STRAIGHT FROM THE TRADING FLOOR
by Eric Criscuolo - Market Strategist
Published on 8/31/26 (a/o 2:00 pm)
DOW 53,250 (-310), S&P 500 7,683 (-28), Russell 2000 2,946 (-26), NYSE FANG+ 18,739 (-82), ICE Brent Crude $90.25/barrel (+$2.15), Gold $4,487/oz (-$43), Bitcoin ~78.8k (+1436)
MAC Desk Commentary:
US equites stumbled into the weekend on Friday. The S&P fell 0.3% as did the equal-weight, but the Russell 2000 got hit for 1.4%. Yields played a role as the 2y jumped over 10bp and the long-end rose as well after markets digested Fed chair Warsh’s hawkish Jackson Hole speech. That speech assumed the role of Steve Martin in the Three Amigos market events last week, along with PCE and NVDA earnings. How did we assign those roles? Steve Martin’s Lucky Day gave the inspired speech to the townspeople to rise up against the evil El Guapo. That’s Warsh and his speech. Chevy Chase’s Dusty Bottoms was the easy-going but sometimes bumbling Amigo, much like the PCE print. Martin Short’s Ned Nederlander was the quick-draw gun-slinger, making AI Cowboy and NVDA CEO Jensen Huang the pick there. Anyway, after Warsh/Lucky’s speech, rate hike expectations repriced and now stand at 64% for the September meeting, versus 40% a week ago.  

That brings us to today, the last day of August. We’ve seen some significant market events and sharp moves during recent month-ends, including July’s Situational Awareness fund blow up. We don’t’ see anything like that on the tape for this month-end, but over the weekend the US and Iran exchanged fire for the first time since July. The US struck rocket launchers on Larak Island, which could be used to fire mines into the Strait, after the US had just declared it mine-free. Iran responded by launching missiles at US bases in Jordan which were intercepted. President Trump also posted AI-generated videos of Kharg Island being “blown to smithereens”.  We still prefer the MAC Desk memes. The return of kinetic activity kicked oil higher and the S&P opened down 0.2%, which has marked its high of the day. We’re currently down 0.4%, with every sector except for Energy (and Tech, barely) lower. The equal-weight is lagging slightly, followed by small caps (R2K -1%). For the month the S&P is currently up ~3%, outpacing both the equal-weight and Russell 2000. The NYSE 100 is up 5% as large caps held up- especially Software.
Sector-wise today, Comm Services is down ~2% with GOOG and META both in the red, though most of Media and Entertainment is down as well. Yield-proxies Utilities and Real Estate are lower as well, though much of the Utes weakness is on California utilities like EIX and PCG (down ~20%) after disappointing California wildfire legislation. Materials is also laggard. Ag/fertilizer names are higher with the Iran escalation but the rest of the sector is lower.   

Tech is among the leaders today, trading around flat. CRWD is up another 4% after jumping on its earnings report last week. The software group is trading higher overall (IGV +0.5%). SK Hynix (+1%) is reportedly looking at outsourcing some production of HBM4E chips to Intel (flat), diversifying from TSMC (unchanged). Elon Musk said SpaceX (+1%) will be building its own gas turbine blades to address the supply squeeze for data center energy. The news is pressuring manufacturers like HWM (-7%).  

Energy, Healthcare, Tech and Materials led gains in August, with each rising ~5%. Energy rode oil’s gains. Tech was driven by software’s phoenix impersonation. Healthcare saw a broad rotation that has erased much of the YTD underperformance versus the S&P. Miners powered Materials higher on metals strength. Utilities were the main laggards with yields rising, and Industrials also declined as the AI infrastructure trade came under pressure. 
Among other corporate news, AON (-8%) confirmed it is buying USI Insurance, the 10th largest insurance broker in the US, from KKR for $17B. SLB (+3%) is acquiring data center cooling equipment provider Kelvion from Apollo and Triton for $3.4B. LLY (-1.5%) is buying Merida Biosciences (private) for up to $2.875B cash.

 Yields were around unchanged even as oil rose, but the long-end began to back up as we approached the open. 10 and 30y yields are up 4-5bp while the 2y is down slightly after Friday’s >10bp jump. The 10y has set new YTD high as it hit 4.75%. The 30y remains below its high but is marching back towards it. It’s not just the US. Global long-term yields are up today across the curve. 2y JGBs are up 5bp while longer tenors tick up only slightly, almost a mirror image of the rest of the world as expectations build for a rate hike. For August US rates are ending at their highs but the long-end mostly consolidated July’s sharp move higher. The Dollar is looking to end August lower but off its lows.  

