- Thursday’s Wall Street session is also bringing moderate declines, led by the Dow Jones Industrial Average as Walmart shares fall more than 8% after earnings. US30 futures are down close to 1%, the S&P 500 is lower by 0.55%, while the Nasdaq 100 is down more than 0.7%.
- Investors are being unsettled by a stronger U.S. dollar and rebounding Treasury yields, which are erasing a large part of yesterday’s decline triggered by the U.S. Treasury Department’s intervention in the bond market. Brent crude futures (OIL) are trading above $93.5 per barrel, the highest level since July 24.
- SpaceX shares are drawing attention with a decline of more than 6%. Moderna shares are down 25% after yesterday’s surge of more than 100%, which followed reports of encouraging results from the mRNA cancer therapy the company is developing together with Merck.
- U.S. data generally point to a still-solid labor market and stronger manufacturing activity. Initial jobless claims fell to 206,000 versus 210,000 expected, although continuing claims rose to 1.799 million compared with the 1.788 million forecast. The Philadelphia Fed Business Index jumped to 47.4 from 41.4, clearly beating the consensus estimate of 25 and confirming strong manufacturing activity. In addition, the CB Leading Index rose 0.2% MoM versus 0.1% expected and a previous decline of 0.2%. Taken together, these data do not give the Fed a clear argument for rapid policy easing.
- Fed’s Alberto Musalem does not want to pre-judge the Federal Reserve’s decision at the September meeting and stressed that he does not currently have a strong view on the direction of the next move. He noted, however, that core inflation should be taken into account during supply shocks and that raising rates earlier could reduce the need for even stronger tightening later. In his view, reaching the 2% inflation target is less likely at the current level of rates, which gives his comments a cautious and slightly hawkish tone.
- The 30-year TIPS auction was fairly strong. The 2.973% yield came in below the 2.991% WI level, while the bid-to-cover ratio rose to 2.82 and the share of so-called indirect bidders reached 84.4%, pointing to solid demand from large investors. At the same time, a real yield close to 3% remains high, so while the auction is a positive short-term signal for the bond market, it still implies demanding valuation conditions for growth and technology stocks.
- Nvidia announced a new AI chip designed for the Chinese market, with initial small-volume shipments to local customers expected to begin before the end of the year.
- According to a statement from U.S. CENTCOM, MV-22B Osprey aircraft are operating from the flight deck of the USS Boxer (LHD 4) as the vessel transits the Arabian Sea and continues to enforce the U.S. blockade against Iran. As of August 20, U.S. forces had redirected 67 commercial vessels, disabled 3 and boarded 2 to ensure compliance.
- U.S. Treasury Secretary Scott Bessent reiterated the administration’s strong-dollar policy and argued that weak economic growth remains the biggest threat to financial stability, which is why the U.S. wants to support global pro-growth initiatives and bring growth and debt issues back to the center of the G20 agenda. On Iran, his message was much tougher: he spoke about maximum economic pressure, secondary sanctions on countries doing business with Tehran, and coordinated economic isolation aimed at reducing the risk of renewed military escalation. If talks with Iran and China make progress, the U.S. could consider easing some oil sanctions, which would be potentially important for the crude market and flows through the Strait of Hormuz.
- Bessent also said there is a strong possibility that the U.S. fiscal deficit has already reached its peak, although it has temporarily increased because of tariff refunds. He argued that the U.S. cannot simply “grow its way” out of the debt problem and said a fiscal-policy announcement should come either by the end of this week or at the beginning of next week.
- Bitcoin continues to rise and has broken above $72,000, while Ethereum is trading above $2,340. Precious metals are also holding up relatively well: gold is slightly lower after yesterday’s gains, while silver is up more than 2% and, similarly to Bitcoin, has broken above its 200-session exponential moving average (EMA200), signaling a potential return of the upward trend.
(summary in progress)
US30 chart (D1 interval)
The contract has reached the 50-session exponential moving average, a level from which rebounds have repeatedly started since May this year. US30 is currently trading in the upper part of its rising price channel. An important medium-term support zone is located near 50,000 points and is additionally reinforced by previous price action in that area. For bulls, the key task now is to reclaim the 54,000-point level.
Source: xStation5
The Dow Jones remains relatively close to its all-time highs, around 1.9% below the ATH, while 70% of index constituents are still trading above their SMA200, suggesting that the medium-term market structure remains healthy despite the weaker session. Valuation is the more obvious concern: a trailing P/E of 24.9x, EV/EBITDA of 21.6x and P/B of 8.2x show that investors are paying a clear quality premium for the DJIA and have limited room for earnings disappointment. Sector rotation is also visible, with healthcare and energy holding up better while industrials weigh on the index, which is consistent with rising yields and renewed pressure from higher capital costs. At these multiples, the Dow increasingly looks like an index where further upside will require genuine earnings growth rather than another round of valuation expansion.
Today’s weakness in the Dow is not a broad-based selloff, but is heavily concentrated in a handful of large companies. Walmart is down around 8.8%, Boeing 3.0%, Home Depot 2.4% and American Express 1.8%, while Coca-Cola is up 1.6%, Travelers 1.2%, and Chevron and McDonald’s are each gaining around 0.9%. The valuation gap is striking: Walmart trades at around 40.3x earnings and Boeing at 72.3x, while Travelers is valued at roughly 9.2x and Goldman Sachs at 14.5x, so the market is punishing companies much more aggressively where expectations had already been elevated.
Source: XTB Research
US Open: US100 falls 0.7% as Treasury yields and oil prices surge 🚩 Walmart under pressure
Walmart falls 6% despite strong results 📉 What did the largest U.S. retailer reveal?
Nasdaq falls ahead of the Wall Street open 🚩 Dollar attempts to recover losses
💵EURUSD tests 1.17 due to Bessent
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