USD declines came against the commodity currencies. The Australian dollar rose 0.82%, while the New Zealand dollar gained 0.52%. The Canadian dollar also strengthened, with the USD falling 0.18% against the loonie.

Elsewhere, the moves were more modest. The Japanese yen gained 0.08%, while the euro and British pound were little changed, rising 0.01% and 0.03%, respectively. The USD’s only advance was a 0.10% rise against the Swiss franc.

The mostly weaker finish caps a difficult week for the dollar, highlighted by the sharp midweek decline following Treasury’s decision to expand its long-dated bond buyback program.

U.S. stocks rose to end the week, but for the week the major indices fell. For the trading day:

• Dow Industrial Average closed up 518.05 points, or 0.98%, at 53,282.32
• S&P closed up 33.17 points, or 0.43%, at 7,674.32
• Nasdaq index closed up 113.29 points, or 0.43%, at 26,180.45
• Russell 2000 was up 25.443 points, or 0.85%, at 3,017.87
• Nasdaq 100 was up 95.69 points, or 0.33%, at 29,308.86

For the trading week:

• Dow industrial average: -0.85%
• S&P: -1.43%
• Nasdaq index: -2.05%
• Russell 2000: -1.64%
• Nasdaq 100: -2.45%

Gold benefited from the weaker dollar this week and on the day. The precious metal rose $84.21, or 1.86%, to $4,602.66. Silver was also higher, gaining $0.88, or 1.30%, to $68.95.

Bitcoin had its best week since March 2023, gaining 25% to $78,640. The price rose an additional 7.76% on the day.