US stocks fell Friday after a hawkish Jackson Hole speech from Fed Chair Kevin Warsh sharply repriced September rate hike odds, lifting Treasury yields and the Dollar. The Nasdaq led declines as higher yields weighed on tech stocks. Oil eased slightly on hopes for a Strait of Hormuz resolution, while gold tumbled over 3% on the stronger dollar and higher yields. Today’s calendar is quiet, with a UK bank holiday and German CPI data.
📊 Equities
US stocks pulled back in trading on Friday as markets reacted to a more hawkish tone from Fed Chair Kevin Warsh at Jackson Hole, with his comments that the Federal Reserve remains focused on fighting inflation prompting a sharp repricing of September rate expectations. Markets moved quickly after the keynote speech, with the probability of a Fed rate hike at the September meeting rising from around 40% before the speech to close to 60% afterwards.
The Dow Jones slipped 0.02% to 53,559, while the S&P 500 fell 0.25% to 7,711. The Nasdaq was the weakest of the major indices, declining 0.52% to 26,402 as higher yields weighed on risk appetite and technology stocks.
🛢️ Oil
Commodities moved sharply lower, with oil prices settling slightly lower as traders weighed the Fed’s inflation concerns alongside reports of a possible agreement that could allow shipping to resume through the Strait of Hormuz. Brent crude fell 0.47% to $88.10, while WTI slipped 0.16% to $83.40.
🥇 Gold
Gold was the standout mover, crashing 3.22% to $4,452.67 as the stronger US Dollar and sharply higher Treasury yields triggered a significant pullback in the precious metal.
💵 FX & Bonds
Treasury yields pushed higher, led by the front end of the curve, while the Dollar also surged as traders priced in a more hawkish Fed outlook. The Dollar Index climbed 0.52% to 99.68, while the US 2-Year Treasury yield jumped 11.1 basis points to 4.343%. The US 10-Year yield also moved higher, adding 4.2 basis points to 4.718%.
| Market | Change | Close |
|---|---|---|
| Dow Jones | -0.02% | 53,559 |
| S&P 500 | -0.25% | 7,711 |
| Nasdaq | -0.52% | 26,402 |
| US Dollar Index (USD) | +0.52% | 99.68 |
| US Treasury 2Y | +11.1 bps | 4.343% |
| US Treasury 10Y | +4.2 bps | 4.718% |
| Brent Crude | -0.47% | $88.10 |
| WTI Crude | -0.16% | $83.40 |
| Gold | -3.22% | $4,452.67 |
📌 Today’s Focus
It is a relatively quiet day on the economic calendar today, with the UK observing a bank holiday and Germany due to release preliminary CPI data. However, traders will likely remain alert to further positioning following Friday’s hawkish Fed update, with any fresh developments around the Strait of Hormuz also likely to keep volatility elevated.
🔹 European Session – All Day – UK – Bank Holiday
🔹 European Session – All Day – Germany – Preliminary CPI Data