U.S. equities begin the final session of August cautiously as renewed U.S.-Iran fighting pushes oil higher and Fed Chair Kevin Warsh’s Jackson Hole speech drives another increase in rate-hike expectations. At 5:02 a.m. ET, Dow futures were down 0.10%, S&P 500 futures were down 0.13% and Nasdaq 100 futures were down 0.04%. Friday, the Dow slipped 0.02%, the S&P 500 fell 0.25%, the Nasdaq declined 0.52% and the Russell 2000 dropped 1.4%. Despite Friday’s decline, the S&P 500 gained 0.49%, the Nasdaq 0.85% and the Dow 0.53% for the week.
Treasury yields rose sharply Friday following Warsh’s hawkish Jackson Hole remarks. The 2-year yield climbed 12 basis points to 4.35%, the 10-year rose 5 basis points to 4.72% and the 30-year gained 2 basis points to 5.21%. Early Monday, the 2-year is holding around 4.34%, the 10-year near 4.73% and the 30-year around 5.20%. Markets now assign approximately a 58%-60% probability of a September rate increase, up from roughly 35% before Warsh said the Fed would have “more work to do” unless inflation moves convincingly toward 2%.
The DXY closed Friday at 99.65 and is near 99.53 this morning. The euro is around $1.160, sterling near $1.354 and the dollar near ¥159.6, after briefly moving above ¥160 Friday. Commodities are diverging sharply: October WTI settled Friday at $83.43 but is up more than 3% near $86.36 this morning following renewed U.S. strikes on Iran’s Larak Island and Iranian retaliation. December gold, which plunged 3.28% Friday to $4,510.90, is down another roughly 1% near $4,486 as higher yields and a firmer dollar outweigh safe-haven demand.
Today’s domestic calendar is light, with the final August S&P Global Manufacturing PMI due at 9:45 a.m. ET. Attention quickly shifts to a labor-heavy week: July JOLTS and ISM Manufacturing Tuesday, ADP employment Wednesday, jobless claims and services data Thursday, and the August employment report Friday. Consensus expects roughly 58,000 new payrolls in August with unemployment holding at 4.1%. Broadcom’s earnings Wednesday are the other major market catalyst. G20 finance ministers and central bankers also meet today and Tuesday in North Carolina with inflation, rates, U.S. debt and the Iran conflict expected to dominate discussions.
Sector Highlights
Sector performance rotated sharply Friday. Consumer Discretionary led with a 1.69% gain, followed by Communication Services +1.56%, Energy +0.59%, Consumer Staples +0.55% and Financials +0.34%. Technology fell 1.29%, Utilities declined 1.14%, Industrials lost 0.96%, Real Estate fell 0.49%, Materials declined 0.30% and Health Care slipped 0.25%. Breadth was weak, with decliners leading 1.38:1 on the NYSE and 2.25:1 on the Nasdaq.
Information Technology
- Nvidia (NVDA +0.7% premarket) is outperforming despite Friday’s 4.6% decline. Investors continue to digest Nvidia’s forecast for approximately 70% revenue growth next fiscal year, which reinforced expectations for sustained AI infrastructure spending despite higher rates and geopolitical risk. Nvidia is the only Magnificent Seven stock higher in early trading Monday.
- Intel (INTC +1.7%), Lam Research (LRCX +1.0%) and Texas Instruments (TXN +0.9%) are also higher premarket as semiconductor shares remain relatively resilient despite the broader risk-off setup. AI and digital-infrastructure stocks continue to attract demand following Nvidia’s strong outlook.
- Broadcom (AVGO) reports Wednesday in the next major test of AI infrastructure spending. Investors will focus on custom accelerators, AI networking demand and whether management can provide the type of longer-term visibility Nvidia offered last week. Broadcom has a market capitalization near $1.7 trillion and is one of the most influential remaining earnings reports of the quarter.
