Is the Fed at odds with the Treasury?

S&P 500 -0.02% to 7,675.70

US 10-year yield +1.6 basis points to 4.650%

Spot gold -1.33% to $4,592.03 an ounce

DXY +0.22% to 99.13

What to look out for today

Companies reporting on Thursday, 27 August: Autodesk, Best Buy, Dollar Tree, Dollar General, Marvell Technology, Ulta Beauty, Workday

Key data to move markets today

EU: German GfK Consumer Confidence Survey and ECB Monetary Policy Meeting Accounts

USA: Initial and Continuing Jobless Claims and Jackson Hole Symposium

JAPAN: Tokyo CPI and Core CPI

Global Macro Updates

July core PCE. July core PCE was broadly in line with expectations, while personal spending and income exceeded consensus estimates. Core PCE rose 0.2% m/o/m, matching forecasts and accelerating from 0.1% in June. Headline PCE also increased 0.2%, compared with expectations of 0.15% and following a 0.1% decline in June. On an annualised basis, core PCE held steady at 3.3%, slightly above the 3.2% consensus estimate, while headline PCE was unchanged at 3.7% m/o/m.

Personal spending rose 0.2%, ahead of the 0.1% expected, although below June’s 0.3% increase. Personal income advanced 0.4%, also above the 0.2% forecast and prior reading. Overall, the PCE release capped a broadly favourable July inflation sequence, with CPI in line and PPI softer than expected.

US Stock Indices

Dow Jones Industrial Average -0.21%
Nasdaq 100 +0.05%
S&P 500 -0.02%, with 7 of the 11 sectors of the S&P 500 down

Investors tempered their expectations ahead of Nvidia’s Q2 earnings, contributing to a modest decline in US equities.

Trading on Wall Street was subdued during a slow late-summer session, which recorded the third-lowest trading volume of 2026, as market participants awaited Nvidia’s report after the closing bell. Investors were also focussed on Friday’s remarks from Fed Chair Kevin Warsh. 

The Nasdaq Composite Index declined -0.08%, while the S&P 500 was nearly unchanged, closing -0.02% lower. The Dow Jones Industrial Average fell -0.21%, or 113.52 points.

Nvidia Q2 earnings. Nvidia posted another blowout quarter Wednesday evening. For once the stock actually behaved, closing up nearly four percent after hours, snapping a streak of muted or negative post-earnings reactions.

Revenue hit $96.221 billion, up 105.9% y/o/y and 18% sequentially, ahead of the $92.271 billion consensus estimate. EPS came in at $2.22, topping the $2.09 estimate. Data centre revenue reached $89 billion, 116.6% higher y/o/y and now 92.7% of total sales. The segment’s momentum was powered by the Blackwell Ultra ramp. Within Data Centre revenue, hyperscale contributed $48.710 billion, up 15.3% sequentially, while the AI-cloud, industrial and enterprise bucket made up the rest. Net income increased 109.2% y/o/y to $53.954 billion.

CEO Jensen Huang's declaration that ‘AI has reached its inflection point,’ paired with the note that ‘compute is revenue... and demand is accelerating,’ set the tone for the call. Q3 guidance of $108 billion, above the roughly $105 billion analysts expected, reinforced that message, even though it fell short of the most bullish sell-side calls near $110 billion.

Not everything was clean. Forward gross margin guidance of 74%, versus Street hopes above 75%, combined with supply commitments that more than doubled from $119 billion to $279 billion as Nvidia locked in memory capacity. Rising memory costs and supply tightness were flagged as the quarter's real headwind. China compute revenue remains guided at zero. Will Nvidia’s ‘beat and raise’ keep clearing an ever-higher bar on Q3? 

In corporate news, Meta Platforms announced yesterday that it has reached a settlement in a trial brought by 29 US state attorneys general over claims related to child social-media addiction. Although the company denied wrongdoing, its statement emphasised that teenagers would benefit from new industry standards, including strict required daily time limits, default usage blocks from midnight to 6 am, muted notifications during school hours and additional safeguards. 

Under the agreement, Meta will make total payments of up to $18 billion. Of this, $12.7 billion will be paid over the next decade and the remaining approximately $5.3 billion to be released only if YouTube and TikTok adopt similar measures and pay damages to the states. The company added that its Q3 guidance remains largely unchanged, though it expects to accrue an approximately $10 billion legal expense for the quarter.

Anthropic has agreed to spend $45 billion to lease AI cloud-computing capacity from Nscale’s flagship data center development in West Virginia. The agreement marks the latest step in Anthropic’s effort to secure the computing resources needed to support its expanding business ahead of a potential public offering.

Corporate Earnings Reports

Posted on Wednesday, 26 August from The Pulse, our real-time AI-driven news tool. Available exclusively on the EXANTE Web Platform

Nvidia reported strong fiscal Q2 2027 results on 26 August 2026 (after close): revenue was a record $96.22bn, beating the $92.38bn consensus, representing +105.9% y/y growth. Non-GAAP EPS came in at $2.22 vs $2.10 expected. Data Center revenue hit a record $89bn, up +117% y/y. For Q3, the company guided revenue to $108bn at the midpoint, exceeding the $104.2bn consensus, with non-GAAP gross margins guided to 74% ±50bps, down from 75% in Q2, due to 'extreme' memory pricing. Q2 gross margins were 75%, in line with expectations. CEO Jensen Huang said, "AI has reached its inflection point... Now, compute is revenue." The company expects ~70% revenue growth for FY28, which is a supply-constrained outlook. Nvidia also unveiled a new revenue-sharing structure for neocloud partners and expanded its partnership with AWS to deploy an additional 2 million GPUs through Q2 FY29.

