By MATT OTT, Associated Press Business Writer

WASHINGTON (AP) — The number of Americans filing for jobless benefits inched up modestly last week as business continue to retain staff despite economic uncertainty around U.S. trade policy.

The Labor Department reported Thursday that jobless claims for the week ending July 26 ticked up by 1,000 to 218,000, less than the 225,000 new applications analysts forecast. Applications for unemployment aid are viewed as representative of layoffs.

It was the first time in seven weeks that benefit applications rose, although layoffs remain at historically low levels.

The four-week average of claims, which evens out some of the week-to-week fluctuations, fell by 3,500 to 221,000.

The total number of Americans collecting unemployment benefits for the previous week of July 19 was unchanged at 1.95 million.

By MICHELLE L. PRICE, Associated Press

WASHINGTON (AP) — President Donald Trump said Canada’s announcement it will recognize a Palestinian state “will make it very hard” for the U.S. to reach a trade agreement with its northern neighbor.

Trump’s threat, posted in the early hours Thursday on his social media network, is the latest way he has sought to use his trade war to coerce countries on unrelated issues and is a swing from the ambivalence he has expressed about other countries making such a move.

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The Republican president said this week that he didn’t mind British Prime Minister Keir Starmer taking a position on the issue of formally recognizing Palestinian statehood. And last week he said that French President Emmanuel Macron’s similar move was “not going to change anything.”

But Trump, who has heckled Canada for months and suggested it should become its 51st U.S. state, indicated on Thursday that Prime Minister Mark Carney’s similar recognition would become leverage ahead of a deadline he set in trade talks.

“Wow! Canada has just announced that it is backing statehood for Palestine,” Trump said in his Truth Social post. “That will make it very hard for us to make a Trade Deal with them. Oh’ Canada!!!”

Trump has threatened to impose a 35% tariff on Canada if no deal is reached by Friday, when he’s said he will levy tariffs against goods from dozens of countries if they don’t reach agreements with the U.S.

Some imports from Canada are still protected by the 2020 United States Mexico Canada Agreement, which is up for renegotiation next year.

Carney’s announcement Wednesday that Canada would recognize a Palestinian state in September comes amid a broader global shift against Israel’s policies in Gaza.

Though Trump this week said he was “not going to take a position” on recognizing a Palestinian state, he later said that such a move would be rewarding Hamas, whose surprise Oct. 7, 2023, attack on Israel prompted a declaration of war and a massive military retaliation from Israeli Prime Minister Benjamin Netanyahu.

Trump’s new cudgel against Canada comes after he sought this week to impose steep tariffs on Brazil because it indicted its former President Jair Bolsonaro, a Trump ally who like the U.S. president has faced criminal charges for attempting to overturn the results of his election loss.

Citing a personal grievance in trade talks with Brazil and now Canada’s symbolic announcement on a Palestinian state adds to the jumble of reasons Trump has pointed to for his trade war, such as stopping human trafficking, stopping the flow of fentanyl, balancing the budget and protecting U.S. manufacturing.

By TERESA CEROJANO and MATT OTT, Associated Press

Wall Street was on track to open with solid gains Thursday on the strength of some blowout quarterly reports from the AI-obsessed technology sector.

Futures for the technology-heavy Nasdaq climbed 1.2% before the opening bell, while S&P 500 futures rose 0.9%. Futures for the Dow Jones Industrial Average lagged its counterparts but was still up 0.2%.

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Facebook parent company Meta jumped 11.6% overnight after the social media giant crushed Wall Street’s sales and profit targets even as the company continues to pour billions of dollars into artificial intelligence.

Helped by higher advertising and a growing user base on its social media platforms, Meta earned $18.34 billion in the quarter, a 36% increase over the same quarter a year ago. Revenue jumped 22%.

