Tech stocks rose premarket following Nvidia’s strong earnings beat and continued AI-chip growth. Oil prices dipped amid hopes of diplomatic progress in the Strait of Hormuz. For years, markets ignored deficits, but the era of complacency has ended.

Treasury Secretary Scott Bessent’s recent bond market intervention highlighted the constraints of limited firepower against a massive federal deficit. This has drawn criticism from figures like Stanley Druckenmiller. Kevin Warsh, a Druckenmiller protégé and Bessent ally, prepares to step into the fray.

Federal Reserve Chairman Jay Powell’s upcoming Jackson Hole summit address may influence Treasury yields, potentially driving them higher or lower. Historically, deficits surged above 4% of GDP following the 2008 crisis, testing market resilience. The current standoff reflects a pivotal shift in how bond investors perceive sovereign risk.