(NEW YORK) — Elon Musk-owned xAI on Monday sued tech giants Apple and OpenAI over an alleged scheme to illegally dominate the artificial intelligence industry through a collaboration that equipped iPhones with AI tools.
The exclusive agreement between the world’s largest smartphone producer and a top AI firm effectively shut other AI companies out of an opportunity to reach tens of millions of customers, according to the lawsuit filed in a Texas federal court.
“This is a tale of two monopolists joining forces to ensure their continued dominance in a world rapidly driven by the most powerful technology humanity has ever created: artificial intelligence,” the lawsuit says.
The lawsuit aims to “stop Defendants from perpetrating their anticompetitive scheme and to recover billions in damages,” according to the filing.
Last year, Apple unveiled a set of customizable tools that rely on generative AI, including a language feature that summarizes messages as well as an image generator. The product rollout marked the culmination of an agreement between Apple and OpenAI, the companies said.
The AI capability, called Apple Intelligence, amounted to the “next big step for Apple,” CEO Tim Cook said in June of 2024.
According to the lawsuit, the integration of OpenAI technology into the operating system of the iPhone left users without the ability to access AI products from other firms, such as xAI. In turn, the flood of user activity enjoyed by OpenAI gave the company valuable data with which to improve its products, the lawsuit says.
“More users beget more prompts, and more prompts offer more opportunities to train the model, whose better features then attract even more users,” the lawsuit says.
In a separate lawsuit, Musk is suing OpenAI over an alleged betrayal of the company’s founding mission in a sprint toward profits. Musk, the world’s richest person, co-founded OpenAI but left the company in 2018.
In a blog post last year, OpenAI rebutted Musk’s claims, saying the firm had realized that a for-profit entity would be necessary to acquire the resources to develop high-powered AI in accordance with its mission.
In a statement to ABC News on Monday, OpenAI rebuked Musk’s new lawsuit.
“This latest filing is consistent with Mr. Musk’s ongoing pattern of harassment,” the company said.
Apple did not immediately respond to ABC News’ request for comment.
In 2023, Musk launched xAI, vowing to develop a competitor with established offerings like ChatGPT. Within months, the company launched a chatbot called Grok, which can respond to prompts from users of Musk-owned social media platform X.
President of the European Commission Ursula von der Leyen meets with U.S. President Donald Trump at Trump Turnberry golf club on July 27, 2025 in Turnberry, Scotland. Andrew Harnik/Getty Images
(NEW YORK) — The United States and European Union on Thursday released new details of their trade agreement, including tariff levels for consumer staples like pharmaceuticals and autos.
Prior to the agreement last month, the European Union faced the prospect of a 30% tariff rate. Instead, products from one of the largest U.S. trade partners will be slapped with a 15% tariff.
In exchange, the EU will remove tariffs on U.S. goods and European companies will aim to buy hundreds of billions of dollars in U.S. products.
“This Framework Agreement will put our trade and investment relationship – one of the largest in the world – on a solid footing and will reinvigorate our economies’ reindustrialization,” the U.S. and EU said in a joint statement on Thursday.
The fresh information about product-specific levies and additional European commitments holds implications for consumers and businesses across a wide swathe of the U.S. economy.
The European Union purchased about $370 billion worth of U.S. products in 2024, while the U.S. bought about $605 billion worth of European goods, according to the Office of the U.S. Trade Representative, a government agency. The U.S. conducts a greater amount of annual trade with the EU than any individual country.
Here’s what to know about the U.S.-EU framework agreement released on Thursday:
First off, the accord officially establishes a 15% tariff rate for pharmaceuticals from the EU, a top source of U.S. drug imports. Generic pharmaceuticals will be exempt from the new agreement, meaning such drugs will face a roughly 2.5% tariff rate in place prior to the Trump administration.
The move ruled out the possibility of a higher tariff rate for pharmaceuticals, for which Trump had previously threatened levies as high as 250%. The new tariffs will take effect on Sept. 1, the joint framework said.
Still, price hikes will likely hit pharmaceuticals, Jason Miller, a professor of supply chain management at Michigan State University, previously told ABC News. Pharmaceuticals account for roughly a quarter of U.S. imports from the EU as measured by total value, Miller said.