Also posting stellar results was Microsoft, whose shares climbed 8.4% overnight after it also posted better results than analysts were expecting. Microsoft said that annual revenue for its Azure cloud computing platform has surpassed $75 billion, up 34% from a year earlier. Azure is a centerpiece of Microsoft’s efforts to shift its focus to artificial intelligence. Until Wednesday, the company hadn’t disclosed how much money it makes.

Microsoft’s fiscal fourth-quarter profit of $34.3 billion was up 24% over last year.

Early Thursday, CVS Health topped Wall Street expectations for the second quarter and hiked its full-year forecast again, as the health care giant rallies under new management after a forgettable 2024 that saw the sector hammered by rising costs.

CVS, whose shares rose 7.5% before markets opened, said all three of its business segments saw revenue growth of 10% or more.

Amazon and Apple report quarterly results after the markets close Thursday.

Also Thursday, the U.S. releases new data on inflation and layoffs. On Friday, the Labor Department releases its July jobs report.

Stocks were pressured by rising Treasury yields after the Federal Reserve Chair Jerome Powell hinted that a rate-cut in September is not a sure thing. The Fed has left its rate alone for the past five meetings as inflation remains stubbornly above the central bank’s 2% target.

The odds of a rate cut in September, according to futures pricing, fell from nearly 60% before the meeting to just 45% after the press conference, the equivalent of a coin flip, according to CME Fedwatch.

President Donald Trump has clamored for a rate cut, which would likely give the job market and overall economy a boost, but it could also risk fueling inflation when Trump’s tariffs may be set to raise prices for U.S. consumers. The Fed’s double mandate is to seek maximum employment, while keeping inflation in check.

Elsewhere, in Europe at midday, Germany’s DAX ticked down 0.1%, while Britain’s FTSE 100 added 0.4%. In Paris, the CAC 40 was 0.3% higher.

In Asian trading, Japan’s Nikkei 225 rose 1.1% to 41,069.82 after the Bank of Japan kept interest rates steady at 0.5% and raised its inflation projections.

In Seoul, the Kospi edged down 0.3% to 3,245.44 after South Korea reached a 15% tariff deal with the U.S., with no levies on American goods like cars, trucks and farm products. The deal also includes South Korea’s purchase of $100 billion in U.S. gas and oil and $350 billion worth of investments in the U.S.

Hong Kong’s Hang Seng index fell 1.5% to 24,803.18, while the Shanghai Composite Index slid 1.2% to 3,573.21. Australia’s S&P ASX 200 shed 0.2% to 8,742.80. India’s BSE Sensex rose 0.2% to 81,642.81. Taiwan’s TAIEX added 0.3% to 23,542.52.

China’s manufacturing activity was weaker than expected in July, with data on Thursday showing the official manufacturing purchasing managers’ index PMI slowed to 49.3, down from 49.7.

In energy trading, U.S. benchmark crude oil lost 46 cents to $69.54 per barrel, while Brent crude, the international standard, shed 53 cents to $71.96 per barrel.

The U.S. dollar rose to 149.90 Japanese yen from 149.51 yen. The euro rose to $1.1445 from $1.1404.

LEMOORE, Calif. (AP) — A pilot was safe after an F-35C fighter jet crashed near a central California naval installation on Wednesday, officials said.

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Authorities received a report that a military jet had crashed and was engulfed in flames around 6:40 p.m., the Fresno County Sheriff’s Office said in a social media post. Responding deputies, firefighters, California Highway Patrol officers and EMS personnel found the wreckage in a cotton field just north of Lemoore Naval Air Station. The pilot, who had ejected, was found with a parachute in a nearby field, the sheriff’s office said. He was flown to a hospital for evaluation and was expected to be OK.

Firefighters used a bulldozer to cut a path to the jet so fire engines could get close enough to extinguish the fire, the sheriff’s office said.

Naval Air Station Lemoore confirmed that the F-35C attached to the VFA-125 Rough Raiders went down near the installation. The pilot was safe after successfully ejecting and no other personnel were affected, the installation said in a statement posted on social media.