US 2yr -1bps to 4.35%, 5yr +2bps to 4.50%, 10yr +4bps to 4.76%, 30yr +5bps to 5.25%
USD index: -$0.29 to $99.37
Secretary Bessent sat down with CNBC at the G20 summit this morning. Yields had already moved higher before the comments. Some of the takeaways:

  • He doesn’t believe he can change the equilibrium price in markets; Investors seek to speed things up, Treasury looks to speed things down.
  • The AI buildout is crowding out capital, but will create a productivity boom on the other side.
  • He will not speculate on what the Fed may or may not do, however you traditionally wouldn’t raise rates into a supply shock. While that could signal tension between Treasury and the Fed, he also noted that “Warsh and I are on the same page on bonds”.
  • A Fiscal consolidation package is being worked on to address the public debt. No details though.
  • Reiterated that he has information the public doesn’t. Pressed on that comment meaning he knows the BOJ will raise rates in Sept, he noted that the market has already priced it in.
  • He doesn’t believe you can’t pressure Iran without China. Had a robust meeting with China Governor Pan on Sunday, and the US has more in common with China on Iran they we disagree on.
  • The US Dollar index is down however, giving back some of Friday’s (and the past week’s) gain. The yen is slightly stronger against the Dollar after having weakened to over ¥160 on Friday. Japan spent a record $96B on the recent intervention to prop up the yen.
It’s a very light macro calendar. The Dallas Fed Manufacturing survey improved from last month. New Orders jumped for both Current and Six-Month out periods. Prices Paid accelerated and remain highly elevated (49% reported an increase, 47% reported no change) while Prices Received moderated slightly. Both measures showed increases for future expectations. Tomorrow picks up a bit with ISM manufacturing, along with JOLTS jobs data.
Oil is trading ~3% higher on the renewed Iranian hostilities. Brent is currently up ~7% in August and 50% this year. The WSJ reported details of the US’ oil deal with Venezuela. The US government will take a 35% passive stake in North American Blue Energy Partners, a private energy company. Rights to purchase 20% of its production would come with the investment. Not surprisingly, the article noted a significant degree of confusion across the oil industry and possible constitutional issues in Venezuela. US natural gas is modestly higher but Dutch TTF jumped 4% (~20% in August). EU gas storage is at 63% of capacity, well below the 80% level it’s generally at for this time of year and a 13-year low.

Gold is lower and has fallen below its 200d ma ~$4500, though its up ~10% this month. Silver is lower as well, trying to regain its 100d ma ~$68.70 (+15% in August). It has traded below its 200d since mid-June. Bitcoin and ETH are extending earlier gains with each up ~2%. Bitcoin is +25% this month and ETH +33%.
Europe ended lower with most indices at their worst levels. Germany lagged as it pulled back from a record high on Friday. CPI was lower than expected. The UK was closed. Financials and Energy were broadly higher across the continent while Tech and Healthcare were among the laggards. Tech and Industrial names were also under pressure. For the month, Europe was mixed. Germany was among the better performers, up ~3% while France and the UK fell. SAP was one of the best performing stocks in Europe in August, climbing ~20% as software rebounded sharply.

Japan’s Nikkei ended slightly lower overnight. In an interview this weekend (before today’s G20 comments), Treasury Secretary Bessent said he thought the yen moves were contained, despite yen weakness re-emerging after the FX interventions briefly halted its decline. He also said he expects the BOJ to “do the right thing” and added we have likely seen the end of the reflationary Abenomics era, further adding to the rate hike expectations. Industrial Production and Retail Sales came in ahead of consensus. The Nikkei ends August up 3%. In China, Shanghai rose 0.9% while the Hang Seng was fractionally lower. Official manufacturing PMIs remained in contraction but improved from last month. However non-manufacturing was weaker than expected. The Hang Seng fell 1% in August as the large consumer-facing Tech companies were under pressure (Baidu -8%, Tencent -4%, Alibaba flat) while Shanghai gained 4%.
Earnings:
  • After-Market: PXS
  • Pre-Market (Tues): MDT, MMED, NIO, YEXT
  • After-Market (Tues): CRDO, DELL, GTLB, MDB, PANW, SPWH

Economic Data:
US:
  • Dallas Fed Manufacturing: 11.6 vs prior 1.3
Global:
  • China official Manufacturing PMI (August): 49.8 vs 49.7 cons, prior 49.2
  • China official non-Manufacturing PMI: 49.0 vs 49.5 cons, prior 49.0
  • Japan Industrial Production (July, m.m): 0.1% vs -0.6% cons, prior 1.9%
  • Japan Retail Sales (July) m.m / y.y: 2.4% / 4.0% vs 1.6% / 3.0% cons, prior -3.9% / 0.6%
  • India GDP: 7.8% vs 7.1% cons, prior 7.8%
  • Germany CPI m/m / y.y: 0.2% / 2.9% vs 0.3% / 3.0% cons, prior 0.8% / 2.8%
STRAIGHT FROM THE TRADING FLOOR
by Eric Criscuolo - Market Strategist
Published on 8/31/26 (a/o 9:00 am)
Good morning,
 
US equites stumbled into the weekend on Friday. The S&P fell 0.3% as did the equal-weight, but the Russell 2000 got hit for 1.4%. Yields played a role as the 2y jumped over 10bp and the long-end rose as well after markets digested Fed chair Warsh’s hawkish Jackson Hole speech. That speech assumed the role of Steve Martin in the Three Amigos market events last week (PCE as Chevy Chase and NVDA earnings as Martin Short being the others).  Rate hike expectations repriced and now stand at 64% for the September meeting, versus 40% a week ago.  
 