European Stock Indices

CAC 40 +0.27%
DAX +0.08%
FTSE 100 -0.07%

Commodities

Gold spot -1.33% to $4,592.03 an ounce
Silver spot -0.49% to $68.10 an ounce
West Texas Intermediate +0.99% to $81.91 a barrel
Brent crude +0.55% to $87.46 a barrel

Gold prices extended their decline on Wednesday, pressured by a stronger US dollar.

Spot gold fell -1.33% to $4,592.03 per ounce, after reaching its highest level since 14 May on Tuesday.

The US dollar rose +0.22%, making dollar-denominated bullion more expensive for holders of other currencies.

Spot silver declined -0.49% to $68.10 per ounce.

WTI and Brent closed higher after two consecutive declines, rebounding from early-morning lows of $79.60 and $85.55 per barrel, respectively, their weakest levels since 10 August. The initial softness followed reports of potential progress in Pakistani-led talks, while Iran and Oman appeared closer to an agreement on managing safe navigation through the Strait of Hormuz.

Despite the early weakness, Brent crude futures settled up 48 cents, or +0.55%, at $87.46 per barrel, while WTI crude futures settled up 80 cents, or +0.99%, at $81.91 per barrel.

Both benchmarks began strengthening shortly before 9:00 EDT after Iranian sources said an agreement with Oman to manage the Strait of Hormuz had not been finalised, although some details had been resolved. The IRGC added that the US had not accepted the terms agreed by Iran and Oman, while officials reiterated that the strait would not reopen unless the US accepted all of Tehran’s conditions.

Diplomatic efforts also remained in focus. Qatari Prime Minister Sheikh Mohammed bin Abdulrahman al-Thani is expected to visit Tehran today to meet Iranian officials and discuss ways to de-escalate regional tensions, according to foreign ministry spokesperson Majed Al Ansari.

In the US, the DOE Weekly Petroleum Status Report showed crude inventories were roughly unchanged, while gasoline, distillate and jet fuel stocks drew by 2.54 million, 2.23 million, and 500,000 barrels, respectively. Refinery utilisation increased +0.2 percentage points to a more than seven-year high of 97.4% and has remained above 95% for a record 12 consecutive weeks. Gross refinery inputs reached a 27-month high. Jet fuel production held above 2.0 million bpd for a 17th consecutive week. Seasonally, distillate inventories are at their lowest level on record.

Supply risks tied to Russia’s war in Ukraine showed no sign of easing. Ukraine struck another Russian refinery overnight, NORSI, the country’s fourth-largest refinery and second-largest gasoline producer. Sources later said the facility had halted all crude processing.

Russia is also considering an escalation of ballistic missile strikes on Kyiv, including targets in the city centre, as well as infrastructure elsewhere in Ukraine, Bloomberg news reported Wednesday, citing three people close to the Kremlin. The move follows Moscow’s conclusion that efforts to negotiate a peace deal have reached a dead end.

Note: As of 4 pm EDT 26 August 2026

Currencies

EUR -0.17% to $1.1651
GBP -0.41% to $1.3589
Bitcoin +0.21% to $78,730.88
Ethereum +2.28% to $2,496.82

The US dollar advanced on Wednesday after a batch of US economic data, including an inflation reading, modestly increased expectations for a Fed rate hike ahead of this week’s Jackson Hole symposium of central bankers.

The dollar index rose +0.22% to 99.13, marking its largest daily gain since 6 August, while the euro fell -0.17% to $1.1651.

ECB board member Isabel Schnabel said interest rates must rise further as the conflict in the Middle East continues and the resilient eurozone economy poses upside risks to inflation.

Boston Fed President Susan Collins said Tuesday that the Fed will need to raise interest rates soon unless incoming data show a sustained decline in inflation, which remains too high and has become a pervasive concern for businesses and households.

The Japanese yen weakened -0.04% against the greenback to ¥159.27 per US dollar, while sterling fell -0.41% to $1.3589, its largest daily decline since 23 July.

Fixed Income

US 10-year Treasury +1.6 basis points to 4.650%
German 10-year Bund +3.2 basis points to 3.253%
UK 10-year Gilt +4.9 basis points to 5.039%

US Treasury yields rose on Wednesday after data showed annual inflation held steady in July, rather than easing as economists had expected.

According to the CME FedWatch tool, traders priced in a 36.5% probability of a September rate hike and 26 bps of rate increases by year-end.

The 2-year note yield, which typically moves in line with Fed funds rate expectations, rose +3.5 bps to 4.222%.

The yield on US 10-year notes increased +1.6 bps to 4.650%.

The 2s10s yield curve flattened to 42.8 bps, its flattest level since August 7.

The Treasury saw solid demand for a $70 billion sale of 5-year notes. The debt cleared at a high yield of 4.393%, close to where it had traded ahead of the auction. The 2.37x bid-to-cover ratio was the highest since November.

The US government also saw solid demand for a $69 billion sale of 2-year notes on Tuesday and is scheduled to auction $44 billion of 7-year notes today.

Eurozone bond yields moved higher on Wednesday.

Germany’s 10-year government bond yield rose +3.2 bps to 3.253%, after falling -4.9 bps in the previous session.

Germany’s 30-year yield increased +3.1 bps to 3.742%, after declining -4.4 bps on Tuesday.

Money markets last pointed to around 40 bps of additional tightening from the ECB by year-end, slightly lower than Tuesday’s pricing. The probability of a rate hike next month stood at 95%.

Germany’s 10-year yield reached a 15-year high of 3.275% last week, while the 30-year yield also climbed to a 15-year high of 3.787%.

Note: As of 4 pm EDT 26 August 2026

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