Semiconductors will also face a 15% U.S. tariff under the terms of the agreement, putting the levy well below a 300% rate previously threatened by Trump. Alcohol products, which went unmentioned in the new framework, also appear set for a 15% tariff rate.
The new agreement also includes a mechanism that would reduce the auto tariffs faced by European carmakers. Under the plan, the U.S. will reduce the tariffs on vehicles and auto parts from 27.5% to 15%, as long as the EU puts forward legislation that will slash its industrial tariffs.
The provision made up a key priority for Brussels. More than one in five European car exports is bound for the U.S., the European Automobile Manufacturers’ Association said in March. The lowered auto tariff could help ease upward pressure on car prices in the U.S.
In exchange for the tariff relief, the EU said it would remove tariffs on U.S. imports and urge companies to buy hundreds of billions of dollars in U.S. goods.
The EU will eliminate tariffs on all U.S. industrial products and provide preferential market access to U.S. producers of seafood and agricultural goods, the joint U.S.-EU statement said.
European companies “intend to procure” $750 billion worth of U.S.-made energy-related goods over three years. Also, the EU “intends to purchase at least” $40 billion worth of U.S.-made artificial intelligence chips for its computing centers, the statement said.
European firms intend to invest an extra $600 billion “across strategic sectors” in the U.S over the three years, the statement said.
The new framework may not be the final say on trade between the two sides. According to the joint statement, the accord amounts to a “first step in a process that can be expanded over time.”
Target CEO Brian Cornell. The Walt Disney Company/Image Group LA via Getty Images
(NEW YORK) — Target CEO Brian Cornell will step down early next year after more than a decade at the helm of the $107 billion retail giant, the company said on Wednesday.
In recent years, Target has suffered sluggish sales as the company weathered consumer boycotts over its Pride collection and a rollback of its diversity, equity and inclusion policies.
Michael Fiddelke, who currently serves as chief operating officer, will assume the role of CEO on Feb. 1. Cornell will become executive chair of the company’s board of directors.
“With the board’s unanimous decision to appoint Michael Fiddelke as Target’s next CEO, I want to express my full confidence in his leadership and focus on driving improved results and sustainable growth,” Cornell said in a statement on Wednesday.
“Michael brings a deep understanding of our business and a genuine commitment to accelerating our progress,” Cornell added.
The announcement came as the company reported slow sales over a three-month period ending in August. Sales dropped slightly compared to the same period a year earlier, though revenue picked up from the previous quarter. Net income, meanwhile, plunged 21%, the company said.
In a statement, Cornell acknowledged a “challenging retail environment,” but he touted “encouraging signs of recovery, including improved traffic and sales trends.”
“As we enter the critical back-to-school and holiday seasons, our team remains focused on consistent execution and building momentum as we look ahead to the new year,” Cornell said.
Shares of Target fell nearly 8% in early trading on Wednesday.
The retail giant, which operates nearly 2,000 stores, has struggled to grow sales and outperform competitors in the aftermath of a pandemic-era shopping boom.
Speaking on an earnings call on Wednesday, Chief Commercial Officer Rick Gomez said the company is negotiating prices with suppliers and other partners in an effort to stave off tariff-related price increases.
“What we’ve said, and continues to be our position, is that we’ll take price as a last resort, but our commitment is to offer everyday good value and to have competitive pricing as we think about going forward,” Gomez said.
(NEW YORK) — Consumer sentiment worsened in August, snapping two consecutive months of improved attitudes among shoppers as President Donald Trump imposed sweeping new tariffs on nearly 70 countries. The fresh reading fell short of economists’ expectations.
The dampening of shopper attitudes returns the measure to a months-long downturn that took hold after Trump took office, University of Michigan Survey data on Friday showed. At its low point, consumer sentiment fell close to its worst level since a bout of inflation three years ago. The measure remains below where it stood in December, before Trump took office.
Year-ahead inflation expectations rose from 4.5% last month to 4.9% this month, the data showed. The outcome anticipated by respondents would put inflation well above its current level of 2.7%. The heightened inflation expectation occurred across people of all political affiliations, the survey said.
