S&P 500 -0.43% to 45,282.47 US yields higher: 2-year +2.5 bps last week to 3.734%Gold -0.11% to $3,367.87 an ounceDXY +0.72% last week to 98.43What to look out for today
Companies reporting on Tuesday, 26th August: MongoDB
Key data to move markets today
UK: A speech by BoE external member Catherine Mann.
US: Durable Good Orders and Nondefence Capital Good Orders, Housing Price Index, Consumer Confidence, and New Home Sales.
US Stock Indices
Dow Jones Industrial Average -0.77%.
Nasdaq 100 -0.31%.
S&P 500 -0.43%, with 9 of the 11 sectors of the S&P 500 down.
Major stock indexes fell on Monday, with the Dow Jones Industrial Average leading the decline with a loss of -0.77%, or 349 points.
In addition to broader macroeconomic concerns, the market's next significant test will be a report on a key driver of recent gains: the enthusiasm surrounding AI. Nvidia, the final company among the Magnificent Seven to release its earnings, is scheduled to unveil its results on Wednesday after the market closes. Investors hope these results will alleviate concerns about AI spending and confirm that the stock market's recent rally is not merely a technology bubble.
In corporate news, Keurig Dr Pepper has reached an $18 billion agreement to acquire JDE Peet’s, the owner of Peet’s Coffee. According to The Wall Street Journal, this transaction is a prelude to Keurig Dr Pepper's plan to spin off its coffee brands into a separate publicly traded company.
In a lawsuit, Elon Musk accused Apple and OpenAI of unfairly favoring their artificial intelligence app on iPhones and hindering competition for other chatbot developers.
Private equity firm Thoma Bravo has agreed to acquire Verint Systems for $1.23 billion in cash. This deal comes just days after the firm announced a $12.3 billion takeover of Dayforce.
Galaxy Digital, Multicoin Capital, and Jump Crypto are reportedly in discussions with potential investors to raise approximately $1 billion. The funding would be used to build a treasury dedicated to accumulating the digital token Solana, in what would be the largest such fund.
Webull announced it will allow its US customers to buy and sell cryptocurrencies on its trading platform again. The company had suspended this service in 2023 as part of its efforts to go public.
AbbVie has agreed to purchase an experimental depression treatment from Gilgamesh Pharmaceuticals for up to $1.2 billion. This deal underscores the pharmaceutical industry's increasing interest in next-generation psychedelic compounds for therapeutic use.
S&P 500 Best performing sector
Communication Services +0.44%, with Take-Two Interactive Software +1.22 %, Alphabet +1.18 %, and Netflix +1.11 %.
S&P 500 Worst performing sector
Consumer Staples -1.62%, with Keurig Dr Pepper -11.48%, Estee Lauder Companies -2.80%, and Philip Morris International -2.55%.
Mega Caps
Alphabet +1.18 %, Amazon -0.39%, Apple -0.26%, Meta Platforms -0.20%, Microsoft -0.59%, Nvidia +1.02 %, and Tesla +1.94 %.
Information Technology
Best performer: Seagate Technology Holdings +3.01 %.
Worst performer: Gartner -3.37%.
Materials and Mining
Best performer: Smurfit WestRock +4.60 %.
Worst performer: LyondellBasell Industries -2.93%.
European Stock Indicest
UK markets were closed in observance of the Summer Bank Holiday.
Commodities
Gold spot -0.11% to $3,367.87 an ounce.
Silver spot -0.70% to $38.55 an ounce.
West Texas Intermediate +1.51% to $64.73 a barrel.
Brent crude +1.39% to $68.76 a barrel.
Gold prices remained relatively stable on Monday, with investor attention focused on US Personal Consumption Expenditures (PCE) data which is scheduled for release on Friday. Gold’s upward momentum was restrained by a strengthening US dollar.
Spot gold edged down -0.11%, settling at $3,367.87 per ounce. The US dollar appreciated by +0.72%, making the dollar-denominated bullion more expensive for international buyers. The rally in gold prices to a near two-week high on Friday was a response to Fed Chair Jerome Powell's remarks, which indicated the possibility of an interest rate cut at the next FOMC meeting.
Oil prices rose more than one percent on Monday, extending last week's gains. This increase was driven by market anticipation of further US sanctions on Russian oil and concerns over potential supply disruptions from Ukrainian attacks on Russian energy infrastructure.
Brent crude futures settled up 94 cents, or +1.39%, at $68.76 per barrel, while West Texas Intermediate crude futures climbed 96 cents, or +1.51%, to $64.73 per barrel.
Ukrainian drone attacks have intensified, with a strike on Sunday causing a significant fire at the Ust-Luga fuel export terminal. Additionally, a fire at Russia's Novoshakhtinsk refinery, also attributed to a Ukrainian drone attack, continued for a fourth day. The Novoshakhtinsk refinery, with an annual capacity of 5 million metric tons (approximately 100,000 barrels per day), primarily sells fuel for export.
Furthermore eight members of OPEC+ are scheduled to meet on 7th September to discuss, and likely approve, an additional increase in supply.
Note: As of 5 pm EDT 25 August 2025
Currencies
EUR -0.88% to $1.1619.
GBP -0.50% to $1.3454.
Bitcoin -6.07% to $109,931.72.
Ethereum -10.28% to $4,352.85.
The US dollar rebounded on Monday and gained against most major currencies.
