By Megan Leonhardt | Wednesday, August 6

Moving Parts. Investors had a lot of news to sift through today, but ultimately stocks shrugged off tariff concerns as Apple gains spurred a tech rally. 

The Nasdaq Composite closed up 1.2% to finish within striking distance of its first record close in more than a week. The S&P 500 was up 0.7%, which also put it near another high. And the Dow Jones Industrial Average rose 81 points, or 0.2%.

There might not have been any big economic news driving the markets today, but policy updates out of Washington D.C., some big earnings, and a weak 10-year Treasury note auction whipped stocks around. 

Apple was the driving force on the day, boosting a tech rally thanks to its own 5.1%  gain on the news that the tech giant would invest $100 billion more into building out its manufacturing capabilities on U.S. soil. Apple's U.S. investment now totals $600 billion over the next four years.

Retailers also had a good day after Shopify and Capri Holdings surged on quarterly results.

The boost to the long-term expansion of U.S. manufacturing came as President Donald Trump announced an additional 25% tariff on India due to its purchase of Russian oil, bringing the the tariffs on goods imported from the country to 50%. 

Meanwhile Switzerland's president left D.C. without a deal to lower the 39% tariff the White House has levied on the country. 

Stocks didn't react much to the first weak 10-Year auction since February --but it did boost yields. My colleague Karishma Vanjani reports that the Treasury sold $42 billion in 10-year debt at 4.255%. That's nearly one basis point above the yield seen in the pre-bidding deadline.

She explained: 

The auction was weak likely because 10-year yields have fallen considerably over the past four days, and investors weren’t willing to gobble up debt at current rates. Last month, investors got 4.362% on their 10-year debt. In the two months prior, investors received 4.421% and 4.342%, respectively. That likely pushed investors to demand higher yields than the roughly 4.255% offered to them at this auction.

If this trends continues, it could signal the start of a buyers’ strike. And then expect some pretty intense reactions. 

Meanwhile, Disney beat earnings expectations this morning, raised its guidance, and unveiled two deals that will bolster its sports streaming offerings -- yet none of that provided much magic for the stock, my colleague George Glover reports. Investors were likely less-than-pleased with the fact that operating income for the company’s entertainment segment slid 15% as the Disney film studio posted a loss.

DJIA: +0.18% to 44,193.12
S&P 500: +0.73% to 6,345.06
Nasdaq: +1.21% to 21,169.42

The Hot Stock: Arista Networks +17.5%
The Biggest Loser: Super Micro Computer -18.3%

Best Sector: Consumer Discretionary +2.1%
Worst Sector: Healthcare -1.5%

Slow-Moving Train Wreck?

That headline doesn't refer to the overall U.S. economy, though some economists are worried. Instead, it's about what some of those economists see as the slow decay in the quality of national economic data—a real cause for alarm. 

The integrity of the U.S. government’s economic data was questioned by President Trump after the Bureau of Labor Statistics' latest release of July employment data.

While there is no evidence for Trump's claim of political bias when it comes to the data, concerns about the ability of U.S. statistical agencies to produce timely, reliable economic data have been mounting for years.

U.S. statistical agencies have grappled with lower survey response rates and budget shortfalls for more than a decade, which has hindered their collection and analysis of economic data. The Covid-19 pandemic laid bare many of these challenges, exacerbating the deterioration of survey participation and requiring agencies to rely more frequently on estimates and smaller sample sizes. The budget and personnel cutbacks at federal agencies this year have further added to the strain.

The good news is that economists believe the current economic data is still sound. The bad news? There is no quick or obvious fix for the longstanding problems. 

Erica Groshen, senior economics advisor at Cornell University and a former BLS Commissioner, calls the challenges facing the Bureau a “slow-moving train wreck.” At some point, she says, “there will be a problem” with worsening U.S. economic data quality if statistical agencies aren’t empowered to develop new ways to collect and analyze data.

To improve data quality in the long run, the agencies will need to develop a modern survey methodology, and blend survey data with existing government records to create composite measures, Groshen says. But this would require much more funding, and more information-sharing across agencies than currently in force, she adds.

Read more on what's driving the data volatility here.