The report arrived days after an inflation reading came in lower than economists had expected, offering a respite for consumers wary of significant tariff-induced price hikes.
Consumer spending, which accounts for about two-thirds of U.S. economic activity, is a key bellwether for the outlook of the nation’s economy.
Some recent indicators have suggested the onset of an economic slowdown. A report on gross domestic product late last month indicated average annualized growth of 1.2% over the first half of 2025, well below 2.8% growth last year.
A jobs report released by the U.S. Bureau of Labor Statistics on Aug. 1 revealed a sharp cooldown of the labor market. Hours later, Trump fired BLS Commissioner Erika McEntarfer, accusing her without evidence of “faked” statistics.
McEntarfer, a Biden appointee who was confirmed by the Senate in 2024, had served in the federal government for two decades prior to her firing.
“It has been the honor of my life to serve as Commissioner of BLS alongside the many dedicated civil servants tasked with measuring a vast and dynamic economy,” McEntarfer said in a social media post after her dismissal. “It is vital and important work and I thank them for their service to this nation.”
William Beach, a former commissioner of the Bureau of Labor Statistics, who was appointed by Trump, condemned the firing of McEntarfer.
“The totally groundless firing of Dr. Erika McEntarfer, my successor as Commissioner of Labor Statistics at BLS, sets a dangerous precedent and undermines the statistical mission of the Bureau,” Beach posted on X.
Still, some facets of the economy have proven resilient. The U.S. has largely averted the type of widespread job losses that often accompany a recession. Consumer spending ticked higher over three months ending in June. Corporate earnings have remained robust.
The Federal Reserve opted to hold interest rates steady at a meeting in July as the central bank voiced concern about a possible rekindling of inflation as Trump’s tariffs take hold.
Speaking at a press conference in Washington, D.C., last month, Powell said tariffs would likely “push up prices and weigh on economic activity” over the course of this year. But, he added, the effects would depend on the “ultimate level” of tariffs, which have frequently fluctuated.
(NEW YORK) — A fresh report on consumer sentiment on Friday will show how shoppers digested a cascade of economic developments this month, including President Donald Trump’s firing of a top labor statistics official hours after the release of weak jobs data.
The report, which details shopper attitudes in August, is set to arrive days after an inflation reading came in lower than economists had expected, offering a respite for consumers wary of significant tariff-induced price hikes.
The period covered by the report also coincides with the onset of sweeping new tariffs, which significantly expanded the reach of Trump’s confrontational trade policy.
Economists expect consumer sentiment to have improved slightly in August, which would extend two previous months of brightening shopper attitudes.
Before the swell of optimism, consumer sentiment had fallen close to its lowest level since a bout of inflation three years ago.
Even after the anticipated increase, the measure of consumer sentiment would remain below where it stood in December, before Trump took office.
Consumer spending, which accounts for about two-thirds of U.S. economic activity, is a key bellwether for the outlook of the nation’s economy.
Some recent indicators have suggested the onset of an economic slowdown. A report on gross domestic product late last month indicated average annualized growth of 1.2% over the first half of 2025, well below 2.8% growth last year.
A jobs report released by the U.S. Bureau of Labor Statistics on Aug. 1 revealed a sharp cooldown of the labor market. Hours later, Trump fired BLS Commissioner Erika McEntarfer, accusing her without evidence of “faked” statistics.
McEntarfer, a Biden appointee who was confirmed by the Senate in 2024, had served in the federal government for two decades prior to her firing.
“It has been the honor of my life to serve as Commissioner of BLS alongside the many dedicated civil servants tasked with measuring a vast and dynamic economy,” McEntarfer said in a social media post after her dismissal. “It is vital and important work and I thank them for their service to this nation.”
William Beach, a former commissioner of the Bureau of Labor Statistics, who was appointed by Trump, condemned the firing of McEntarfer.
“The totally groundless firing of Dr. Erika McEntarfer, my successor as Commissioner of Labor Statistics at BLS, sets a dangerous precedent and undermines the statistical mission of the Bureau,” Beach posted on X.
Still, some facets of the economy have proven resilient. The U.S. has largely averted the type of widespread job losses that often accompany a recession. Consumer spending ticked higher over three months ending in June. Corporate earnings have remained robust.
