General Market News

Six months into the Iran war, OPEC+ has lost its traditional ability to influence oil markets as the conflict has blocked the Strait of Hormuz and damaged infrastructure across multiple member countries. The group's share of global oil output has fallen from 48% to 40% since late February. China has emerged as the new 'swing consumer,' with its import cuts helping balance markets more effectively than OPEC+ production decisions.

• OPEC+'s core group of seven producers (including Saudi Arabia and Russia) now accounts for only a quarter of world oil output in July, down significantly from pre-war levels
• China has purchased roughly 400 million fewer barrels of oil since the war began compared to the same period last year, driven by a fuel export ban, lower refining output, and increased electric vehicle adoption
• OPEC+ has announced six oil output increases since March, but most remain 'largely on paper' due to the Hormuz blockade, with these decisions having minimal impact on oil prices except during a brief July ceasefire

French telecom operator Iliad reported a 2.2% increase in first-half 2026 core profit to €2 billion ($2.3 billion), driven by strong performance in Italy. Consolidated revenue rose 3% to €5.24 billion, reflecting the company's evolution from a French market disruptor to a broader European telecoms group with growing contributions from Italy and Poland.

• Italy revenue surged 10.2% to €665 million, significantly outpacing France's 1.5% growth to €3.32 billion and Poland's 3.5% increase to €1.26 billion
• The company added 300,000 new customers during the period, with growth driven primarily by mobile subscribers while fixed-line customer base declined
• Results demonstrate Iliad's successful geographic diversification, with Italy and Poland now representing an increasing share of total revenue beyond its traditional French base

Six months after U.S. and Israeli bombing of Iran triggered a Middle East conflict, global markets have experienced disrupted energy supplies with Brent crude averaging $90 in 2026 versus $70 in 2025, though global stocks hit record highs driven by AI sector investment. The conflict has particularly impacted Gulf economies, fertilizer shipments, and food prices, while traditional safe-haven assets have failed to perform their typical defensive roles.

• Brent crude briefly topped $120 in April and now averages around $90 in 2026, up from roughly $70 last year, with diesel prices rising sharply due to Gulf export disruptions and Russian refinery outages
• Global stocks gained $7 trillion (9%) since the war began, reaching a $105 trillion record high, as AI sector investment cushioned geopolitical concerns, though Gulf markets underperformed with Qatar and UAE stocks down 14%
• Gulf economies face severe damage: Saudi exports shrank 10% quarter-over-quarter, Dubai property sales plummeted 70%-80%, and Qatar's economy is expected to shrink nearly 30% this year due to damage at its Ras Laffan gas facility

Treasury Secretary Scott Bessent and Federal Reserve Chairman Kevin Warsh are displaying conflicting approaches to managing U.S. financial markets, with Bessent favoring interventionist tools like bond buybacks to control long-term rates while Warsh advocates letting markets set prices more freely. The disagreement comes as the Trump administration attempts to contain borrowing costs amid rising yields, with 30-year rates hitting a 19-year high. The clash will be highlighted at the Fed's Jackson Hole event where Warsh is scheduled to speak.

• Bessent announced Treasury would pause buybacks of longer-dated debt after 30-year yields reached a 19-year high, signaling Washington won't let 10-year yields approach 5% without intervention
• Warsh has criticized large-scale Fed asset purchases and wants to retreat from extensive communication policies, preferring markets play a bigger role in setting rates rather than central bank intervention
• Many investors and billionaire Stanley Druckenmiller argue Bessent is fighting the wrong battle, as rising yields reflect fundamentals like strong growth, sticky inflation, and fiscal deficits rather than market dysfunction

An oil tanker was struck by an unidentified projectile in the Strait of Hormuz on Tuesday, the latest attack testing President Trump's assertion that the waterway is 'functioning' after mine clearance. Traffic through the vital energy corridor remains drastically reduced at just five confirmed crossings Tuesday compared to over 130 daily before the conflict, while U.S. allies reportedly doubt Iran's mines have been fully cleared.

