Market Beats | US Consumer Spending Rises Most in Four Months in July; US Ends De Minimis Tariff Exemption; US Airport Security Rules Loosen for First Time in Two Decades; US Stocks Retreat Ahead of Labor Day; Columbia Welcomes Largest-Ever Freshman Class Despite Federal Pressure; Meta Faces Turmoil as AI Leaders Clash; Citadel Securities Q2 Revenue Falls

—— US Consumer Spending Rises Most in Four Months in July; US Ends De Minimis Tariff Exemption; US Airport Security Rules Loosen for First Time in Two Decades; US Stocks Retreat Ahead of Labor Day; Columbia Welcomes Largest-Ever Freshman Class Despite Federal Pressure; Meta Faces Turmoil as AI Leaders Clash; Citadel Securities Q2 Revenue Falls

1. US Consumer Spending Rises Most in Four Months in July

Americans kept spending in July despite persistent inflation pressures.

According to Bureau of Economic Analysis data released Friday, inflation-adjusted consumer spending rose 0.3%, the strongest monthly increase in four months. The gain was supported by income growth and driven by goods purchases.

The core personal consumption expenditures (PCE) price index — which excludes food and energy and is favored by the Federal Reserve — rose 0.3% from June and accelerated to 2.9% year-on-year, the highest since February. Rising services costs and the continued effects of President Donald Trump’s tariffs have fueled concerns that inflation could prove more persistent.

For now, consumers are still spending, but the durability of that momentum remains uncertain amid rising prices and a weakening labor market. Following the release, US equity futures pared losses, Treasury yields rose, and the dollar stayed firm. Traders continue to expect the Fed to cut rates at its Sept. 16-17 meeting.

At last week’s Jackson Hole conference, Fed Chair Jerome Powell cautiously opened the door to a September rate cut, citing growing risks to the labor market. However, he also warned that the inflationary effects of tariffs are “now clearly visible.” Policymakers will receive additional data on inflation and employment before that gathering.

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2. US Ends De Minimis Tariff Exemption

What was once a minor loophole has become central to President Donald Trump’s trade overhaul.

The long-standing US “de minimis” tariff exemption, dating back to the 1930s, officially ended on Friday. Since 2016, goods valued under $800 had been allowed into the country duty-free — a threshold unusually high by global standards. The result was a surge of small packages, nearly 1.4 billion in 2023, a 600% increase from a decade earlier, according to US Customs and Border Protection. Roughly three-quarters of those parcels originated from China, with platforms like Shein and Temu accounting for a large share.

Pandemic-era shoppers in the US flocked to these cheap, direct-to-doorstep imports, but the deluge stoked Washington’s concerns about unfair competition against domestic small businesses, the inflow of illegal drugs like fentanyl, and products tied to forced labor slipping through unchecked.

Trump followed through in May by removing China and Hong Kong from de minimis eligibility. Before that move, an average of 4 million duty-free packages arrived in the US each day; now that figure has dropped to about 1 million.

Trade lawyers and industry experts note the crackdown is a bipartisan priority, and further restrictions on other countries could be next, reshaping global e-commerce supply chains.

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3. US Airport Security Rules Loosen for First Time in Two Decades

Nearly 20 years after shoe removal and liquid limits became ingrained in US air travel, passengers are finally seeing major relief.

As of last month, the Transportation Security Administration (TSA) no longer requires travelers to remove their shoes for screening. The next step under consideration is relaxing the long-standing 3.4-ounce liquid limit for carry-ons, though it’s not yet clear if it will apply nationwide or only in select airports at first. “These changes may sound small in isolation, but collectively they have a significant impact on passengers,” said Acting TSA Deputy Administrator Adam Stahl.

The TSA also launched a pilot program allowing certain international travelers connecting through the US — starting with flights from London — to skip re-screening during layovers. Meanwhile, the agency is expanding biometric identity verification.

The revamp, pushed by the Trump administration, marks a turning point from the strict post-9/11 security era that forced travelers to arrive hours early, wear easy-to-remove shoes, and check bags just to carry liquids like perfume. The inconvenience spawned fast-lane companies such as Clear and drove millions to enroll in TSA PreCheck.

With new changes, air travel could become far smoother for passengers nationwide.

