Dow hits a record, and the Fed starts talking about hikes

Good morning. Stocks wore two faces last night. The Dow closed at its 24th record of the year, while the Nasdaq slipped as tech wobbled. Strong earnings held the index up, and oil eased after Iran said it agreed with Oman on routes through the Strait of Hormuz.

The rate story was different. Minneapolis Fed President Neel Kashkari said it is time to start slowly raising rates, and Fed Governor Lisa Cook said she is prepared to act on a hike because inflation is still too high. That is the opposite of the cuts some in the market had hoped for.

The economic data deepens the dilemma. Private payrolls rose by only 44,000 in July against forecasts of 70,000, and almost all of it came from health care. Services activity kept expanding, but rising costs are making companies hold back on hiring: a resilient economy with weak job creation. The 30-year mortgage rate also climbed to 6.81%, its highest in over a year.

Among individual stocks, Eli Lilly stood out with sales up 48% on weight-loss drug demand. SpaceX went the other way, sliding after a big AI spending plan came out alongside its first quarterly results.