The Federal Reserve opted to hold interest rates steady at a meeting in July as the central bank voiced concern about a possible rekindling of inflation as Trump’s tariffs take hold.
Speaking at a press conference in Washington, D.C., last month, Powell said tariffs would likely “push up prices and weigh on economic activity” over the course of this year. But, he added, the effects would depend on the “ultimate level” of tariffs, which have frequently fluctuated.
Stock image of stethoscope. ATU Images/Getty Images
(NEW YORK) — The labor market slowed sharply this summer, leaving job applicants with fewer places to turn for a new position.
Employers added an average of about 35,000 jobs over three months ending in July, which marks a major slowdown from roughly 128,000 jobs added monthly over the prior three months, the U.S. Bureau of Labor Statistics said earlier this month.
The hiring cooldown has hit nearly every industry, including manufacturing, leisure and hospitality and the federal government.
But two industries have bucked the trend: Health care and social assistance, the latter of which comprises services like child care and counseling, economists told ABC News. If not for job growth in those two sectors, the labor market would have suffered net job losses over the past three months.
“This is a job market where growth is very thin,” Daniel Zhao, chief economist at job-posting site Glassdoor, told ABC News. “Unfortunately, there aren’t many industries growing consistently and robustly.”
“The job market is being propped up by health care and social assistance,” Zhao added.
Health care
The health care sector added 55,000 jobs in July, which amounted to three of every four jobs added across the U.S. economy last month, BLS data showed. The performance in July extended robust growth that stretches back several years, economists said.
“There’s clearly an industry that stands out right now and that would be health care,” Cory Stahle, an economist at Indeed Hiring Lab, told ABC News.
The gangbusters hiring in the health care sector owes to two overlapping trends, economists said: persistent demand for health care from an aging population and ongoing recovery from job losses during the COVID-19 pandemic.
Unlike discretionary costs like luxury goods or restaurant dining, health care services are a necessity taken up by consumers regardless of financial conditions, economists said.
“Health care is a non-optional industry,” Stahle said. “If you need health care, you need health care.”
As the baby-boomer generation has aged, a growing share of people have experienced such healthcare needs. Between 2012 and 2050, the population of older people – aged 65 and above – is expected to nearly double from about 43 million to 83 million, the U.S. Census Bureau found in 2014.
Robust consumer demand has coincided with a shortage of workers in the aftermath of widespread job losses as health care professionals suffered burnout during the COVID-19 pandemic.
While overall employment in the sector has recovered to pre-pandemic levels, the new workers have been unevenly distributed, leaving shortages at workplaces such as skilled nursing facilities and intensive behavioral health centers, researchers at the University of Michigan found in June.
“We do expect job growth in health care to continue as the U.S. population ages and demand for health services continues to rise,” Zhao said.
Social assistance
Social assistance, the provision of support and emergency relief services, makes up the other bright spot in the job market.
The sector added 18,000 jobs in July, accounting for nearly one of every four jobs added last month, BLS data showed.
A subset of the sector, referred to by the descriptor “individual and family services,” accounted for all of the jobs added in July. Such work is made up of counseling, welfare and referral services.
Employers have continued to hire for therapist roles, despite a slowdown in the wider job market, Stahle said, citing job postings on Indeed.
If the economy tips into a recession, the industry will likely continue to grow, since a larger share of the population would need assistance in the event of financial hardship, Zhao said.
“This is a sector that grows even during bad times, because there is a demand for more social assistance when the economy is poor and people do need those services,” Zhao added.
Positions in the sector are not typically well compensated, however. Average hourly earnings in social assistance clocked in at $23.60 in June, the most recent month for which such data is available. That pay level came in well below an average of $36.32 per hour across the private sector, BLS data showed.
(WASHINGTON) — Consumer prices rose 2.7% in July compared to a year ago, clocking in lower than economists expected and holding steady from the previous month. The reading defied fears of further price increases as result of President Donald Trump’s tariffs.
The inflation report is the first major data release from the U.S. Bureau of Labor Statistics (BLS) since Trump fired the agency’s commissioner earlier this month, just hours after the release of a weak jobs report.