• Only five ships crossed the strait Tuesday, down from 130+ vessels daily pre-war, with all using Iran's designated unilateral route despite U.S. escort operations along the Omani side
• U.S. allies are skeptical of Trump's claims that Iranian mines have been fully cleared from the waterway, contradicting his Wednesday statement calling Hormuz 'a functioning strait'
• Iran's Foreign Minister called on the UN to condemn U.S. 'economic terrorism' and warned the strait won't fully reopen until the U.S. fulfills commitments under a lapsed June interim peace deal

Online fast-fashion retailer Shein is set to raise $1.7 billion through its Hong Kong initial public offering, selling 280 million shares. The Singapore-headquartered company, originally founded in China, is pricing its long-awaited IPO on Monday at HK$48.56 per share. This represents a significant capital raise for one of the world's largest fast-fashion retailers.

• The offering will sell 280 million shares at HK$48.56 per share, raising approximately $1.7 billion
• Shein is headquartered in Singapore but was originally founded in China, and is choosing Hong Kong for its public listing
• The IPO pricing is scheduled for Monday, marking the completion of the company's long-awaited public market debut

South Korea's central bank raised interest rates by 25 basis points to 3% on Thursday, marking its second consecutive hike as it battles elevated inflation. Core inflation reached its highest level since December 2023, while headline inflation has risen monthly since February due to war-related cost pressures, prompting the Bank of Korea to signal further rate increases ahead.

• The rate hike to 3% marks the highest level since January 2025, with the BOK indicating a policy stance 'consistent with further rate hikes' as inflation remains above the 2% target
• Housing prices in Seoul surged 2.5% month-over-month in June, the highest increase in five years, contributing to accelerating cost pressures in the capital region
• Strong semiconductor sector growth is expected to drive robust export and domestic demand, which the central bank warns will keep inflation elevated for a considerable period

Former JPMorgan Chase executive Jes Staley testified to U.S. lawmakers that he repeatedly shared confidential bank information with convicted sex offender Jeffrey Epstein, including details about Federal Reserve communications, deal information, and his own compensation. The admissions came during a House Committee investigation into Epstein's ties with political and business elites, with transcripts released in August 2026.

• Staley disclosed sensitive JPMorgan information to Epstein including the bank's Federal Reserve communications during the 2008 financial crisis, a $44 billion private bank inflow figure, compensation details, and pending deals
• Staley informed Epstein that JPMorgan had designated him a high-risk client and raised concerns about his large cash withdrawals
• Staley signed documents for Epstein's trust in 2014 and 2015 but later declined to serve in the role, stating he did not want to be associated with the estate

Nvidia, the world's most valuable company at over $5.1 trillion, reported exceptional financial results that exceeded Wall Street expectations, with gross profit reaching $133.3 billion in the first half of the year. The chipmaker's revenue surged 106% to $96.2 billion in the three months to July, and it forecast 70% revenue growth for next financial year, signaling continued strength in the AI boom. The company's performance has become a key indicator for both AI industry health and the broader global economy.

• Data centre revenue hit a record $89 billion in the three months to July, up 117% year-over-year, driven by demand for AI infrastructure
• Nvidia now comprises more than 7% of the entire S&P 500 index, making it a significant market player whose performance impacts global economies
• The company announced a major deal with Amazon Web Services (AWS) to deploy two million AI-powered graphics processing units

President Donald Trump signed an executive order on Wednesday banning certain foreign-produced equipment from the U.S. electricity grid, declaring a national emergency over foreign threats to bulk-power systems. The order prohibits the purchase and installation of foreign electric equipment and associated software that could pose cybersecurity or operational risks.

• The order declares a national emergency citing 'unusual and extraordinary foreign threat' from foreign-produced bulk-power systems with potential national security vulnerabilities
• The ban covers foreign-produced bulk-power system electric equipment, including critical software and digital capabilities that could create cybersecurity risks
• The U.S. Energy Secretary is directed to impose conditions on continued use and operation of existing foreign equipment already installed in the grid

A CNBC Fed Survey reveals that 80% of economists want Federal Reserve Chairman Warsh to provide more insight into his economic views ahead of his first keynote speech at the Jackson Hole symposium. The survey also shows widespread skepticism about Treasury Secretary Bessent's efforts to control bond yields, with 77% believing those efforts will fail.

