Last updated: August 26, 2026, 2:41 PM ET
Equities
US stocks treaded water on Wednesday as investors digested the Federal Reserve’s preferred inflation gauge and waited for earnings from chipmaking giant Nvidia Corp. The Nasdaq composite led major indexes higher as the benchmark Treasury yield notched its biggest decline since June, with another drop in oil prices and tepid economic data quelling inflation concerns. European stocks held steady as banking stocks advanced ahead of the high-stakes earnings report, while shares of European semiconductor companies were mixed as investors gauged appetite for artificial-intelligence chips. Stocks moved lower ahead of the Nvidia report, with the world’s most valuable company in focus.
The FTSE 100 eyed a seven-day winning streak as oil extended its drop, buoying European bonds. Asian stocks were set to gain as oil extended declines, with Wall Street traders sending bonds lower and stocks wavering on economic reports that did little to alter bets the Fed will raise rates this year. Tech stocks were gaining, with the Nasdaq leading indexes higher as effects of Treasury Secretary Scott Bessent’s “D-Day” sanctions speech looked contained. French stocks are about to confront a ramp-up in political risks.
Rates & FX
Treasuries slipped marginally underperforming peers as investors awaited inflation data for clues on whether policymakers will need to raise interest rates. The dollar remained higher after the Fed’s preferred gauge remained above the 2% inflation target, while the WSJ Dollar Index declined 0.1%, down two of the past three trading days. The greenback rose by the most in nearly four weeks, recovering about half of the losses triggered by Bessent’s surprise move last week to prop up the bond market. Treasury yields rose as data kept Fed bets in play.
The Personal Consumption Expenditure index held steady in July, remaining elevated amid high energy costs. Morgan Stanley Investment Management’s Vishal Khanduja is scaling back bets against long-term US bonds, saying Bessent is prepared to act again. Citadel Securities’ Frank Flight, who warned of a “cruel summer” for bond investors, now sees the balance of risks tilted toward a rally, citing crowded bearish positioning. Early signs suggest the “Bessent Put” might actually be working, and key market metrics show a short squeeze emerging in long bonds. Bessent faces a credibility test in his quest to tame markets.
The US Treasury is on a collision course with the Federal Reserve, as increased purchases of debt threaten to undermine central bank chief Kevin Warsh’s bid to tame inflation. Kevin Warsh is scheduled to deliver his first address at the Fed’s annual conference in Jackson Hole with government bond markets on edge and inflation risks resurfacing. Legendary hedge-fund investor Stanley Druckenmiller delivered a surprising critique of Bessent with the help of AI, saying he was “kind of proud of using it.” America’s spiraling debt crisis has reached $40 trillion, with short-term fixes unlikely to turn the tide.
Commodities & Energy
US supplies of diesel have fallen to the lowest seasonal level ever, threatening to push prices even higher for the global economy’s workhorse fuel just as heating and agricultural seasons kick into gear. The cost of diesel has surged because of the war in Iran and Ukrainian attacks on Russian refineries, helping oil companies and hurting consumers. Europe’s diesel supply situation has gotten so tight that the region is drawing on imports from Mexico for the first time in seven years as the Iran war and a halt in Russian cargoes upends historical trade flows. The world is relying heavily on US refineries just as those plants are being pushed to their limits, leaving global fuel markets with little margin for error.
Oil futures extended their decline into a third session with renewed moves seen toward a reopening of the Strait of Hormuz after the US outlined tighter economic sanctions on Iran. Iran and Oman said they would create a temporary shipping lane and clear mines in the waterway, and global oil prices eased after the joint announcement. Brent crude retreated to $85 as markets turned to Nvidia earnings, while Meta stock slipped after settling its child-safety suit. Oil futures posted back-to-back losses as the US tightens the economic squeeze on Iran, raising expectations the measures could bring Tehran to the negotiating table.
Freight rates remain at record highs while oil prices fall back on talks between Iran and Oman, though the shipping boss warned the Iran war risks a Ukraine-style stalemate. Iranian tankers, cut off from home ports by the US blockade, are gathering off the Sri Lankan coast seeking shelter close to territorial waters. The world’s top container shipper MSC Mediterranean Shipping Co. has suspended new bookings to and from Russia’s Novorossiysk port after one of its vessels was attacked by a drone. The US has vowed to go after more than Iran’s oil, threatening sanctions on its gold, crypto, and aviation industries.
Commercial crude oil stockpiles, excluding the Strategic Petroleum Reserve, rose by 95,000 barrels to 428.9 million barrels in the week ended Aug. 21. US natural gas futures were higher with several more weeks of hot weather likely to drive cooling demand, though prices later slipped in rangebound trading after two days of gains. Natural gas has overtaken oil as the biggest inflation concern for European bond traders as depleted supplies threaten a resurgence in price pressures.
Gold traded broadly rangebound with traders waiting for Warsh to speak at Jackson Hole, consolidating after a five-day rally as investors turned focus to the Fed’s rate path. Copper rose for a fourth day, closing in on a record high as short-term supplies continued to look tight despite an easing of last week’s severe market squeeze. Hochschild Mining shares jumped after first-half earnings soared as average gold prices rose 47% and silver prices were 130% higher.