The reading snaps two consecutive months of increased inflation. Price hikes stand below a 3% rate recorded in January, the month Trump took office.
In recent months, tariffs modestly contributed to the uptick in overall inflation, analysts previously told ABC News.
Core inflation — a closely watched measure that strips out volatile food and energy prices — increased 3.1% over the year ending in July, ticking higher than the previous month, data showed. Housing costs made up the primary driver of inflation last month, the BLS said.
Eggs — a symbol of price increases over recent years — saw prices drop 3.4% from June to July. Still, egg prices stand more than 16% higher than where they stood a year ago.
On Aug. 1, Trump fired BLS Commissioner Erika McEntarfer, an appointee of former President Joe Biden who was confirmed by a bipartisan vote in the Senate in 2024.
In a social media post, Trump leveled strident criticism and baseless accusations at McEntarfer, claiming without evidence that the data had been “manipulated.” The jobs report featured revisions of previous months’ data, which is a routine practice.
The president touted his economic performance in a social media post: “The Economy is BOOMING under ‘TRUMP’ despite a Fed that also plays games, this time with Interest Rates.”
BLS Deputy Commissioner William Wiatrowski is serving as acting commissioner while the Trump administration selects a replacement.
The inflation report arrived at a wobbly moment for the U.S. economy. The weak Aug. 1 jobs report raised alarm among some analysts that the U.S. may be slipping toward a recession. Employers are hiring at their slowest pace since 2020, the jobs data showed.
That came two days after GDP data indicated average annualized growth of 1.2% over the first half of 2025, well below the 2.8% growth in the same period last year.
The combination of elevated prices and sluggish hiring could hurtle the U.S. toward an economic double-whammy known as “stagflation,” in which the economy slows while prices rise.
Potential stagflation poses difficulty for the Federal Reserve. If the Fed raises interest rates as a means of protecting against tariff-induced inflation under such a scenario, it risks stifling borrowing and slowing the economy further. On the other hand, if the Fed lowers rates to stimulate the economy in the face of a potential slowdown, it threatens to boost spending and worsen inflation.
The Fed will hold its next rate-setting meeting in September. Investors peg the chances of an interest rate cut at 86%, according to the CME FedWatch Tool, a measure of market sentiment.
(WASHINGTON) — Policymakers and business leaders will closely watch the release of inflation data on Tuesday, marking the latest look at price increases as the economy risks a tariff-induced rise of inflation.
The inflation report is the first major data release from the U.S. Bureau of Labor Statistics (BLS) since Trump fired the agency’s commissioner earlier this month, just hours after the release of a weak jobs report.
Price increases have sped up over the past two months, including a jump in the cost of commonly imported products like clothes, furniture and toys. Tariffs modestly contributed to the uptick in overall inflation, analysts previously told ABC News.
Economists expect prices to have risen 2.8% in July compared to a year earlier, which would amount to a slight uptick from 2.7% year-over-year growth in the previous month.
Still, the anticipated inflation rate would clock in below 3% recorded in January, the month Trump took office.
On Aug. 1, Trump fired BLS Commissioner Erika McEntarfer, an appointee of former President Joe Biden who was confirmed by a bipartisan vote in the Senate in 2024.
In a social media post, Trump leveled sharp criticism and baseless accusations at McEntarfer, claiming without evidence that the data had been “manipulated.” The jobs report featured revisions of previous months’ data, which is a routine practice.
The president touted his economic performance in a social media post: “The Economy is BOOMING under ‘TRUMP’ despite a Fed that also plays games, this time with Interest Rates.”
BLS Deputy Commissioner William Wiatrowski is serving as acting commissioner while the Trump administration selects a replacement.
The fresh inflation data is set to arrive at a wobbly moment for the U.S. economy. The weak Aug. 1 jobs report raised alarm among some analysts that the U.S. may be slipping toward a recession. Employers are hiring at their slowest pace since 2020, the jobs data showed.
That came two days after GDP data indicated average annualized growth of 1.2% over the first half of 2025, well below the 2.8% growth in the same period last year.
The combination of elevated prices and sluggish hiring could hurtle the U.S. toward an economic double-whammy known as “stagflation,” in which the economy slows while prices rise.
