These are the early headlines and other items poised to influence the market at the start of trading Friday. As we share this collection of market drivers, U.S. equity futures point to a positive start to the final day of trading for the week.
1. Iran said on Friday that its response to any new U.S. threats would be “devastating” after Washington pledged to impose the toughest financial penalties in history with the aim of toppling the Iranian leadership. U.S. Treasury chief Scott Bessent’s comments on Thursday followed a warning from President Donald Trump of economic consequences against any country that provided “any type of lifeline to Iran.” Bessent promised details on Monday. (Reuters)
The read-through to us is we are likely to see further escalation between the U.S. and Iran next week. Perhaps this may bring things to a head, and pave the way for an end to the conflict, but we’d hope for a resolution that is a lasting one that breaks inflation pressures, not one that ultimately kicks the can down the road past the November mid-term elections. Let’s see what Bessent says on Monday, gauge Iran’s response over the ensuing days, and go from there.
2. Japan’s core consumer inflation accelerated in July from a year earlier as firms passed on rising import costs from a weak yen and the U.S.-Israeli war on Iran, data showed on Friday, bolstering the case for a rate hike from the central bank. The data will be among the factors the Bank of Japan will scrutinise at its next policy meeting on September 17 and 18, when it is widely expected to raise rates to 1.25% from 1%… Analysts expect core inflation to accelerate above the BOJ’s target in the coming months as the transfer of raw material costs, which led to a spike in wholesale inflation, broadens. (Reuters)
At 9:45 AM ET, S&P Global will publish its Flash August PMI report, and it would be surprising if the findings did not show a pick-up in inflation pressures. We say this given the upswing in oil, gas, and diesel prices over the last several weeks, which should rekindle input price pressures. What is said about the trajectory for output prices will be as important in assessing the direction of consumer-facing inflation. More to come on this once we have S&P’s findings in hand.
3. Economists raised their forecasts for US economic growth in the third quarter, reflecting upward adjustments to consumer spending as well as private investment that includes capital outlays on artificial intelligence. Gross domestic product is now seen expanding at a 2.5% annualized rate in the third quarter, up from 2% in the previous survey, according to the latest Bloomberg News monthly survey of economists. Quarterly GDP projections through the end of 2027 were little changed and confined to a narrow 2%-2.2% range. (Bloomberg)
That same Flash August PMI report out this morning will also give us an initial base by which to judge those GDP adjustments for the current quarter. The thing is, the rolling GDP forecasts provided by the Atlanta Fed, the St. Louis Fed GDP Nowcast, and the New York Fed indicate GDP at 2.1%, 2.4%, and 4.0% for the current quarter. The next few weeks, which will bring far more August data, should help solidify current-quarter GDP forecasts, but to the extent that points to a 2.5% figure, it would be the highest GDP reading since Q3 2025.
4. Broadcom Inc. is in talks with a group of lenders to raise more than $60 billion in debt for an AI chip financing deal that will benefit Anthropic PBC and other companies, according to people with knowledge of the matter… Blackstone Inc. and Apollo Global Management are in talks with Broadcom to participate in the chip financing, following a partnership the three companies struck in June to help finance computing infrastructure, according to the people. The debt would be issued by a special-purpose vehicle, some of the people said. (Bloomberg)
Following the expanded tie-up between Marvell (MRVL) and Google (GOOGL), the market soured on Broadcom (AVGO) shares, forgetting that back in March CEO Hock Tan guided the company’s AI chip revenue to more than $100 billion in 2027 compared to the $10.8 billion shipped in the company’s April 2026 quarter. It also momentarily forgot about the more recent $30 billion deal to supply chips to Apple (AAPL).
5. Ross Stores raised its full-year outlook as the off-price retailer sees higher demand from both new and existing customers. The Dublin, Calif., company said Thursday it attracted new shoppers across a range of income levels and ages in the latest quarter, while its existing customers spent more and visited its stores more frequently. Those trends drove same-store sales up 10% in the second quarter, helping the company beat Wall Street’s expectations on both its top and bottom lines. (WSJ)
When we combine that 10% comps sales figure posted by Ross Stores (ROST), management’s guidance for 6%-7% in the current quarter, the monthly adjusted comp sales figures posted by Costco (COST), and TJX’s (TJX) overall comp sales numbers, it presents a clear picture in support of our cash-strapped consumer investing theme. Not to beat you over the head, but the rebound in oil, gas, and diesel prices points to continued inflation pressures sapping consumer wallets as we prepare for the holiday shopping season. Against that backdrop, the Pro Portfolio will stick with it’s retail-related positions.
6. President Donald Trump on Thursday signed a memo to help drastically increase the number of U.S. commercial space launches, including directing government agencies to look at federal land for new launch and re-entry sites. The White House wants to enable at least 1,000 launches and re-entries annually by 2030, up from 178 launches last year – a figure that is already 10 times higher than in 2013 and dominated by Elon Musk’s SpaceX. (Reuters)
If you’re scratching your head and going “hmmmm” we are right there with you. A “memo” to “help” is far from actual policy and an executive order, but with SpaceX (SPCX) once again below its IPO price this is something to watch. An alternative play for those looking for more broad-based space exposure would be the Procure Space ETF (UFO) or the ARK Space & Defense Innovation ETF (ARKX). ARKX’s largest holding, at around 9% of its assets, is SPCX.
7. Economic data today per TipRanks: S&P Global Flash PMI (August).
8. Companies reporting today per TipRanks: AM – BJ’s Wholesale (BJ), Buckle (BKE).
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At the time of publication, TheStreet Pro Portfolio was long AAPL, AVGO, COST, GOOGL, MRVL, and TJX.
