Market Overview

Asian shares were mostly lower on Monday, with oil prices slipping at the outset of a week capped by the Jackson Hole symposium of top U.S. economic officials. US futures edged lower, with S&P 500 futures down 0.2%, Dow futures down 0.1%, and Nasdaq futures down 0.7%.

In Asia, Japan's Nikkei 225 fell 0.5% to 65,678.45, while South Korea's Kospi lost 3.5% to 6,664.36. Hong Kong's Hang Seng declined 2.1% to 25,465.23, and the Shanghai Composite gave up 0.7% to 3,877.30. Australia's S&P/ASX 200 gained 0.5% to 9,107.40, bucking the regional trend, while Taiwan's Taiex fell 0.5%. Other reports had slightly different figures, with the Nikkei down 0.7%, the Kospi down 3.1%, and the Hang Seng down 1.9%.

Wall Street Drifts Ahead of Big Week

US stocks drifted to a mixed finish on Monday. The S&P 500 slipped 0.3% to 7,652.86, pulling further from its record set earlier this month. The Dow Jones Industrial Average rose 140.15 points, or 0.3%, to 53,417.16, while the Nasdaq composite fell 0.8% to 25,980.19.

Tech stocks led the decline, with chip names hit hard. Nvidia sank 2.9%, Micron Technology fell 5.8%, and Broadcom slid 2.6%—figures that varied from earlier intraday reports showing Nvidia down 2.3%, Micron down about 6%, and Broadcom down 2%. Nvidia is scheduled to deliver its latest quarterly earnings report on Wednesday, which could dictate the next big move for AI-related stocks.

Financials, however, gained, with JPMorgan Chase up 1.4% and Visa up 3%, helping keep the Dow afloat.

Bond Pressure and Treasury Intervention

The bond market remained a key focus. The 10-year Treasury yield eased to 4.70% on Monday from 4.74% late Friday, according to some reports, while others put it at 4.72% or 4.71% after rising to 4.73% on Friday—its highest point in more than a year. The 30-year yield is near its highest level since 2007 and remained above 5%.

Last week, rising bond yields forced the U.S. Treasury Department into an unusual intervention. Treasury Secretary Scott Bessent announced the government would double its buybacks of longer-term bonds, a move meant to bring down the 10-year yield and lower mortgages. Analysts warned the move may have only a limited effect because of the small size of the buybacks and because they do not fix the fundamental problems of too-high government debt and expensive oil prices due to the war with Iran. CNBC reported that Bessent could tap the department's near $1 trillion Treasury General Account to help fund the buybacks. Bessent said in an interview with CNBC that the program could exceed a $4 billion minimum and described the strategy as a "Treasury Twist."

Inflation and Economic Calendar

Investors were looking ahead to Wednesday's release of the July personal consumption expenditures (PCE) report, the Federal Reserve's preferred inflation gauge, which has shown consumer inflation stubbornly above 3%. The Commerce Department will also issue its second estimate of Q2 2026 GDP; the first estimate showed the economy expanded at a sluggish 1.5% pace as rising imports weighed on growth.

The Fed has been struggling to get inflation back to its 2% target. Inflation crept higher after the U.S. imposed a wide range of tariffs globally and climbed further as the Iran war slowed oil shipments through the Strait of Hormuz.

Fed Chair Kevin Warsh is set to speak Friday at the Jackson Hole economic symposium. Bank of America economists said that after Treasury Secretary Scott Bessent's move, Warsh "holds the ball," and failure to deliver on inflation and rates could push bond yields higher. Warsh has said he wants to give financial markets fewer clues about what the Fed will do with interest rates.

Oil and Iran

Oil prices slipped on Monday. Brent crude fell 2.3% to about $90.54–$90.55 per barrel, while U.S. benchmark crude fell 2.2% to $85.18. Earlier in the day, Brent was around 1.1–1.4% lower at $93.32–$93.10, and U.S. crude was down 1.6–1.8% at $85.63–$85.52. Last month, Brent zigzagged between $72 and $102 on shifting hopes for a U.S.-Iran deal allowing oil tankers to exit the Persian Gulf.

Iran's currency hit a record low as the U.S. prepared to announce new sanctions to break the impasse with Iran. The rial dropped to 2.02 million per U.S. dollar on informal markets, versus an official Central Bank rate of about 1.5 million. Iran's economy is already battered by earlier sanctions and a U.S. naval blockade. The new head of Iran's top security body warned that any country's support for new U.S. economic measures would be seen as an "act of war," while Iran's president defended a memorandum of understanding with the United States.

The Trump administration announced a possible expansion of sanctions on countries doing business with Iran, billed as an "economic D-Day," but stopped short of imposing immediate penalties.

Perspectives

  • U.S. officials and analysts: Treasury Secretary Scott Bessent characterized the bond buyback increase as a temporary measure to calm markets, while analysts warned it may have limited effect without addressing fundamental debt and inflation issues. Bank of America economists emphasized the importance of Fed Chair Kevin Warsh's upcoming speech in providing clarity on interest rates.
  • Iranian officials: The head of Iran's top security body called support for new U.S. economic measures an "act of war," while Iran's president defended a memorandum of understanding with the United States, reflecting internal disagreement over how to respond to U.S. pressure.
  • Texas Governor Greg Abbott: Said AI data-center companies "dug their own grave" and ordered a pause on approvals of new data-center projects through the state's grid interconnection process, citing reliability concerns.
  • Wells Fargo's Ohsung Kwon: Expressed concern that "hawkish rhetoric" from politicians on AI and data centers is a big risk heading into the midterms.