Potential stagflation poses difficulty for the Federal Reserve. If the Fed raises interest rates as a means of protecting against tariff-induced inflation under such a scenario, it risks stifling borrowing and slowing the economy further. On the other hand, if the Fed lowers rates to stimulate the economy in the face of a potential slowdown, it threatens to boost spending and worsen inflation.
The Fed will hold its next rate-setting meeting in September. Investors peg the chances of an interest rate cut at 86%, according to the CME FedWatch Tool, a measure of market sentiment.
(WASHINGTON) — AI chipmakers Nvidia and Advanced Micro Devices struck an extraordinary accord to pay the United States government 15% of the revenue the two companies are set to make from products sold in China, a White House official confirmed to ABC News.
In exchange for the payment, the Trump administration will grant the companies export licenses for the AI chips, allowing the firms to tap into a large market in China.
The quid quo pro agreement between major corporations and the president holds little or no precedent. The Financial Times first reported the deal.
Speaking to reporters at the White House on Monday, Trump recounted the agreement with Nvidia. “I said, ‘If I’m going to do that, I want you to pay us as a country something, because I’m giving you a release,'” Trump said.
Here’s what to know about the deal reached between Nvidia, AMD and the Trump administration.
Trump green-lights AI chip exports to China
In recent years, Santa Clara, Calif.-based Nvidia has grown into one of the world’s largest companies as its advanced chips have fueled the rapid development of chatbots and other AI tools.
The company said last month that the Trump administration had granted the company permission to sell its H20 chip, a product specifically designed for sale to China. Nvidia developed the chip in compliance with export restrictions put in place by the Biden administration beginning in 2022.
Despite the Trump administration’s apparent green light last month, Nvidia did not receive licenses for chip exports to China over the ensuing weeks.
The deal recently struck between the Trump administration and Nvidia will allow the company to obtain the export licenses and begin the sale of chips in China, a White House official said. AMD, which offers an MI308 chip for Chinese customers, will also receive permission for such sales, the official added.
Some observers have opposed the sale of advanced AI chips in China, saying the technology would help the country keep up with the U.S. in the fast-growing AI industry. The Trump administration has previously challenged the view, describing Nvidia’s H20 chip as inferior to similar products sold in the U.S.
“We don’t sell them our best stuff, not our second best stuff, not even our third best,” Commerce Secretary Howard Lutnick told CNBC last month, referring to Nvidia’s H20 chip as its “fourth best.”
In a statement to ABC News, Nvidia did not directly comment on the terms of the agreement.
“We follow rules the U.S. government sets for our participation in worldwide markets,” Nvidia said. “While we haven’t shipped H20 to China for months, we hope export control rules will let America compete in China and worldwide. America cannot repeat 5G and lose telecommunication leadership. America’s AI tech stack can be the world’s standard if we race.”
AMD did not immediately respond to ABC News’ request for comment.
Chipmakers pay share of revenue to U.S. government
In exchange for approval of chip sales in China, Nvidia and AMD have agreed to pay the U.S. 15% of revenue derived from such business.
The move marks the Trump administration’s latest intervention in the affairs of an individual company. When Japan-based Nippon Steel acquired U.S. Steel in June, the Trump administration received a “golden share” that affords the White House significant influence over the company. The golden share allows the Trump administration to influence the makeup of the company’s board and assert veto power over a host of major decisions, though the White House does not retain a financial stake in the firm.
More recently, Trump last week called on the CEO of Intel, Lip-Bu Tan, to resign. In a message posted on social media, Trump accused Tan of being “HIGHLY conflicted.”
Trump did not explain why Tan should resign, nor did he provide evidence for his allegation of a conflict of interest. But the post came after Republican Sen. Tom Cotton raised concerns about Tan’s alleged ties to China. Tan is still the company’s CEO.
ABC News’ Michelle Stoddart contributed to this report.
(NEW YORK) — Weak jobs data came out hours before President Donald Trump fired the head of labor statistics. A report on gross domestic product indicated a slowdown of growth over the first half of the year. A sweeping round of tariffs hit nearly 70 countries.
These events — all since last week — prompted some analysts to warn of a recession and others to raise concerns about the political independence of gold-standard U.S. economic data.