• Warsh has adopted a minimal communication approach, declining to offer economic views or policy guidance to get an 'unfiltered' market view, breaking from predecessor practices
• Survey respondents are divided on the rate outlook: 53% expect rate hikes over the next year, 30% see cuts, and 16% forecast no change, with 40% probability of a September hike in futures markets
• Treasury's efforts to tamp down long-term yields through increased purchases of long-dated securities are viewed as ineffective, with the 10-year yield forecast to remain between 4.60% and 4.70% through end of next year

The Trump administration plans to announce new drug-pricing agreements with midsize biotech companies on Monday, according to Bloomberg News sources. The report could not be immediately verified by Reuters. This represents a continuation of administration efforts to address pharmaceutical pricing.

• Announcement expected Monday involving midsize biotech companies, not major pharmaceutical firms
• Details of the agreements and which companies are involved have not been disclosed
• The initiative is part of the administration's broader drug pricing policy efforts

Despite a weak July jobs report showing a loss of 23,000 payrolls and 103,000 in downward revisions, the underlying U.S. economy shows resilience with low layoffs, plentiful job openings, and strong private demand. All four dimensions of Shelton Capital Management's Recession Tracker turned positive for the first time in months, maintaining a 'Green | Low Risk' aggregate assessment.

• Real Final Sales to Private Domestic Purchasers, a cleaner measure of core private demand, accelerated to 3.9% in Q2 from 1.7% in Q1, significantly outpacing headline GDP growth of 1.5%
• The labor market weakness appears to be a supply issue rather than demand problem, with historically low layoffs and abundant job openings, while 264,000 workers left the labor force in July
• Markets recovered in a V-shaped pattern from late-July Iran-driven volatility that pushed VIX up 25% and oil to $92/barrel, following the repeated pattern of geopolitical scares creating buying opportunities

July's PCE inflation data showed headline inflation at 3.7% and core at 3.3%, well above the Fed's 2% target, raising the market-implied probability of a September 2026 rate hike to 44%. Fed Chair Kevin Warsh, nominated by President Trump with expectations of rate cuts, faces pressure as three FOMC members already voted to hike in July, meaning just four more votes could create a hiking majority.

• Three of 12 FOMC voting members already dissented in favor of hiking rates in July's 9-3 vote to hold, requiring only four additional votes to flip to a rate increase
• July PCE inflation remains 1.3 percentage points above the Fed's 2% target, with headline at 3.7% year-over-year and core at 3.3%
• Warsh has rejected traditional forward guidance and defied White House expectations for rate cuts, with his upcoming Jackson Hole speech on Aug. 28 considered particularly important for signaling policy direction

Russia's NORSI refinery, the country's fourth-largest oil refinery and second-largest gasoline producer, suspended crude oil processing on August 26 following a Ukrainian drone attack in the Nizhny Novgorod region. The attack damaged multiple processing units and infrastructure, leaving all of Lukoil's major Russian refineries now offline. The disruption affects a facility capable of processing 15 million metric tons of crude annually.

• NORSI produces approximately 5 million tons of gasoline and over 5 million tons of diesel annually, along with 2 million tons of fuel oil and 500,000 tons of bitumen
• All of Lukoil's major Russian refineries are now offline: NORSI suspended operations August 26, Perm refinery was hit August 21, and Volgograd refinery halted processing July 31
• The timeline for repairs and resumption of operations remains unclear as drone strikes damaged several processing units, inter-unit infrastructure, and general plant facilities

The White House is pressing the EPA to grant expanded biofuel blending waivers to small oil refineries, aiming to reduce gasoline prices ahead of November midterm elections. The push, led by senior adviser Stephen Miller and the Energy Dominance Council, could exempt 1.2-1.8 billion RINs from the record 26.81 billion gallon biofuel requirement for 2026. This move would benefit oil refiners but anger Midwest agricultural states that depend on strong ethanol mandates.

