Category: Newsletter

Markets shifted focus from earnings to macro as a blow‑out August jobs report (162k payrolls; 4.1% unemployment) lifted odds of a September Fed hike. US indices were flat to slightly lower, while oil surged on US‑Iran tensions and Treasuries sold off; gold lagged as real yields climbed.

U.S. markets closed the week higher as exceptional Q2 earnings S&P 500 profits up 52%, the strongest since 2021—offset a hawkish Jackson Hole speech from Fed Chair Kevin Warsh that lifted rate‑hike bets and Treasury yields. Geopolitical risks in Iran and U.S. debt concerns kept volatility elevated, with investors now focused on incoming inflation and labor data.

Markets confront a Treasury–Fed tug-of-war as Scott Bessent’s aggressive yield-capping fades and Chair Warsh’s independent stance dominates ahead of Jackson Hole. Divergent signals from resilient PMIs to Walmart’s soft guidance, plus Iran-driven oil and gold strength, set a cautious tone into Nvidia’s Q2 results and Warsh’s Friday keynote.

Markets digest cooling inflation and softer spending as the Fed’s September hike odds recede, while Nvidia’s $500bn AI financing pact with Wall Street giants reinforces tech leadership. Gold and oil gain on geopolitical premiums, even as Treasury yields decline and equities log another weekly advance.

Softer July payrolls and downward revisions eased expectations for a September Fed hike, while moderating wages and lower oil prices supported duration, gold, and rate-sensitive equities. Strong earnings and AI-led semiconductor gains propelled U.S. stocks to records, reinforcing a constructive risk backdrop ahead of CPI; sticky inflation remains a threat.

Oil’s spike proved short-lived as Trump signaled a truce with Iran over the Hormuz corridor, sending Brent tumbling over 6% from its highs, but the bigger story was a genuinely divided Fed holding rates under new Chair Warsh while yields surged. Equities still gained on strong earnings, though AI-era winners and losers split sharply: Microsoft and Amazon soared while Meta and Apple stumbled.

Markets closed a volatile week lower as oil, inflation fears, and mega-cap tech earnings collided. Brent crude swung wildly on Middle East escalation before a US-Iran strike pause brought relief, while Alphabet and Tesla’s soaring AI capex spooked investors, dragging the Nasdaq down nearly 2%.

Oil spiked 10-14% as US-Iran strikes intensified Hormuz tensions, while soft CPI/PPI data eased Treasury yields but left Fed rate-cut odds hanging on energy-driven inflation risks. US equities slid on AI capex jitters, with semiconductors and Netflix leading losses despite strong Q2 earnings. Gold dipped toward $4,000 before recovering, torn between dovish inflation and hawkish oil-driven rate expectations.

Geopolitics dictated market tone last week as Hormuz-linked oil volatility, a hawkish Fed tilt, and rising yields tested investor nerves. Yet US equities ground out gains, powered by Meta’s blockbuster rally and SK Hynix’s record-breaking IPO. Focus now shifts to a pivotal week ahead with CPI data, Fed Chair Warsh’s testimony, and Q2 earnings season kicking off. And, of course, the renewed escalation in hostilities between US and Iran.

A U.S.-Iran diplomatic breakthrough triggered a de-escalation pivot across global markets, sending oil prices down 8.70% as the Straits of Hormuz partially reopened. U.S. equities saw a sharp rotation out of tech into defensives, while Treasury yields retreated on deflationary relief. Eyes now turn to a holiday-shortened week packed with front-loaded labor data that will test Fed Chair Warsh’s hawkish resolve