Public Markets 8 Hours

Last updated: August 26, 2026, 8:52 AM ET

Markets Overview

Global markets were in a holding pattern Wednesday as investors braced for Nvidia's earnings report and key U.S. inflation data. The dollar edged higher against a basket of currencies ahead of the July PCE release at 1230 GMT. European indexes largely gained at the open, buoyed by lower oil prices, though technology shares lagged. Brent crude retreated to $85 a barrel as diplomatic optimism around the Middle East tempered supply concerns, while Nasdaq futures slipped as investors positioned for the chipmaker's narrative-setting results. The FTSE 100 eyed a seven-day winning streak as the oil drop buoyed European bonds.

Nvidia and the AI Trade

Wall Street's attention is squarely on Nvidia's earnings, due Wednesday afternoon, with investors scrutinizing the chipmaker's deal machine and its massive portfolio of artificial intelligence investments. The results are expected to serve as a barometer for the entire AI trade, signaling whether the sector's valuation can be sustained. A key unresolved question is the estimated $1.5 trillion revenue gap between AI infrastructure spending and actual revenue generation—a number earnings alone cannot answer. Nvidia's roughly $200 billion in vendor-financing arrangements has drawn particular attention, with some analysts dubbing the strategy a form of balance sheet-as-a-service that carries significant counterparty risk. Oil prices extended their falls and Nasdaq futures dropped further as the earnings approached.

Meanwhile, Microsoft is facing criticism for leaving investors flying blind on its AI businesses, from capital expenditure to the performance of its flagship cloud platform. The lack of transparency stands in contrast to the scale of investment being deployed. In a separate development, Bill Gates published a 6,000-word essay calling for "human reserved" jobs to protect the labor force, warning the technology will usher in "one of the most turbulent times in human history."

Fixed Income and Central Banks

Treasuries edged lower as investors awaited the Fed's preferred inflation gauge for clues on whether policymakers may need to raise rates. The bond market is increasingly focused on Treasury Secretary Scott Bessent's maneuvers, with early signs suggesting the so-called "Bessent Put" may be working. Morgan Stanley Investment Management's Vishal Khanduja, a top-performing fixed-income investor, is scaling back bets against long-term U.S. bonds, saying Bessent is prepared to act decisively.

However, the Treasury secretary faces a credibility test in his quest to tame markets, confronting the limits of his ability to reshape the economy ahead of midterm elections. The FT reports the U.S. Treasury is on a collision course with the Fed over bond market interventions. Meanwhile, Fed Chair Kevin Warsh is scheduled to deliver his first address at the Jackson Hole conference with government bond markets on edge and inflation risks resurfacing—the honeymoon period is over for the new central bank chief.

In Europe, natural gas has overtaken oil as the biggest inflation concern for bond traders, with depleted supplies threatening a resurgence in price pressures. UK household energy bills are set to hit a three-year high from October, with Middle East conflict pushing prices up 4 percent.

Oil and Energy Markets

Oil prices fell for a third straight day after Iran and Oman discussed establishing a temporary shipping route to reopen the Strait of Hormuz. Crude held below $90 a barrel as a flurry of positive headlines around U.S.-Iran peace talks soothed traders, with prices falling on signs of potential Hormuz reopening. Global fuel markets have little margin for error, with the world relying heavily on U.S. refineries just as those plants are pushed to their limits.

Soaring diesel prices are helping oil companies and hurting consumers, with the fuel used in farm machinery and trucks surging because of the war in Iran and Ukrainian attacks on Russian refineries. Saudi Arabia is rerouting oil exports yet again, forced away from the Strait of Hormuz and now relying on a more complicated detour via the Suez Canal. China's Cnooc reported first-half profit rose after the Iran war boosted global energy prices. Indian refiners are widening their oil search as Ukrainian attacks hurt flows from Russia, their top supplier.

Deals and Corporate News

Vanguard agreed to acquire wealth management platform Altruist in a $4 billion deal, marking a major push into financial advice by the world's second-biggest investment firm. Victory Capital Holdings agreed to buy First Eagle Investments for about $7 billion, creating one of the largest publicly traded traditional asset managers in the U.S.

SoftBank Group is in talks 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 in the fast-fashion retailer's Hong Kong IPO. Siemens Energy plans to spin off its Transformation of Industry unit, potentially bringing in external investors while maintaining a minority stake.

Macquarie has dropped KPMG as its auditor following an Australian data scandal, with PwC retaining the country's most lucrative audit contract. In a related development, a Hong Kong court ruled that liquidators can pursue PwC globally over Chinese property giant Evergrande's collapse, a decision that threatens the Big Four firms' partnership network model. The court declined to remove PwC International from the multibillion-dollar lawsuit.