The stock market, however, hardly blinked.
The tech-heavy Nasdaq has ticked up 0.4% since the end of trading last Tuesday, a day before the GDP report marked the first in a series of major developments. Over that same period, the S&P 500 has dropped 0.6%, while the Dow Jones Industrial Average has fallen 1.4%.
Despite mixed results, the indexes remain well above where they stood three months ago. The Nasdaq has surged 20% since May, while the S&P 500 has jumped 13%. The Dow has climbed 7% over that period.
Analysts who spoke to ABC News attributed investor optimism to robust corporate profits, the prospect of interest rate cuts at the Federal Reserve and an abiding expectation that Trump will not return to the steep tariffs initially rolled out in April.
The resilient stock market has generated a momentum of its own, some analysts added.
“The mindset of the market is to embrace risk because that brings rewards rather than losses — keep shrugging it off,” Steve Sosnick, chief strategist at trading firm Interactive Brokers, told ABC News. “That can paper over a lot of concerns.”
The economy added an average of about 35,000 jobs over three months ending in July, which marks a major slowdown from roughly 128,000 jobs added monthly over the prior three months, U.S. Bureau of Labor Statistics data on Friday showed. Employers are hiring at their slowest pace since 2020.
Two days earlier, fresh GDP data indicated average annualized growth of 1.2% over the first half of 2025, well below 2.8% growth last year.
Hours after the release of the jobs report on Friday, Trump fired BLS Commissioner Erika McEntarfer, an appointee of former President Joe Biden who was confirmed by a bipartisan vote in the Senate in 2024.
In a social media post, Trump volleyed sharp criticism and baseless accusations at McEntarfer, claiming without evidence that the data had been “manipulated.” The jobs report featured revisions of previous months’ data, which is a routine practice.
“Trump touted his economic performance in a social media post: “The Economy is BOOMING under ‘TRUMP’ despite a Fed that also plays games, this time with Interest Rates.”
McEntarfer did not immediately reply to ABC News’ request for comment.
“It has been the honor of my life to serve as Commissioner of BLS alongside the many dedicated civil servants tasked with measuring a vast and dynamic economy,” McEntarfer said in a social media post after her dismissal. “It is vital and important work and I thank them for their service to this nation.”
The major stock indexes fell markedly last Friday, suggesting concern among traders about the weak jobs report. Within days, however, stocks had largely recovered the losses.
Alongside mixed signals from the economy, a series of major companies have released strong earnings, indicating a resilient corporate bottom line. The list of high-performers includes tech giants like Meta and Microsoft, which account for a disproportionately large share of the S&P 500.
“The markets like to focus on earnings,” Ed Yardeni, the president of market advisory firm Yardeni Research and former chief investment strategist at Deutsche Bank’s U.S. equities division, told ABC News. “They’ve been pretty impressive considering some of the economic data has looked soft of late.”
The outlook for the economy remains uncertain, leaving open the possibility of continued growth and soaring stocks, some analysts said. The economy has largely averted the type of widespread job losses that often accompany a recession. Consumer spending, which accounts for about two-thirds of economic activity, ticked higher over three months ending in June.
If the economy sours, the Federal Reserve will likely move forward with interest rate cuts, buoying the market, Sosnick said.
“There’s a belief that there’s nothing better for the market than a rate cut,” Sosick added.
Still, the combination of elevated tariffs and sluggish hiring could hurtle the U.S. toward an economic double-whammy known as “stagflation,” in which the economy slows while prices rise.
Potential stagflation poses difficulty for the Fed. If the Fed raises interest rates as a means of protecting against tariff-induced inflation under such a scenario, it risks stifling borrowing and slowing the economy further. On the other hand, if the Fed lowers rates to stimulate the economy in the face of a potential slowdown, it threatens to boost spending and worsen inflation.
“There’s definitely a possibility the market is getting it wrong on inflation,” Jay Ritter, a professor of finance at the University of Florida, told ABC News.
For now, markets remain opportunistic about current gains, rather than wary of possible headwinds that may emerge in the coming weeks or months, Sosnick said.
“This market is preferring to deal with the here and now than deal with the conceptual,” Sosnick added.
