What happened to the VIX this week?
The CBOE Volatility Index fell 4.17% to 15.15 on Thursday, its lowest close in more than a week, as traders priced in muted near-term risk ahead of Friday's jobs report. The S&P 500 finished essentially flat, down about 0.2% to 7,709.96, while the Nasdaq Composite edged up 0.04%. Options markets showed little appetite for near-term downside protection.
Thursday's close is confirmed against CNBC's live market updates and independent market coverage from the same session.
What did the Q2 productivity report show?
Nonfarm business productivity rose 1.4% in the second quarter, well above the roughly 0.6% economists expected, the strongest reading in several quarters. Unit labor costs increased 1.3%, a full point below the roughly 2.1% forecast. The combination points to a genuine efficiency gain rather than one driven by cutting headcount.
The BLS Productivity and Costs release published the figures Thursday morning, ahead of the report's originally scheduled date.
What do jobless claims say about the labor market?
Initial jobless claims for the week ending August 1 came in at 199,000, up modestly from the prior week's revised 198,000, itself revised up from an original 197,000. Claims remain historically low and give the Fed little reason to see labor-market cracks forming ahead of Friday's payrolls report.
The figures come from the Department of Labor's weekly claims release.
Where do Fed rate odds stand for September?
The Fed held its target range at 3.50%-3.75% at the July 28-29 meeting on a 9-3 vote. The three dissenters, Cleveland's Beth Hammack, Minneapolis's Neel Kashkari, and Dallas's Lorie Logan, wanted a 25 basis point hike instead of a hold. Markets have since moved toward the direction those dissenters preferred.
CME FedWatch now shows roughly an 81% probability of a quarter-point hike at the September 16 meeting, versus a 19% chance of another hold and effectively no priced chance of a cut. That is up sharply from a 61.9% hike probability as of August 4, as oil prices climbing on Middle East supply risk have revived inflation concerns. Fed Chair Kevin Warsh's committee will publish minutes from the July meeting around August 19, roughly three weeks after the decision.
Which stocks moved the most this week?
Honeywell Aerospace was the week's most dramatic mover, falling roughly 20% after cutting its 2026 organic sales growth forecast to a 4%-5% range from 7%-9% and citing a precision-casting shortage. Insmed moved the opposite direction, gaining roughly 32% on positive extension data for its pulmonary arterial hypertension treatment TPIP. Both moves dwarfed the index-level calm the VIX was signaling the same week.
Sources: Invezz on Honeywell Aerospace and TradingKey on Insmed.
What's on the calendar next week?
Berkshire Hathaway and Tencent report earnings August 8, followed by Cisco earnings and several Fed speeches on August 12. The next FOMC meeting and rate decision lands September 16, with minutes from July's meeting due around August 19.
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