Reading · RiskReversal Recap

Last week was largely defined by the bond market. Rising long-term yields pressured equities early in the week, prompting a surprise intervention from the Treasury Department aimed at easing stress in the long end of the curve. The initial move lower in yields didn’t last long, and much of that decline was retraced by week’s end. The 10YY finished near 4.74% while the 30YY ended 5.28%, both near their highest levels of 2026. The SPX lost roughly -1.4% on the week.

There were even more significant moves elsewhere including gold and bitcoin moving to multi-month highs as the dollar weakened. Volatility, however, remained remarkably subdued into monthly option expiration.

That backdrop now gives way to an important week of potential market catalysts that includes both Nvidia earnings and the Jackson Hole symposium.

Nvidia customers notified about AI-related price hikes above 15% (Bloomberg)

Some of Nvidia’s opens new tab largest customers have been told prices of servers ‌containing its AI chips will rise by more than 15% in many cases with memory chip costs soaring.

U.S. Economy Could Feel the Sting From Trade War With Canada (NYT)

A tit-for-tat trade fight between the two allies could create new headaches for consumers and businesses already stung by high prices.

Last week’s expiration-related effects are largely gone, meaning the market may be more responsive to macro headlines and earnings surprises than it has been over the past two weeks. One key question remains whether the volatility that has been showing up in rates, the dollar, gold, and bitcoin spills over more aggressively into the broader indices.

SPX/SPY: 1.3% (7575-7775)
NDX/QQQ: 1.8%
RUT/IWM: 1.5%
SMH: 4.1%
TLT: 1.2%
USO: 4.7%

Jackson Hole begins Thursday and runs through the weekend. This year’s carries added significance as it’s Kevin Warsh’s first appearance as Fed Chair, but more importantly there will likely be focus on the recent surge in long-term yields and whether policymakers view those higher rates as doing some of the Fed’s tightening for them. The Treasury Dept’s intervention has also introduced a new dynamic between fiscal and monetary policy.

PCE is likely the most important economic release of the week.

Tuesday

8:15 AM - ADP Employment Change, Prev: 9.5
9:00 AM - Housing Price Index (MoM), Exp: 0.2%, Prev: 0.3%
10:00 AM - Consumer Confidence
10:00 AM - New Home Sales Change (MoM), Prev: 1.6%

Wednesday

8:30 AM - Core PCE (MoM), Exp: 0.2%, Prev: 0.1%
8:30 AM - Core PCE (YoY), Exp: 3.3%, Prev: 3.3%
8:30 AM - Durable Goods Orders, Exp: 0.7%, Prev: 0.3%
8:30 AM - GDP Annualized, Exp: 1.5%, Prev: 1.5%
8:30 AM - GDP, Prev: 6.3%

Thursday

8:30 AM - Initial Jobless Claims, Exp: 209, Prev: 206
Jackson Hole Symposium

Friday

10:00 AM - Fed’s Chair Warsh speech
10:00 AM - Michigan Consumer Sentiment, Exp: 51, Prev: 51
10:00 AM - Nonfarm Payrolls Benchmark Revision

Nvidia reports Wednesday after the close in what could be a market moving event, not necessarily right away but it sometimes sets the tone for the next few weeks of trading.

Tue, Aug 25