Deals & Corporate
Victory Capital Holdings agreed to acquire First Eagle Investments for about $7 billion, a deal the companies said will create one of the largest publicly traded traditional asset managers in the US. Asset management deal volumes have reached $53.8bn this year, the highest since at least 1995 according to Dealogic, as Vanguard and Victory Capital bet on scale amid fund industry consolidation. The world’s second-biggest investment firm is making a bigger push into financial advice with its $4 billion acquisition of wealth management platform Altruist.
UK-based sports streaming platform DAZN is expanding further into the US with the acquisition of EverPass Media, which holds the commercial rights to live sports properties such as NFL Sunday Ticket. SoftBank Group Corp. is talking with investment banks about a potential $10 billion to $20 billion bond offering to help refinance a loan for its investment in OpenAI. Shein’s existing investors are agreeing to a six-month lock-up on new shares allocated to them in the fast-fashion retailer’s Hong Kong IPO, which is preparing to list at a quarter of its peak valuation after falling from $100bn to $27bn.
KNDS NV is set to restart investor meetings about a possible IPO this year after a downturn in defense stocks thwarted its earlier plans. Mota-Engil SGPS SA is set to sign a 30-year concession with the Democratic Republic of Congo to operate a key copper and cobalt railway, potentially backed with up to $1 billion of US financing. Prudential Plc plans to sell a 2% stake in India’s second-largest asset manager for as much as $327 million to comply with minimum public shareholding rules. Siemens Energy plans to spin off its Transformation of Industry unit, potentially bringing in external investors or undertaking a capital markets transaction.
Mark Walter’s TWG Global insists there is no “fire sale” and “no fraud,” hitting out at “multipronged attacks” on the investment empire which has stakes in high-profile sports teams. Investors are questioning a $4.1 billion takeover of Brighthouse Financial because of some parallels to Walter, whose troubles are disrupting the insurance world’s hottest trade. Guggenheim Investments is telling lenders that affiliates may buy portions of a loan issued by its financing entity after the debt was hard hit. Insurers are piling into deals allowing banks to offload default risk, with the market for synthetic risk transfers booming in recent years.
Earnings & Corporate News
Nike is on pace for its worst year since Michael Jordan’s 1993 retirement, when his exit created a headache for the sneaker maker. Abercrombie & Fitch lifted its outlook as profit and sales rose, benefiting from tariff refunds and consumers’ continued willingness to buy new clothes despite inflationary pressures. Bath & Body Works logged higher profit in the quarter after its digital business returned to growth for the first time in five years, though the soaps and fragrances retailer remains cautious. Kohl’s recorded lower sales and profit in the second quarter, with low- and middle-income consumers in particular pulling back on spending.
J.M. Smucker swung to profit as sales climbed, lifting its outlook and now expecting net sales to decline just 1% to 2% in fiscal 2027 compared with a prior forecast of 3% to 4%. Zoom Communications revenue rose on enterprise growth and the video conferencing company bumped up its guidance for the year, though its current-quarter earnings guidance came in short of Wall Street’s forecast. China’s Li Auto posted a second consecutive quarter of losses even as it tried to spur demand by launching new models. Domino’s Pizza Enterprises shares tumbled the most in about six months as the struggling fast-food chain reported a further decline in sales across several markets.
Cnooc, China’s biggest offshore oil and gas driller, said first-half profits rose due to a surge in global energy prices. Intuit’s CFO discussed the tough choice to lower guidance amid an AI shift. Samsung must pay Swatch $11.6mn over copycat smartwatch apps, a London court ruled, though the Swiss watchmaker had sought damages of as much as $170mn. Alibaba’s efforts to revive sentiment after its $10 billion share placement have failed to dispel investor concerns over how it chose to finance its AI ambition. Braskem’s $11 billion debt rework puts the spotlight on Petrobras.
Tech & AI
Nvidia faces a $1.5 trillion question its earnings can’t answer, as the company’s $200bn “balance sheet-as-a-service” model draws scrutiny. Microsoft is leaving investors flying blind on its AI businesses, standing out for its lack of transparency from capex to its flagship cloud platform. Anthropic thinks its potential revenue is greater than SpaceX’s, with its $30tn total addressable market estimate unbelievable because it’s meant to be, as the trillion-dollar TAM wars heat up. The AI prodigy who won over Silicon Valley lost $45 billion. Zoom revenue rose on enterprise growth.
SpaceX will spend $100 billion on a spaceport in Louisiana, its second private launch site after Starbase in South Texas, with the rocket company’s plans to transform an area known for duck hunting dividing locals. Elon Musk’s company faces formidable challenges in launching millions of satellites into orbit to power AI, as its orbital data centre bet tests physics and finance. Wall Street players underwriting the colossal data centre asset class are looking to limit exposure, as the risks of investing $7tn in AI data centres multiply. Bill Gates called for “human reserved” jobs to protect the labour force from AI, warning the technology will usher in “one of the most turbulent times in human history.”
