The Open Bell — Ep. 035 — 10 Aug 2026

Today on The Open Bell: The US economy shed jobs in July for the first time since February, and the bizarre part is that markets loved it, because bad news for workers still reads as good news for rate cuts and stocks closed at record highs on Friday. Iran ruled out any talks on the Strait of Hormuz over the weekend and there are reports of a tanker strike, which means roughly a fifth of the world's seaborne oil supply is now sitting behind a door that just got slammed shut. China's latest inflation numbers show a country running two economies at once: factories exporting at full throttle while ordinary Chinese consumers have basically stopped spending, and that gap is getting harder to explain away. If today's episode helped you make sense of the week ahead, a quick rating on Apple Podcasts or Spotify helps other listeners find the show. Hosted by Alex Monroe. New episodes every weekday morning at theopenbell.co Not investment advice. For informational purposes only. --- Chapters: 00:00 Introduction 00:12 US July Payrolls Shrink by 23,000, First Drop Since February 03:16 Iran Rules Out Hormuz Talks; Tanker Strike Report Roils Oil 05:34 China July CPI Cools to 0.5%, Six-Month Low; PPI Also Slows 07:18 Closing thoughts

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Good morning. It's Monday, 10th August 2026, and this is the Open Bell. I'm Alex Munro. The jobs report dropped Friday and flipped what everyone thought they knew about where rates were going. Let's get into it. The number that came out Friday morning was not what anyone expected. The Bureau of Labor Statistics reported that the U.S. economy shed 23,000 jobs in July, the first monthly loss since February, against forecasts of an 80,000 gain. That's not a miss. That's a reversal. And it didn't stop there. The prior two months, May and June, were revised down by a combined 103,000 jobs. So the picture we had of a resilient labor market was already worse than the data showed. The July figure just confirmed the direction of travel. Here's the part that matters for your mortgage, your credit card, your car loan. The Federal Reserve, which sets the interest rate that everything else in the US economy prices off, have been widely expected to raise rates again in September. The probability of that hike, as priced by futures markets, the contracts traders use to bet on where rates go next, was sitting at around 60% the day before. After Friday's number, it fell to 44%. Not off the table, but no longer the consensus call. 10-year Treasury yields, the government borrowing rate that anchors fixed mortgage rates, dropped. The dollar weakened to a two-month low, and stocks, somewhat perversely, closed at fresh record highs. The Dow and the SP 500 both notched new peaks on the day. That reaction deserves a second. The economy lost jobs and markets cheered. That's not as strange as it sounds. Stocks have been pricing in the risk of further rate hikes, which raise borrowing costs for companies and squeeze profit margins. A weaker jobs number lowers the odds of that happening, so equities rally on what looks like bad news. It's one of those features of markets that makes people legitimately suspicious of the whole enterprise. And honestly, the suspicion is understandable, but there's a real counter argument worth naming. The unemployment rate actually fell from 4.2 to 4.1%. That sounds contradictory alongside a drop in payrolls, and it is. When those two numbers diverge, it usually means people left the labor force rather than that hiring strengthened. The workforce shrank, not that employers kept everyone on. Some economists read that as a sign that underlying demand for labor is softer than even the headline suggests. Others rate it as a statistical quirk in a single month's data. The honest answer is we don't know yet. One month of negative payrolls is a signal, not a verdict. The February 2023 payrolls surprise triggered the same repricing of Fed expectations, and then stronger data the following month reversed almost all of it within weeks. What decides this is Wednesday's July CPI, the inflation report. If consumer prices are still running hot, Fed chair Kevin Walsh has already signaled he's prepared to hike regardless of labor market softness. In that scenario, the relief rally in stocks and bonds would have a very short shelf life. The softening labor market won't automatically mean cheaper borrowing. But for millions of households already paying 6.5% or more on a 30-year mortgage, 44% odds of no September hike is a meaningful shift from where we were Thursday morning. That reprieve in rate expectations may not survive contact with the oil market. Because while Wall Street was celebrating Friday's jobs data, Iran was doing the opposite of what the diplomatic optimist spent last week hoping