The dollar index rose by +0.72% to 98.43, marking its largest daily percentage increase since 30th July. The euro was -0.88% to $1.1619. It had reached a four-week high of $1.1742 on Friday. The British pound fell by -0.50% against the dollar, trading at $1.3454, and the Japanese yen weakened by -0.51% to ¥147.68 per dollar.
In addition to the Fed's policy direction, market participants remain attentive to the US President's criticism of Fed Chair Jerome Powell and other Fed officials. These comments have sparked concerns about the central bank's independence.
Looking ahead, investors will be focused on key economic indicators that could influence the Fed's future policy, including the PCE price index, due on Friday, and the August monthly payrolls report, scheduled for release a week later.
Fixed Income
US 10-year Treasury +1.2 basis points to 4.276%.
German 10-year bund +3.7 basis points to 2.764%.
UK markets were closed in observance of the Summer Bank Holiday.
US Treasury yields climbed on Monday in anticipation of this week's sales of short- and intermediate-term debt.
The yield on the 2-year note, which reflects interest rate expectations, increased by +2.5 bps to 3.734%. The 10-year note yield rose +1.2 bps to 4.276%, while the 30-year yield saw a modest gain of +0.2 bps, reaching 4.890%.
The rise in yields was also likely influenced by traders preparing for the upcoming auctions. Market activity is expected to be subdued ahead of the US Labor Day holiday next Monday. The primary economic release this week will be the PCE data on Friday.
The US Treasury's auction schedule for the week includes the sale of $69 billion in two-year notes on Tuesday, $70 billion in five-year notes on Wednesday, and $44 billion in seven-year notes on Thursday.
Fed funds futures traders are now pricing in a 84.7% probability of a rate cut in September, up from 82.7% last week, according to CME Group's FedWatch Tool. Traders are currently anticipating 55.5 bps of cuts by year-end, higher than the 53.0 bps expected last week.
Across the Atlantic, eurozone government bond yields rose on Monday, reversing the decline from late last week that was prompted by the Fed's policy signals at Jackson Hole. This shift occurred as traders re-evaluated the impact of the Fed's actions on European monetary policy.
New data from Germany's Ifo Institute showed that German business morale unexpectedly improved in August, reaching a 15-month high. This bolstered the view that the ECB may be nearing the end of its monetary easing cycle. ECB President Christine Lagarde emphasised the resilience of the eurozone labour market at Jackson Hole, although she did not discuss the policy outlook. Markets now consider a further rate cut this year unlikely, though a move in early next year is still seen as a reasonable possibility.
Yields across the German bond curve reflected this sentiment. The yield on Germany's 10-year bond rose by +3.7 bps to 2.764%, moving back toward its recent five-month peak of 2.790%. The 30-year yield increased by +2.6 bps to 3.334%, just shy of its 14-year high from last week. At the shorter end, the 2-year yield climbed +3.2 bps to 1.976%.
Yields on Italy's 10-year bond largely mirrored the trend in Germany, rising +5.4 bps to 3.583%. This widened the spread between German and Italian 10-year yields by 1.7 bps.
Note: As of 5 pm EDT 25 August 2025
Global Macro Updates
German business sentiment continues to improve. German business morale unexpectedly improved for the eighth consecutive month in August, with the Ifo Business Climate index rising to 89.0, its highest level in over two years. This upward trend indicates growing optimism among German companies, though significant challenges persist.
The residential construction sector showed notable progress, as its sentiment index improved from -25.8 points in July to -23.5 points in August. Additionally, companies reported fewer order shortages, with the figure dropping from 47.9% to 46.1%, and a decline in cancellation rates to 8.2%. Despite these positive indicators, Ifo's survey head, Klaus Wohlrabe, stated that while companies are cautiously hopeful, they are still far from optimistic.
Analysts, however, have expressed caution, noting that the source of this optimism is not entirely clear. Germany's export-oriented economy faces significant headwinds, including existing US tariffs of 15% on European goods and the threat of new automotive tariffs. Furthermore, a stronger euro could undermine the competitiveness of German exports. The nation's economic recovery now largely depends on the government's fiscal stimulus measures, particularly in infrastructure and defence spending.
Trump attempts to fire Fed Governor Lisa Cook. In a letter posted on Truth Social, President Donald Trump announced the immediate removal of Fed Governor Lisa Cook, citing what he described as gross negligence and false statements she may have made on one or more mortgage agreements. Trump stated that these actions provided sufficient cause for her early termination, despite her term being scheduled to run until 2038.
In response, Cook's lawyer noted that the President lacks the authority to fire her, and that an ‘unspecified’ response to Trump's action would be forthcoming. Some legal analysts speculate that Cook may seek an immediate injunction to be reinstated while the matter proceeds in court.
This action follows a warning from President Trump last week that he would fire Cook if she did not resign. The warning came after Bill Pulte, Director of the Federal Housing Finance Agency, alleged that she had committed mortgage fraud and referred her for a Department of Justice investigation.
The move to oust Cook coincides with the administration's attempt to fill another vacant board seat following the resignation of former Fed Governor Adriana Kugler earlier this month. Trump is currently advocating for the Senate to confirm Stephen Miran, chair of the Council of Economic Advisers, to the board. Cook's removal intensifies long-standing concerns about Trump's efforts to exert influence over the Fed and compromise its independence, particularly in light of his repeated public criticism of Chair Jerome Powell for not cutting interest rates.
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