- U.S. equity indexes fell during Tuesday’s session, extending their correction. The Nasdaq 100 and S&P 500 lost over 1.2% and nearly 1.1%, respectively. Almost all sectors traded lower, with the steepest declines seen in software and semiconductor stocks.
- U.S. Treasury yields climbed, with the 10-year rising nearly 5 basis points to 4.275%. The dollar strengthened more than 0.6%, while EURUSD declined sharply.
- Gold rose nearly 1.5% despite dollar strength, supported by strong demand for safe-haven assets. The weaker ISM employment component may be interpreted by markets as an early signal of soft August Nonfarm Payrolls (due Friday). Silver is also up slightly, above $40.8, while Bitcoin rebounded to $111k again.
- The United States revoked Taiwan Semiconductor’s (TSMC) license to sell chips to China. Although the ban applies only to older-generation semiconductors, investors viewed the regulatory intervention negatively—especially in light of Nvidia’s statement that it is negotiating Blackwell AI sales to China.
U.S. data showed still-high but lower-than-expected prices and a mixed picture in manufacturing, with new orders rising but employment falling.
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ISM Manufacturing: 48.7 (forecast: 48.9; prior: 48.0)
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Employment Index: 43.8 (prior: 43.4)
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Price Index: 63.7 (forecast: 65.2; prior: 64.8)
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New Orders: 51.4 (prior: 47.1)
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Construction Spending (m/m): -0.1% (forecast: -0.1%; prior: -0.4%)
- PepsiCo shares pared much of their earlier gains, closing 2% higher after activist fund Elliott Management disclosed a $4 billion stake in the company.
- Natural gas fell nearly 2%, after dropping close to 4% earlier in the session, pressured by seasonally weaker demand in the U.S. and cooler weather on both coasts. Coffee prices declined following record gains, while cocoa also traded lower.
- The British pound came under heavy selling pressure following deteriorating U.K. macro data and growing concerns about future Bank of England policy. The FTSE 100 index fell almost 0.9%.
- Eurozone CPI inflation exceeded expectations. Core inflation held at 2.3% y/y (vs. 2.2% forecast), while headline inflation came in at 2.8% y/y, also above estimates. The euro strengthened after the release, and German bund yields rose.
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