Retail and Consumer

Kohl's reported lower profit and sales in the second quarter but raised its outlook thanks to a boost from tariff refunds. J.M. Smucker swung to a profit as sales climbed, with the owner of Jif peanut butter and Folgers coffee now expecting net sales to decline just 1% to 2% in fiscal 2027, improved from a prior forecast of 3% to 4%. Bath & Body Works raised its earnings outlook, now expecting annual adjusted earnings per share of $2.60 to $2.80, up from prior guidance of $2.40 to $2.65.

Trade and Tariffs

Canada has retaliated with new duties ranging from 15% to 50% on about $20 billion of goods, escalating tensions with the U.S. The president is threatening to escalate tariffs on vehicles imported from Canada to 50%, adding chaos to an industry already challenged by trade wars—and Detroit needs Canada more than the rest of the U.S. does. Many Canadians are standing their ground despite the threat to jobs, embracing a show of resistance after trade talks collapsed. Canada's opposition to the president's tariff playbook has become a defining issue, with the country's leaders defying Trump's approach. Persian Gulf shipping insurance costs have surged higher amid the escalating trade and security tensions.

Asia and Emerging Markets

China's Li Auto reported a second consecutive quarterly loss despite launching new models to spur demand. 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 ambitions, even as founder Jack Ma buys shares. Citigroup anticipates record debt and equity issuance from South Korean firms in 2026, led by SK Hynix's landmark $26.5 billion deal. India's government is selling about a 6% stake in Hindustan Copper, capitalizing on record global copper prices. Indian refiners will divert 350,000 tons of sugar originally headed offshore into the local market to ease a supply crunch. Options turnover on India's biggest stock exchange fell to a one-year low on monthly expiry day, reflecting stricter trading rules. Purple Style Labs, operator of Pernia's Pop-Up Shop, will sell shares in an IPO next week, tapping demand for elaborate wedding wear.

Commodities and Mining

Hochschild Mining shares jumped after earnings soared on higher gold and silver prices, with average gold prices rising 47% and silver prices 130% higher over the first half. Mota-Engil 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 U.S. financing.

Politics and Policy

In South Carolina, President Trump slingshotted Darline Graham to victory in the Republican Senate primary, a show of force despite low approval ratings and endorsement setbacks. In Alaska, a long-shot candidate with the same name as incumbent Republican Senator Dan Sullivan advanced to the November ballot, potentially complicating GOP efforts to hold the seat. Joe Manchin is pushing for more independents to join Congress, backing independent bids for the House and Senate to weaken the two-party grip. Hegseth's Army purge and polling chaos in the midterms are also dominating political headlines.

Infrastructure and Transport

Dubai International Airport, one of the world's busiest international aviation hubs, saw passenger traffic fall 30% in the second quarter from the first as the Iran war disrupted Gulf aviation. California's high-speed rail project remains years late and billions over budget with not a single track laid, though a new push aims to jump-start the project.

Healthcare and Public Health

A new study finding a high percentage of NFL players developed degenerative brain disease has sparked tense family debates over whether children should play football. Despite rising CTE cases, the NFL's popularity continues to grow, presenting a collision of American popular culture and public health. The FT argues that Britain needs a new way to pay for healthcare, suggesting co-payments would make the system more like its rich-world peers. Americans are encountering significant risks at psychedelic clinics abroad, with participants in vulnerable states having little recourse if mistreated or injured.

Other Notable Stories

The AI prodigy who won over Silicon Valley lost $45 billion, a cautionary tale of rapid wealth creation and destruction. Klaus-Michael Kuehne's death signals the end of a swashbuckling dealmaking era, with his $49 billion fortune transferring to a low-key Swiss foundation. Ukraine's Delta software system is orchestrating its drone army, pulling together battlefield data to create a miles-wide "kill zone" credited with cutting Russian advances to a near standstill. Pakistan's prime minister ordered an investigation after a hospital fire killed 14 infants in Islamabad. The CEO who built a company on a "technical impossibility" offers lessons in persistence. French stocks are about to confront a ramp-up in political risks, while Saudi Arabia is making it cheaper to trade derivatives as part of capital market reforms. Prediction markets are gaining traction on trading floors, and Hyundai is betting on a U.S. hybrid boom to take on Toyota, releasing dozens of new models by 2030. Intuit's CFO discussed the tough choice to lower guidance amid the AI shift. New York Mayor Mamdani is facing off against Amazon over the delivery act, while Bessent's Iran sanctions are unlikely to be a game changer. The quantum threat status and GTA VI malware scams round out the cybersecurity landscape. Harry Styles's Madison Square Garden takeover is part of a residency trend that some say transfers touring costs to fans. A pioneering architect's archive, long thought lost, is now featured at three museums. Child actors share what they understand about Hayden Panettiere, and educators consider whether moral identity is the only way to stop cheating.