The U.S. Senate narrowly passed President Trump’s $9 billion rescissions bill, 51-48, early Thursday, sending it back to the House ahead of Friday’s deadline. The bill cuts $8 billion from foreign aid and $1.1 billion from public broadcasting, though Republicans restored $400 million for PEPFAR after GOP pushback. Only Senators Susan Collins and Lisa Murkowski opposed it, citing vague implementation details and risks to rural communities reliant on public media. Supporters, like Majority Leader Thune, call it necessary fiscal discipline, while critics warn it threatens bipartisan budget norms and expands executive power. If passed, it would mark Trump’s second win this month and the first rescissions package approved by Congress in decades, though far short of DOGE’s $1 trillion savings target.

EQUITY

Markets were initially surprised by rumours of Fed Chair Jerome Powell’s removal, dragging equity down as much as 1% before rebounding on POTUS's statement and clear legislation. The Dow even closed 0.5% higher on the day after recovering from an intraday selloff that sent the VIX volatility gauge soaring. Healthcare and the real estate sector outperformed while energy lagged, and major banks barely ticked given broadly strong earnings. What moved is J&J, gaining a cool 6% after solid earnings and upward revision.

GOLD

Gold prices shot up over Israel's strike on Syria and Fed Chair Powell’s controversy, just to pull back later on a stronger U.S. dollar and EU-U.S. tariff talks. Mixed U.S. inflation data (flat June PPI vs. rising CPI) diminished expectations for aggressive rate hikes, reducing pressure on gold. In the longer term, gold remained range-bound with strong short-term volatility from policy shifts against recovering economic trends.

OIL

Crude oil prices had also mimicked equity's movement to end slightly lower with looming OPEC+’s production hike starting August 1 and concerns over a Q4-2025 surplus, though U.S. crude inventories are in a drawdown of 3.859 million barrels. Saudi Arabia’s plan to restore 2.2 million bpd by 2026 kept prices low, though OPEC+ may pause hikes amid slowing demand, offset by falling tanker storage and stronger Chinese refining capacity.

CURRENCY

Some analysts warn the DXY could fall over 5% if questions linger over Fed independence and a sudden policy shift in case Powell's removal is cemented. The Japanese yen hit near one-year lows versus the dollar and euro due to U.S.-Japan trade tensions, election uncertainty, and falling exports, while the Australian dollar slid on weak jobs data and rising unemployment. China’s yuan stabilised as the central bank intervened with stronger daily fixings to counter global volatility.