by Eric Criscuolo - Market Strategist

Published on 8/19/26 (a/o 2:00 pm)

While not a massive ramp-up for the program, yields responded immediately. 10y/30y fell 8/10bp and the curve flattened as the 2yr backed up a couple of basis points. The USD weakened and futures ramped into the open. The S&P was up 0.3% at the start of trading and reached a high of 0.7% looking to fill yesterday's gap down, but has pulled back toward opening levels. The equal-weight is easily outperforming as mega and large cap growth lags. Small caps also are outperforming.

Major earnings results have been mostly positive. Estee Lauder is up over 15% and luxury home builder Toll Brothers is up over 5%, reaffirming guidance as well as the “resilience of our affluent customer base”. Target and Lowe’s are also higher. Off-price retailer TJX is down about 3% despite a beat and raise, with optimistic commentary about consumers focused on value. Testing equipment provider Keysight and shipper ZIM are trading lower.

The big corporate news came not from earnings but the clinic, as Moderna and Merck announced positive topline results from their Phase III trial of Intismeran, a neoantigen therapy, in melanoma.  Moderna exploded higher, at one point up 160% before pulling back to only 140%. Merck is up over 10%. The news has triggered a broad rally in Healthcare, placing it at the top of the sector performance list today, and biotech in particular.

Behind Healthcare is Materials (miners stronger but steel weaker) and Consumer Discretionary. The rates pullback is helping the sector with homebuilders (also TOL earnings), retail and restaurants higher. The flatter curve has pressured banks and pockets of insurance today but financial data/services and exchanges, including crypto-related, are trading well.

Tech is lagging and mixed. The semis/memory weakness yesterday has continued (though more modestly). Datacenters of all types are mostly lower (NBIS -10%, follows -8% yesterday). Software however is higher with the IGV ~1%. The megacaps are also higher (GOOG flat). Marvell is up 8% after a partnership agreement with Alphabet for TPU production (and warrant issuance). Alphabet’s long-term partner Broadcom is down ~5%. Industrials is lower with Defense names mostly in the red, along with airlines and AI-levered electrical/energy stocks (GEV, ETN, PWR, etc).  

The 2yr is up 2bp while the 10/30y are down 5-8bp. Today's 20yr auction tailed by 0.5bp this afternoon but wasn’t enough to dent the long-end rally. It’s also the odd-duck of the bond market versus the 10-and 30-years. The FOMC minutes look to be skewed less hawkish than expected, however, with "most participants anticipating that inflation would step down", despite the three dissenters that wanted to hike. Yields pulled back a little on the release. The Treasury news has weakened the dollar on the major crosses. The yen is up a little under 1% against the greenback, providing a shadow intervention.

Markets in Asia sold off overnight while most European indices ended flat to slightly lower (FTSE was marginally higher). European financials and tech were broadly lower while Healthcare, miners and retail names were generally higher. UK CPI accelerated from last month with core coming in a bit hotter than expected. South Korea closed down >5% as the US tech weakness yesterday led to broad-based downside and triggered a side-car trading halt (technically not a circuit-breaker). Memory stocks got hit hard but after the Korean close SK Hynix announced a $29B buyback. The local stock was down 10% but the ADR’s are up 2% today though off their highs. 

The Nikkei was also down >3%. Tech stocks got hit hard with Kioxia and Softbank both down >10% but it was a sea of red across the market. Markets in mainland China were weaker overnight with the Shanghai Comp closing down 2.5%. The Hang Seng ended a touch higher with financials and energy closing higher. Robotics company Unitree IPO’d raising ~$900ml before trading up >400% on its first day of trading. During yesterday’s US session stocks levered to the robotics theme sold off sharply. 

Crude prices bottomed right after the Treasury news (<$90.50) but have rallied since and are up 2% ($92.50). This despite EIA inventories rising 4.4M barrels versus consensus calling for a slight decline. It also follows the big 17M barrel build last week. The UAE broke off trade ties with Iran, President Trump said there are no negotiations and a drone strike hit a Russian refinery. US natural gas prices are extending yesterday’s rally while prices in Europe pullback modestly. Post the Treasury headlines the precious metals complex rallied sharply, reversing overnight losses and yesterday’s selloff. Gold is at session highs, up 3% and crossing above both $4500 and the 200d ma. Copper is flat. The crypto complex is seeing sharp gains with Bitcoin and ETH up 6-9%. Just in time for today’s White House meeting with crypto and prediction market executives. Ag also joined the commodities rally with wheat, corn and soy up ~2%. 

After-Market: BILL, BULL, COTY, IOND, NDSN, WOLF

Pre-Market (Thrs): AAP, BABA, DE, NTES, SCSC, WMT

After-Market (Thrs): FLO, OSIS, ROST, WOOF

US:

Global: