Good morning,
Last week felt like a rerun of a week in July. U.S. equities posted a broadly negative week, with technology bearing the brunt of the selloff. The Nasdaq fell 2.02%, the Russell 2000 declined 1.60%, and the S&P 500 lost 1.39%. International markets fared somewhat better than the home team: developed markets declined just 0.54%, while emerging markets gained 1.24%, helped by a weaker U.S. dollar.
The story of the week was the continued pressure on long-dated U.S. Treasury yields, despite intervention from Treasury Secretary Bessent midweek that more than doubled Treasury buybacks. The 30-year Treasury yield ended the week 2 basis points higher, near its highest level in two decades.
The key events this week begin with the Jackson Hole Symposium, where Fed Chair Warsh is expected to use the annual gathering to make the case for Fed reforms. His comments, along with those from Treasury Secretary Bessent, are likely to help set the direction for Treasury yields heading into September.
In equities, the main event is Nvidia’s earnings announcement Wednesday afternoon. It feels like we say that every quarter—which doesn’t make it any less true. Nvidia remains a major catalyst for the AI trade and technology sentiment more broadly. With chipmakers selling off again before the open this morning, a boost from Nvidia could be an oasis in what has become a desert for semiconductor stocks over the past two months. No tears for the semis, though—the semiconductor index is still up 66% YTD.
And then there is always Iran, where tactics appear to be shifting from military confrontation toward economic pressure. That may continue to fill headlines, but for now it seems less likely to have a meaningful impact on markets.
Bottom line for this last week of summer: Jackson Hole and Nvidia earnings are the one-two punch. Together, they will likely determine whether last week’s selloff deepens or begins to stabilize.
See you next Monday – have a great week.
Be well,
Mike