XPeng bets robots will be more profitable than its cars, with co-president Brian Gu thinking margins will eventually eclipse those of the core electric-vehicle business. YMTC is challenging Korean champions in the flash memory race, setting out Nand production ambitions in investor meetings for a $5bn Shanghai IPO. Binance has hired two senior compliance executives from Crypto.com as the exchange bolsters ranks after staff departures and ongoing regulatory scrutiny. Granola’s Chris Pedregal says people are starting to question what’s actually useful as AI percolates through the workplace. The quantum threat stands as fake “Grand Theft Auto” demos unleash malware.
Crypto & Digital Assets
Investors are no longer choosing between gold and Bitcoin as hedges against fiscal anxiety — they’re buying both, with Bitcoin and gold ETFs drawing $7 billion as the scarcity trade surges. Banks that fought against stablecoins are now considering launching their own, with executives on the defensive as companies outside the banking system launch coins. The Treasury has given the Bank of England a new legal objective to boost innovation in digital currencies as part of an effort to promote the UK as a hub for stablecoins. Prediction markets are gaining traction on trading floors.
Regulation & Legal
Meta agreed to pay up to $16.7bn to settle a children’s social media harm case relating to alleged failures of child protection that was getting under way in California. The social media giant settled with 47 states, the District of Columbia and US territories, agreeing to make major changes to its products over claims its platforms endangered children, in a landmark settlement worth up to $17.1 billion. Meta also agreed to set more time limits and enhance protections for young users on Instagram and Facebook, though it was short on some specifics. Landmark trials are testing a new legal strategy claiming that Meta, TikTok, Snap and YouTube caused personal injury through addictive products.
A Hong Kong court declined to remove Pricewaterhouse Coopers International Ltd. from a multibillion-dollar lawsuit brought by China Evergrande liquidators, ruling that liquidators can pursue PwC globally over the Chinese property giant’s collapse, a decision with potential to threaten Big Four firms’ partnership network model. Deloitte will pay the US administration $21.5mn to settle “discriminatory” practices probe, one of several professional services businesses targeted by the American Alliance for Equal Rights. The Trump administration has been probing major US companies under a novel use of a federal law meant to police federal contractors. The US audit regulator scrapped its investor advocate role as the Trump-era revamp accelerates.
Echo Star Corp. allegedly engaged in $1.5 billion of “unusual transactions” with its bankrupt subsidiary Hughes Satellite Systems Corp., according to the US Trustee who urged the court to appoint an examiner. Macquarie dumped KPMG after an Australian data scandal, with PwC retaining Australia’s most lucrative audit contract after a reversal by the financial services group. Interpath’s chief Mark Raddan was fined over confidentiality breaches before the restructuring firm’s sale by KPMG to private equity group HIG Capital. Forbes and Shook Research suspended rankings amid an investigation of a $6 million payment, and the former Forbes editor got $6 million for helping the magazine’s partner with a sale.
Trade & Tariffs
Canada said it will impose up to 50% tariffs on items from aluminum foil to dishwashers to fish, firing back in the trade war against Trump to help protect workers, producers and manufacturers harmed by new tariffs. Business owners are preparing for financial pain after the latest US-Canada trade talks collapsed, but many Canadians are embracing a show of resistance. While the president remains the most dominant figure in the world, other leaders and institutions are pushing back more vigorously than at the beginning of his second term, with deference turning to defiance in Canada and at home. President Trump is threatening to escalate tariffs on vehicles imported from Canada to 50%, adding chaos to an industry challenged by trade wars, and Detroit needs Canada more than the rest of the US does. The US-Canada cosmetic tariffs threaten the $10 beauty impulse buy. Canada also retaliates with new duties ranging from 15% to 50% on about $20 billion of goods. Congress needs to stop Trump’s tariff madness, as he is breaking the law.
Politics & Policy
The Trump administration wants billion-dollar businesses to qualify as “small,” with higher revenue and employee limits for small businesses that get federal contracts and loans potentially disadvantaging the smallest companies. President Trump made a show of force in lifting Darline Graham to the Republican nomination for Senate in South Carolina even as his standing slips. Mike Mazzei, backed by Trump, won the Oklahoma primary for governor, a former state senator who lent more than $11 million of his own money to his campaign. A long-shot candidate with the same name as the incumbent Republican senator will be on the ballot in November in Alaska, which could be a problem for the GOP as second Dan Sullivan advances. Everton Blair Jr. won the race to fill David Scott’s House seat in Georgia. The former Democratic-turned-independent senator Joe Manchin is pushing for more independents to join Congress, backing independent bids for the House and Senate. Democrats scored a victory in a campaign finance court case, with an appeals court ruling against Republican hopes for lower ad rates.
The Supreme Court allowed the Trump administration to continue with plans to curtail mail-in voting, but the fast-moving legal fight continues. Hegseth’s purge of top generals leaves the Army rudderless, with the leadership vacuum coming as the service tries to adapt to a new kind of war dominated by deadly drones. The Log Cabin Republicans(https://headlinesbriefing.com/market/nyt-top