Last updated: August 31, 2026, 10:44 PM ET
Equities
US stocks slumped on Monday, with the S&P 500 slipping as escalating Middle East tensions and rising oil prices weighed on sentiment while traders boosted bets on interest-rate hikes this year. The decline to end August came as war fears persisted, with oil prices rising on new fighting reported in the Strait of Hormuz. The Dow Jones Industrial Average and Nasdaq also fell as the renewed hostilities between the US and Iran near the strategic waterway fanned inflation concerns. Futures were little changed in early Tuesday trading as investors weighed Federal Reserve Chair Kevin Warsh's hawkish remarks that inflation remained too high.
JPMorgan Chase & Co.'s trading desk has shifted to a "tactically cautious" view on US stocks for the next few weeks following Warsh's speech, which led markets to boost expectations for tighter policy. The Nasdaq 100 remains 4% below its June record even as the S&P 500 has recovered, with the ten-month rift keeping the tech-heavy index short of a new high. Technicians remain cautious ahead of September, historically the worst month for the benchmark, even as the earnings outlook brightens following a blockbuster reporting season. Meanwhile, an equal-weight strategy has been quietly beating Big Tech this year, as investors rotate into laggards.
Fixed Income & FX
The US 10-year Treasury yield topped 4.75% on Monday for the first time since January 2025, as rising oil prices bolstered expectations that the Fed will hike rates. However, yields later declined while the 10-year German Bund yield hit a 15-year high amid fresh military escalation between the US and Iran. The two-year yield pared recent gains as the market closed Monday. The dollar is set to weaken for a second straight month as US plans to accelerate buybacks of government debt weigh on the greenback, though gains could be limited as a September rate hike is not a done deal, according to Commerzbank.
Japan's bonds and currency are under pressure after Warsh's Jackson Hole speech, with the yen weakening past ¥160 per dollar and yields rising to the highest in three decades as investors raise bets on monetary tightening. The yen's breach of 160 underscores the currency's vulnerability to further weakness and the heightened risk of authorities entering the market to slow its decline. Japan's auction of 10-year government bonds on Tuesday will test demand for this key maturity as yields approach the milestone of 3%, with investors positioning for a central bank rate hike. Analysts say the Government Pension Investment Fund may be justified in eventually raising its domestic debt allocation target from 25% to seek higher returns. Gold declined in Asian trade, with the pullback below the $4,600 level likely a natural correction on profit-taking after a strong rally.
Energy & Commodities
Oil surged above $86 after the biggest gain in three weeks as fresh hostilities between the US and Iran raised concerns about prolonged disruptions to energy flows through the Strait of Hormuz. Prices later climbed to $90 a barrel following the first attacks in a month, with the average US gasoline price remaining 37% higher since the war began. The renewed attacks were the latest sign that the six-month-old conflict appears far from over, with President Trump vowing to hit Iran "hard" after the exchange of fire ended weeks of relative quiet. The US military said its strikes were in response to a threat to the Strait of Hormuz, potentially targeting a new type of Iranian rocket-deployed naval mine.
Asian stocks are set to fall as the oil spike fuels inflation fears, while LNG exports through Hormuz remain stalled even as crude flows rebound, keeping prices of the super-chilled fuel near war-time highs. Goldman Sachs has stepped up warnings of tightness in global refining driven by the wars, more than doubling its forecasts for profits. Crop prices are set to cap their biggest monthly gain in more than a decade as wars and extreme weather disrupt supplies, raising concerns about food inflation. China's coking coal prices were heading for a record monthly gain of 46% on supply crunch, while the country's LNG imports are set to drop 18% this month as high prices hit demand. US natural gas futures started the week lower, though warmer-than-normal weather extending into September maintains some price support.
Australia raised its wheat crop forecast to 29.9 million tons after strong winter rains improved growing conditions, just as the worsening Black Sea crisis creates additional demand for the country's grain. The Trump administration granted oil refineries the biggest amount of biofuel waiver exemptions since 2017. The USDA is easing regulations for ranchers and small meat processors in the latest effort to appease domestic producers.
Deals & Corporate News
Ares Management Corp has raised ¥612 billion ($3.8 billion) for its latest Japan-focused logistics development fund, the largest closed-end institutional fundraise by its real estate business. KKR is set to net a giant windfall of $3.3 billion from the $17 billion sale of USI to Aon, one of the largest gains earned by a public private equity firm on a single deal. The deal highlights how KKR is the rare private equity firm that bets on itself, as buyout groups reach middle age and playing with other people's money only gets them so far.
SLB agreed to acquire Kelvion for $4.1 billion, with the oil drilling and production company strengthening its growing data center business through the thermal management acquisition. ONEOK is set to buy Brazos Midstream's Permian Midland Basin natural gas gathering and processing assets for $4.43 billion, expanding its footprint in the prolific American oil hub. Itochu Corp has decided to take Dentsu Soken private in a $1.3 billion tender offer deal that would end its parent-subsidiary listing structure with Dentsu Group Inc. Brookfield is lining up a $600 million payout through an asset-backed transaction at Home Serve that would pay the owner a dividend.
