Macro update
Megacap technology stocks weigh on Wall Street: The S&P 500 declined 0.37% and the Nasdaq fell 1.32% on Monday as major technology names came under pressure, with Alphabet dropping 5% and SpaceX sliding 16.4% following its inaugural debt issuance, while the Dow Jones managed a 0.29% gain thanks to strength in healthcare and industrial shares.
Asian equities edge lower in Tuesday trading: MSCI’s Asia-Pacific index excluding Japan slipped 0.5%, Japan’s Nikkei fell 1% after an eight-session winning streak, and South Korean stocks lost 2%, while S&P 500 futures pointed to a weaker US open.
Markets raise expectations for further Federal Reserve tightening: Investors now see a 75% chance of a September rate increase and a 54% probability of at least two 25-basis-point hikes before the end of the year, up sharply from 15.2% a week ago, after Fed Chair Kevin Warsh reinforced the central bank’s commitment to bringing inflation back to target.
Dollar remains near a one-year high as yields stay elevated: The dollar index held around 101.06, supported by Treasury yields, with the two-year note trading close to its highest level in 16 months.
Oil prices continue to retreat as Hormuz traffic normalises: Brent crude eased a further 0.3% to $77.70 a barrel, extending Monday’s decline of more than 3% after the US granted Iran a 60-day sanctions waiver, while tanker traffic through the Strait of Hormuz continued to recover.
Yen remains close to its weakest level in nearly four decades: The Japanese currency traded at 161.62 per dollar, near levels not seen since 1986, prompting emergency discussions between Japanese Finance Minister Katayama and US Treasury Secretary Bessent, although officials stopped short of signalling any imminent market intervention.