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4. US Stocks Retreat Ahead of Labor Day

US equities slipped Friday in thin trading before the Labor Day holiday as investors booked profits and digested stubborn inflation data.

The S&P 500 fell 0.3% in early New York trading, dipping below 6,500 but still on pace for a fourth straight monthly gain and a flat week overall. The Nasdaq 100 slid 0.5%. Trading volume was nearly 25% below the 30-day average. Historically, the S&P has averaged a 0.1% decline on the Friday before Labor Day over the past two decades, according to the Stock Trader’s Almanac.

On the corporate front, Dell Technologies dropped 10% after weaker AI server sales and slimmer margins. Marvell Technology tumbled 16% on disappointing data center revenue.

Macro data showed US consumer spending rose 0.3% in July, the biggest increase in four months, while core PCE inflation accelerated to 2.9% year-over-year — well above the Fed’s 2% target. That leaves questions over whether policymakers have room to cut rates, despite Fed Governor Christopher Waller reiterating his call for lower borrowing costs.

“Inflation is creeping higher but still in line with forecasts, and this morning’s PCE data only raises the odds of a Fed cut next month,” said Chris Zaccarelli, CIO at Northlight Asset Management.

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5. Columbia Welcomes Largest-Ever Freshman Class Despite Federal Pressure

Columbia University has enrolled 1,806 students in the Class of 2029, a 20% increase from last year, marking the largest freshman class in its history. The surge eased administrators’ concerns that two years of campus turmoil and President Donald Trump’s crackdown on higher education would dampen enrollment.

The university admitted more students — including an unusually high number from its waiting list — amid fears that applicants might shy away due to campus controversies or face visa hurdles. Yet commitments largely held steady. Acting President Claire Shipman told students in a letter that Columbia will accommodate the expanded class by adding instructors, optimizing classroom space, hiring more advisers, and expanding dining options.

Trump’s administration this year froze billions in federal research funding and tightened student visas, accusing schools like Columbia and Harvard of mishandling antisemitism incidents and targeting their diversity programs. In July, Columbia agreed to pay $221 million to the federal government to restore $400 million in suspended research funding and safeguard hundreds of millions more at risk. The settlement also required the school to hand over admissions demographic data, install an independent monitor, and reduce financial reliance on international students, who currently make up about 40% of its student body.

The development highlights how the administration’s broader immigration restrictions are reshaping the environment for foreign students in the US.

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6. Meta Faces Turmoil as AI Leaders Clash

California Governor Gavin Newsom said Thursday he is deploying California Highway Patrol officers across major cities, responding to President Donald Trump’s threats to send the National Guard into San Francisco and neighboring Oakland.

The CHP officers will work alongside local law enforcement in San Diego, Los Angeles, and the Bay Area, according to the governor’s office. A spokesperson didn’t specify how many officers would be sent or for how long.

Trump has repeatedly threatened to expand National Guard deployment beyond Washington, DC, to other large, Democratic-led cities. He previously placed the DC Police Department under federal control and ordered about 2,000 troops to patrol the capital. Cities singled out included Chicago, Baltimore, Oakland, and San Francisco.

In June, Trump sent thousands of National Guard troops to Los Angeles during immigration raids and anti-deportation protests — the first time in decades a president deployed the Guard to a US city without a request from state or local authorities. Nearly all of those troops were demobilized by the end of July, Newsom’s office said.

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7. Citadel Securities Q2 Revenue Falls

Citadel Securities reported Q2 net trading revenue of $2.39 billion, down 8.4% from the prior quarter, but still achieved a record $5.77 billion in the first half, thanks to a booming Q1. Net income rose 20% in H1 to $2.66 billion, although Q2 profit fell 23% to $922 million.

Trading activity has stayed elevated amid President Donald Trump’s tariff wars, creating opportunities for market makers. Led by CEO Peng Zhao, Citadel Securities has expanded into new asset classes and regions. In 2024, the firm recorded $9.7 billion in net trading revenue, its highest ever.

Compensation and benefits rose to $1.81 billion in the first half, up from $1.55 billion a year earlier. Total equity climbed to $13.2 billion by the end of Q2 from $11.1 billion at year-end.

Citadel Securities, which handles more than one-third of US retail stock trades, is also scaling into corporate bond trading to serve institutional clients

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