UPS rejiggered its operating model, shaking up executive roles and naming the head of its US business to lead global operations. Nissan and Honda have agreed to jointly develop key systems and software for next-generation vehicles after a planned merger fell through last year. The software deal comes as Japanese carmakers face rising pressure from Chinese EV rivals and the might of Toyota. Huawei's profit slumped by a third on R&D expenses and raw-material costs despite higher revenue, with first-half net profit dropping 37%.
IPOs & Fundraising
Shein's initial public offering in Hong Kong this week allowed it to avoid paying out billions to early investors, with the company having 4.4 billion reasons to speed the IPO along. Don't count Shein out just yet, though fierce competition and tariffs have left its growth story in tatters. Anthropic PBC's IPO is casting a long shadow over companies' US listing plans as they try to find room for their deals to grab attention after the Labor Day holiday. Westinghouse Electric wants to ride a nuclear power revival to an IPO, with a powerful ally in the US government.
Shanghai Enflame Technology Co., backed by Tencent Holdings, is seeking to raise about 6.12 billion yuan ($911 million) in an IPO, as the last of the so-called "four little dragons" in China's chip sector comes to market. Shenzhen Longsys Electronics is seeking to raise as much as HK$6.28 billion ($801 million) in a Hong Kong listing, extending the wave of Chinese companies along the AI supply chain. Indian listed companies are ramping up equity offerings to institutional investors as ample liquidity and improving sentiment open a window for fundraising. The UK is offering homegrown AI start-ups £100 million to improve public services, in a scheme that comes amid growing opposition to government contracts with US software group Palantir.
Regulation & Legal
US regulators delayed for the fourth time additional hedge fund disclosure requirements meant to inform agencies about firms' financial positions during market turbulence. The SEC is also planning to scrap rules governing how and when public company shareholders can bring proxy proposals. The Federal Trade Commission is suing Amazon for manipulating advertising prices, claiming the ecommerce giant overcharged about 1.2 million businesses to promote their products. The commission, along with more than 20 states, will allege the company reaped billions by manipulating ad prices on its retail platform.
A federal judge ruled that creditors of SVB Financial aren't entitled to the $1.71 billion deposit claim against the FDIC, wiping out a bet by distressed-debt investors. The DOJ issued a grand jury subpoena to Daniel C. Richman, a confidant of James Comey, in the latest move in a persistent campaign against one of President Trump's most reviled adversaries. The IRS lost roughly a quarter of its employees since Trump took office, with audit revenue plummeting 35%, according to a watchdog. Chat GPT, Reddit and Roblox face tougher rules under the EU's online safety regime, designated as very large online platforms under the Digital Services Act.
Emerging Markets
Colombia's new government painted a picture of public finances that landed with a thud on Wall Street, with the 9.4% deficit sparking one of the worst selloffs of the year and the peso slumping 2.1%. The incoming administration plans to raise about $11 billion and carry out debt swaps to manage its 2026 financing needs. Adani Group companies erased 1.4 trillion rupees ($15 billion) in market value, the most in about 21 months, as India's closing auction drove sharp swings during a scheduled MSCI index reshuffle. The closing auction faces a $5 billion test with concerns about whether the system can absorb that kind of volume without sharp price swings. Emerging-market equities and currencies declined as investors weighed the prospect of higher US interest rates following Warsh's hawkish comments.
Chilean investors are dipping a toe into lower-rated corporate bonds on bets that the new administration's economic reform will revive growth. The reforma económica is elevating appetite for higher-risk bonds in Chile. Zambia's majority state-owned mining investor is considering selling a stake in the business that owns minority interests in most of the nation's biggest copper mines. Chinese dividend stocks are in their best shape since 2015, as heightened volatility in technology shares pushed investors toward more defensive bets. Brazil banks are poaching hedge-fund stars as the country's double-digit interest rates and industry slowdown hit independent funds, with Arminio Fraga turning his funds over to the country's fourth-biggest bank.
Credit & Private Markets
Australian private credit funds are trying to contain panic among investors after the collapse of property developer Bathla Group sparked fears that the industry's big bet on the property sector is going wrong. Bonds of PG&E Corp. and Edison International broadly weakened on Monday after California lawmakers rebuffed a key provision of Governor Gavin Newsom's plan to shift wildfire liabilities. Shares of the utilities plunged following unfavorable California wildfire legislation that prompted a wave of analyst downgrades. Private equity groups face a $40 billion maturity wall in 2028 to refinance Covid-era software buyouts, with software companies paying steep prices to buy time against the AI threat. London's Aim market faces an existential crisis, with the junior market's appeal rocked by depressed valuations, poor investor appetite and inheritance tax changes. UK investment trusts are struggling to keep up the liquidity illusion, with Boaz Weinstein's activist campaigns exposing the strains in a centuries-old model.
Hedge Funds & Activism
Elliott has built a stake in French industrial gas group Air Liquide, with the activist US hedge fund having targeted several European corporate giants in recent years. Citadel accused Marshall Wace of failing to adhere to a court order to hand over documents relating to the British hedge fund group's recruitment of former Citadel portfolio manager Daniel Shatz. Engine Capital is pushing EPAM Systems for buybacks as AI hits its shares, with the campaign coming as investors bet artificial intelligence will hurt consultancies and software groups. John and Laura Overdeck's divorce could sway a power struggle atop Two Sigma, putting Wall Street's staggering wealth on public view. Jane Street's AI bets have gone sour, with the trading firm suffering a $1.5 billion loss.