Today is the last day of August, and we’ve seen some significant market events and sharp moves during recent month-ends- most recently the Situational Awareness fund blowing up at the end of July.  We don’t’ see anything on the tape like that this time around but we still have a full day of trading to go.  Maybe that’s not entirely true as the US and Iran exchanged fire over the weekend, the first time since July. The US struck rocket launchers on Larak Island, which could be used to fire mines into the Strait. Iran then launched missiles at US bases in Jordan which were intercepted. President Trump also posted AI-generated videos of Kharg Island being “blown to smithereens”.  S&P futures are down ~0.4% as oil climbs ~3%.  The S&P is currently up 3% in August with the equal-weight up a little less and small caps lagging.
 

 
Among corporate headlines:
 
  • SK Hynix is reportedly looking at outsourcing some production of HBM4E chips to Intel, diversifying from TSMC.
  • Elon Musk said SpaceX will be building its own gas turbine blades to address the supply squeeze.
  • AON confirmed it is buying USI Insurance, the 10th largest insurance broker in the US, from KKR for $17B
  • SLB is acquiring data center cooling equipment provider Kelvion from Apollo and Triton for $3.4B
  • LLY is buying Merida Biosciences for up to $2.875B cash.

Yields are also backing up on the long-end by 3-4bp. The US Dollar index is down however, giving back some of Friday’s gain.  The yen is slightly stronger against the Dollar after having weakened to over ¥160 on Friday. Japan spent a record $96B on the recent intervention to prop up the yen.
 
  • US 2yr -1bps to 4.34%, 5yr +1bps to 4.50%, 10yr +4bps to 4.75%, 30yr +4bps to 5.25%
  • USD index: -$0.13 to $99.53
Oil is trading higher this morning on the renewed Iranian hostilities. Brent is currently up ~7% in August. US natural gas is modestly higher but Dutch TTF jumped 4% (~20% in August). EU gas storage is at 63% of capacity, well below the 80% level it’s generally at for this time of year and a 13-year low.  The WSJ reported details of the US’ oil deal with Venezuela. The US will take a 35% passive stake in North American Blue Energy Partners, a private energy company and second-largest oil producer in the country after Chevron. Rights to purchase 20% of its production would come with the investment.  Not surprisingly, the article noted a significant degree of confusion across the oil industry and Venezuela. Gold is lower and has fallen below its 200d ma ~$4500, though its up 10% this month. Silver is lower as well, trying to regain its 100d ma ~$68.70 (+17% in August). It has traded below its 200d since mid-June. Bitcoin and ETH are up about 1% and continue to consolidate their recent sharp moves higher- Bitcoin +25% in August and ETH +32%.
 

 
Europe is mostly lower, with Germany lagging as it pulls back from a record high on Friday. CPI was lower than expected. The UK was closed. Financials and Energy are broadly higher across the continent while Tech and Healthcare are among the laggards. For the month, Europe is mixed. Germany among the better performers, up 3% while France and the UK fell modestly. Japan’s Nikkei ended slightly lower overnight. In an interview Treasury Secretary Bessent said he thought the yen moves were pretty well contained, despite yen weakness re-emerging after the FX interventions briefly halted it decline. He also said he expects the BOJ to “do the right thing” and added we have likely seen the end of the reflationary Abenomics era.  Industrial Production and Retail Sales came in ahead of consensus. The Nikkei ends August up 3%. In China, Shanghai rose 0.9% while the Hang Seng was fractionally lower. Official manufacturing PMIs remained in contraction but improved from last month. However non-manufacturing was weaker than expected. The Hang Seng fell 1% in August as the large consumer-facing Tech companies were under pressure (Baidu -8%, Tencent -4%, Alibaba flat) while Shanghai gained 4%.
 

 
 
Earnings
Pre-Market: None
After-Market: PXS
Pre-Market (Tues): MDT, MMED, NIO, YEXT
 
Economic Data:
US:
  • 10:30am Dallas Fed Manufacturing
 
Global:
  • China official Manufacturing PMI (August): 49.8 vs 49.7 cons, prior 49.2
  • China official non-Manufacturing PMI: 49.0 vs 49.5 cons, prior 49.0
  • Japan Industrial Production (July, m.m): 0.1% vs -0.6% cons, prior 1.9%
  • Japan Retail Sales (July) m.m / y.y: 2.4% / 4.0% vs 1.6% / 3.0% cons, prior -3.9% / 0.6%
  • India GDP: 7.8% vs 7.1% cons, prior 7.8%
  • Germany CPI m/m / y.y: 0.2% / 2.9% vs 0.3% / 3.0% cons, prior 0.8% / 2.8%

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