• The EPA is reviewing 34 waiver requests and initially projected approving around 1 billion RINs, but the White House is pushing for 1.2-1.8 billion RINs in exemptions
• Attorneys general from Iowa, South Dakota, and Missouri oppose expanded waivers, citing refiners' record profits and arguing exemptions undermine economic hardship claims
• The American Soybean Association warns high exemptions could eliminate 500 million gallons of biodiesel demand and cost soybean farmers approximately $1 billion in lost revenue

U.S. stock markets opened nearly flat on Wednesday after July inflation data came in above expectations, with headline PCE rising to 3.7% annually and core PCE at 3.3%. Markets are awaiting Nvidia's earnings report and Fed Chairman Kevin Warsh's Jackson Hole speech for further direction on monetary policy and AI-driven growth momentum.

• July PCE inflation rose 0.2% monthly and 3.7% annually, both 0.1 percentage point above consensus, keeping inflation above the Fed's 2% target
• Nvidia, the largest S&P 500 company with over $5 trillion market cap, reports fiscal earnings with Wall Street expecting $2.09 per share amid scrutiny of AI infrastructure spending sustainability
• Markets price roughly one-in-three chance of a Fed rate move in September, with December showing strongest probability for action as policymakers assess persistent inflation

U.S. equity indices are trading cautiously on August 26, 2026, as investors await key catalysts including Nvidia's after-market earnings and Federal Reserve Chair Kevin Warsh's speech at Jackson Hole on Friday. Markets are range-bound with the Nasdaq 100 near 29,245, hovering around the 50-day EMA, while geopolitical tensions in the Middle East add to uncertainty.

• The Nasdaq 100 is trapped between 28,500 support and 30,000 resistance, trading flat near its 50-day exponential moving average
• Both Nvidia earnings (due after market close Wednesday) and Friday's Jackson Hole speech will determine whether Fed policy signals turn hawkish or dovish
• Despite short-term hesitation, the S&P 500 remains bullish from a longer-term perspective, with analysts preferring to buy dips

Treasury yields remained largely flat on Tuesday as investors awaited July's personal consumption expenditure (PCE) inflation data, the Federal Reserve's preferred inflation gauge, set for release Wednesday morning. The 10-year Treasury yield held steady at 4.647%, while markets also focused on falling oil prices and the upcoming Jackson Hole Economic Policy Symposium beginning Thursday.

• The 10-year Treasury yield was unchanged at 4.647%, the 30-year bond yield held at 5.181%, and the 2-year note remained at 4.199%
• Oil prices extended declines with Brent crude falling 2.8% to $86.08 per barrel and U.S. crude down 3% at $79.93, easing inflation concerns amid reports of a potential Iran-Oman deal on Strait of Hormuz transit
• July PCE data and second-quarter GDP estimates are scheduled for Wednesday at 8:30 a.m., with Fed Chairman Kevin Warsh set to speak at Jackson Hole on Friday

Federal Reserve Chair Kevin Warsh faces intense scrutiny at this week's Jackson Hole symposium following Treasury Secretary Scott Bessent's controversial intervention to increase bond buybacks after 30-year Treasury yields hit a 19-year high. Markets are 'on edge' awaiting Warsh's speech, with analysts warning that failure to address rising yields could push long-term rates above 5.5% and trigger dollar weakness. The event is considered a 'key risk event' as investors seek clarity on Fed policy amid inflation running at 3.7% and concerns about central bank independence.

• Treasury announced it will at least double its maximum bond buyback operation to $4 billion starting Sept. 9, a move criticized by some as undermining the Fed's inflation fight and pressuring central bank independence
• The 30-year Treasury yield reached 5.173% (near 19-year highs) while inflation remains elevated at 3.7% year-over-year in July, above the Fed's target
• Bank of America warns the dollar is vulnerable to extended sell-off if Warsh 'disappoints markets' or focuses solely on structural themes rather than providing clear guidance on inflation and policy response