Crypto & Digital Assets
Strategy Inc. resumed Bitcoin purchases after a 10-week pause, spending $370 million and returning to its signature accumulation strategy after the crypto bear market pressured its shares. Donald Trump Jr.'s fund boosted its Polymarket investment by around $300 million, with an upcoming round led by 1789 Capital valuing the prediction market at roughly $21 billion. Crypto groups spent a record $640 million buying back their own tokens, employing a similar strategy to equity market repurchases in response to the prolonged slump in digital assets. A Google engineer is challenging insider trading charges over Polymarket bets, arguing "it's not insider trading, it's offshore gambling!"
Politics & Policy
The Supreme Court allowed White House ballroom construction to continue, with the court also clearing Trump's ballroom construction to proceed. The CDC director challenged Pennsylvania's report of two measles deaths, a highly unusual move that reflects tensions between the Trump administration and many states over health issues. JD Vance called Michigan Senate candidate Abdul El-Sayed "evil" at a rally, also telling the Democratic nominee to "keep my wife's name out of your mouth." Scott Brown is chasing the political limelight again with a seemingly improvised Senate campaign in New Hampshire. In Massachusetts, the octogenarian senator Ed Markey faces a challenge from a much younger centrist, Representative Seth Moulton.
At least $1 billion from anonymous donors is flowing into the midterm elections, with dark money now permeating nearly every major contest in what's being called "the least transparent midterm." More mail ballots are arriving late this year and getting tossed, with state officials urging voters to mail ballots early or use drop boxes. President Trump urged voters to "let Data Reign" as the unpopular data center building boom roils midterm campaigns, saying critics "want to end up backwards and poor." The Trump administration has revoked funding for bike paths, with a cycling advocate saying it is playing on the idea of "that dork on a bike." Harmeet Dhillon, who leads the Justice Department's civil rights unit, has extracted flashy agreements from big universities and sought to force states to turn over confidential voter information.
Geopolitics & Defense
The US and Iran exchanged strikes overnight after a monthlong calm, with the renewed attacks the latest sign that the war that began six months ago appears far from over. The first attacks in a month jolted energy markets. The G20 finance meeting is expected to focus on the ongoing economic shock from the war in Iran, which has driven up oil prices globally. Wartime presidents of Russia and Iran rallied with Chinese and Indian leaders at a two-day summit of the 10-nation Shanghai Cooperation Organization in Kyrgyzstan, showing the limits of US economic warfare. Don't write off Russia's defence industry yet, as Moscow's arms manufacturers are adapting and innovating in ways that could threaten Nato in the future. Nonstop Russian drones have made for a dangerous new phase of war in Kyiv, with nearly constant air raids leaving residents exhausted and on edge.
Natural Disasters & Climate
Nepal is seeking $5 billion in urgent help from a special UN climate fund after catastrophic flooding, but the program lacks money because the US and others have been reluctant to contribute. The country has turned to mass burials as over 2,500 people remain missing, with only a fraction turning up among the dead. A massive landslide and glacial collapse may have caused catastrophic flooding even without heavy rainfall, with more than 4,700 people still missing. A principal saved 900 students before his school was washed away in Nepal, acting on a warning with less than 15 minutes to spare. For Nepal's young leader, Prime Minister Balendra Shah, flood recovery will be a Herculean task for his fledgling government. China prepared for one kind of Himalayan flood, but a different disaster struck when a "cascade of hazards" overwhelmed defenses at a border crossing with Nepal.
The bodies of at least two people were found and more than a dozen missing after flash flooding at the Grand Canyon, with at least 62 people evacuated after flooding destroyed footbridges and damaged a campground near Bright Angel Creek. The death toll rose to two as search efforts continued with more than a dozen people unaccounted for. Phantom Ranch, the only lodge within the Grand Canyon, has drawn adventurers and dignitaries including Theodore Roosevelt for more than a century. The strongest El Niño in a generation is wreaking havoc on the global economy, disrupting industries worldwide. Rising sea temperatures mean coral reefs don't have enough time to bounce back between intense heat waves, a new report warns. Climate volatility is shaking up companies' earnings too, with supply chains vulnerable to heatwaves and cyclones.
Other News
A woman stabbed two people in Times Square, killing one, before being shot dead by NYPD officers who had tried to use less lethal force. Mansour Abbas has recruited a Jewish lawmaker best known for reducing the crime rate in Arab cities to join his Raam Party in the Israeli election. Lionel Messi's retirement from the Argentine national soccer team sparked heartbreak across the country, with fears of a diminished squad and the departure of a national icon. John Galliano bowed out of a Met Museum show after donors, politicians and Jewish leaders questioned the decision to honor the fashion designer found guilty of a hate crime. Olivia Rodrigo's Daisy Chain Fields festival presented a cross-generational vision of female empowerment at the first edition in Irvine.