- Dell Technologies (DELL) and Palo Alto Networks (PANW) also report this week. Dell’s commentary will be important for AI servers and the effect of elevated memory costs on hardware margins, while Palo Alto provides another read on cybersecurity spending and enterprise AI-security demand.
- Marvell Technology (MRVL -10.3% Friday) remains under pressure after investors questioned the timing of revenue from its expanded custom-AI-chip relationship with Alphabet’s Google. The decline came despite Marvell raising its fiscal 2027 revenue forecast, highlighting the market’s high expectations for near-term AI monetization.
Energy
- Halliburton (HAL +2.5% premarket) and Valero Energy (VLO +2.2%) are leading energy shares higher as WTI jumps above $86. U.S. forces struck Iranian launchers on Larak Island Sunday and Iran subsequently reported attacks on two U.S. bases in Jordan, renewing concern about supply interruptions through the Strait of Hormuz.
- Exxon Mobil (XOM) and Chevron (CVX) remain leveraged to the renewed crude-price spike and elevated refining margins. Both companies have previously warned that disrupted Middle East crude and refined-product flows could keep global diesel and fuel markets tight through the second half of 2026.
Financials
- Coinbase (COIN) is up roughly 1% premarket as bitcoin holds above $78,000. Crypto-linked equities are broadly firmer, with Strategy (MSTR) and CleanSpark (CLSK) gaining roughly 1%-2% despite the stronger dollar and higher short-term yields.
- PayPal (PYPL -12.7% Friday) remains in focus after reports that the Advent International-Stripe consortium abandoned its takeover pursuit. The shares had incorporated a substantial acquisition premium after reports of a possible $60.50-per-share offer, leaving the stock vulnerable when the potential transaction disappeared.
Communication Services
- Alphabet (GOOGL +1.7% Friday) helped make Communication Services Friday’s second-best-performing sector despite the broader market decline. Alphabet remains closely tied to this week’s Broadcom report because Google is a major customer for Broadcom’s custom AI accelerators and networking products.
- Comcast (CMCSA) and Disney (DIS) remain exposed to growing regulatory uncertainty around U.S. broadcasters. President Trump said Sunday that NBC’s Kristen Welker would be reported to the FCC, while the FCC is already investigating Comcast’s relationships with NBC affiliates. Disney has separately sued the FCC over an early review of licenses for eight ABC stations.
Consumer Discretionary
- Gap (GAP +12.9% Friday) was one of Friday’s largest consumer gainers after raising its annual profit forecast and naming industry veteran Michael Francis as CEO of Old Navy. Gap-brand comparable sales increased 10% in the quarter, although Old Navy comps fell 4% and Athleta declined 12%. Management raised full-year adjusted EPS guidance to $2.35-$2.45.
- Ulta Beauty (ULTA -4.2% Friday) fell despite reporting better-than-expected quarterly earnings and raising its annual outlook. Investor concern centered on slower comparable-sales growth and an elevated valuation following the stock’s prior rally.
- Fast-fashion competition is also in focus after Shein fell more than 10% in Hong Kong gray-market trading ahead of its Tuesday listing. Shein raised roughly $1.7 billion at a valuation near $26.5 billion, barely one-quarter of its peak 2022 private-market valuation, as tariff changes and weaker investor enthusiasm for fast fashion weigh on the business model.
Industrials
- FedEx (FDX) is in focus after takeover target InPost reported a modest second-quarter earnings beat but cut its 2026 core-profit outlook to a mid-single-digit decline because of investment costs, competitive pricing and restructuring expenses in the UK and Ireland. FedEx and Advent are leading a roughly €7.8 billion ($9 billion) acquisition of InPost that has received regulatory clearance and remains open through September 18.
- Science Applications International (SAIC) reports Monday, with consensus expectations near $2.31 per share. The report provides an early-week read on government IT, defense and professional-services spending before the earnings calendar becomes more technology-heavy later in the week.
Data sourced from Factset/Reuters