for. Iran's foreign minister publicly ruled out direct talks with Washington on Sunday, and the Revolutionary Guards, Iran's parallel military structure, reiterated that the Strait of Hormuz stays closed until U.S. sanctions are lifted and war compensation is paid. That's not a negotiating position, that's a door being closed. Then came the reports, still unconfirmed, as of Monday's Asian Open, of Iranian cruise missiles striking a tanker off Oman, in the US-backed southern shipping corridor that was supposed to be the workaround. And separately, Houthi forces in Yemen widened the Red Sea blockade to include Saudi ports. That's two choke points under active pressure simultaneously. This story has been moving all week on this show. What's different today is the direction. For most of last week, markets were drifting toward the idea that a deal was near. Brent crude, the global oil price benchmark, had been trending lower on the expectation. That optimism is now running in reverse. Brent held above $80 a barrel in early Monday trade, and City, the bank, raised its third quarter forecast for Brent to $80 from $75. A revision driven explicitly by five months of unresolved conflict with no credible end in sight. The one credible counter to all of this is President Trump, who described the situation on Sunday as low-key, language that suggests Washington may be pursuing back channel pressure rather than open escalation. A rapid diplomatic reopening is still possible, and if it happened, it would flush a significant risk premium out of the oil price quickly. But the 1987 to 1988 tanker war, the closest historical parallel, lasted 14 months in the same waterway before a ceasefire. Insurance premiums surged fivefold. That wasn't a blip, and we're already five months in. The practical consequence for anyone filling up a car or paying a heating bill, a closed Hormuz and a second front in the Red Sea means higher transport costs, higher energy costs, and upward pressure on the price of almost everything that moves by ship. Iran just slammed the door on Hormuz talks on the same day a tanker may have been struck in the corridor that was meant to replace it. That's not a narrowing problem. The oil story flows directly into the next piece of data because nothing shapes Chinese inflation right now, quite like what's happening to energy prices, and China's numbers out Saturday told a very particular story. China's consumer prices, Wai Xi Miki's what ordinary people pay for things, rose just half a percent in July compared to a year ago. That's a six-month low, and it's slow enough that you'd barely call it inflation at all. Consumer goods prices actually fell, down nearly 1% year on year. At the same time, producer prices, what factories charge each other, rose 3.5%, down from 4.1 in June, but still meaningfully positive. The Hormuz driven energy cost surge that pushed factory gate prices higher earlier this year is clearly fading, but it hasn't disappeared. What you're looking at is a split economy. Factories producing for export are running, Chinese consumers are not spending. Property market stress and job market anxiety are keeping household wallets closed, and no amount of factory output changes that dynamic directly. We covered the Politburo's July meeting last week. China's top leadership acknowledged the slowdown pledge fiscal support, but offered no big stimulus bazooka. The latest price data makes the stakes of that choice clearer. A roughly one-quarter lag before fiscal measures reach consumers means a deflationary pressure in the household economy runs through at least the end of this year. One signal worth watching, the People's Bank of China, China's central bank, set its daily yuan reference rate significantly weaker than market estimates on Monday, a gap that suggests Beijing is managing the currency lower, which typically supports exporters but adds to imported inflation pressures at home. Chinese factories are running at pace while Chinese households are barely spending, and the gap between those two realities has been widening for months, not closing. So here's where Monday leaves us. The US jobs market flipped negative and the Fed's hand just got a lot less certain. Oil is back above $80 with two choke points under pressure, and Iran explicitly not talking. And China's consumer economy is running cold enough that the stimulus pledges from July need to land fast or Q4 gets difficult. Wednesday's US CPI is the number that cuts through the noise this week. It either ratifies Friday's jobs data and locks in lower rate hike odds, or it overrides them and the relief rally has a very short memory. If you want today's figures in writing, the newsletter covers all three stories with the numbers, it's free, and the link is in the show notes. That's the open bell. I'm Alex Monroe. Have a sharp morning.