Global Markets React to Iran Sanctions and Hawkish Fed Signals
24 August 2026 · Morning
US Treasury Secretary Bessent announced "the toughest sanctions in history" against Iran, with details expected Monday.
This geopolitical tension, coupled with robust US economic data and hawkish Fed comments, pushed oil prices and Treasury yields higher.
WTI crude jumped 2.89% to $86.83, while the US 10-year Treasury yield rose 6.7 basis points to 4.708%.
Major US indices closed lower, with the S&P 500 down 0.87% and the Nasdaq falling 1.00%, partly due to weak retail earnings.
Global markets grappled with persistent inflation concerns and rising oil prices, leading to a decline in equities.
Global Markets
Detail
S&P 500
Closed at 7,641.16 on August 20.
-0.87%
Nasdaq
Closed at 26,067.16 on August 20.
-1.00%
STOXX 600
Closed at 650.36 on August 20.
-0.12%
Nikkei 225
Closed at 66,216.57 on August 20.
+1.36%
CSI 300
Closed at 4,592.75 on August 20.
+0.09%
KOSPI
Closed at 6,852.58 on August 20.
+5.89%
Hang Seng
Closed at 25,698.49 on August 20.
+0.80%
Dollar Index (DXY)
Closed at 98.88 on August 20.
+0.11%
USD/JPY
Closed at 159.05 on August 21.
+0.01%
EUR/USD
Closed at 1.17 on August 21.
-0.01%
USD/KRW
Closed at 1,394.05 on August 20.
+0.47%
USD/CNY
Closed at 6.72 on August 20.
-0.10%
US 10-Year
Yield rose 6.7 basis points on August 20.
4.708%
US 2-Year
Yield rose 2.8 basis points on August 20.
4.190%
Japan 10-Year
Yield fell 3.4 basis points on August 20.
2.863%
Germany 10-Year
Yield fell 0.3 basis points on August 20.
3.255%
Korea 10-Year
Yield fell 7.9 basis points on August 20.
4.334%
US HY Spread
Narrowed by 2.0 basis points on August 19.
273bp
WTI
Closed at $86.83 per barrel on August 20.
+2.89%
Gold
Closed at 4,518.45 on August 20.
-0.08%
Copper
Closed at 6.47 on August 20.
-0.42%
VIX
Closed at 16.02 on August 20.
+7.66%
Global Dollar Weakness Deepens
The dollar index traded near a three-month low, primarily due to weakening long-term yield advantages.
3-Month Low
Rising Yields & Fed Policy Signals
Rising long-term yields were identified as a global issue, potentially blunting the Federal Reserve's policy signals.
Global Issue
AI Productivity Gains May Not Curb Inflation
The IMF's new Chief Economist, Tenreyro, questioned the notion that higher productivity automatically leads to lower inflation, citing Bank of England staff research.
IMF Warning
Global Equities Decline, Oil Prices Strengthen
Global stock markets continued to decline as investors questioned the sustainability of policy, despite expanded US Treasury bond purchases.
Oil Stronger
Canadian Dollar Near 3-Month High
The Canadian dollar traded near its highest level since May 21 at 1.3790/USD, supported by rising oil prices and a weaker US dollar.
CAD 1.3790/USD
Canada July Producer Prices Rebound
Canada's industrial product prices rose 0.6% month-over-month in July, recovering from a 1.4% decline in the previous month, driven by energy and precious metals.
PPI +0.6% MoM
Swiss Franc Strengthens
The Swiss Franc (CHF) was the top-performing G10 currency after a Treasury announcement, driven by the unwinding of funding carry trade positions.
G10 Top Performer
United States
US Announces Toughest Sanctions on IranNew Sanctions
US Treasury Secretary Bessent announced "the toughest sanctions in history" against Iran, with details to be revealed Monday.
The goal is regime collapse through a "dual measure of naval blockade and the strongest sanctions ever."
China and other major trading partners were urged to cooperate, following President Trump's warnings of economic penalties.
US long-term Treasury yields continued to rise, with the 10-year yield closing at 4.708%, up 6.7 basis points.
This occurred despite the Treasury reconfirming plans to increase bond buybacks, indicating persistent inflation and debt concerns.
The US national debt surpassed $40 trillion for the first time, exacerbating structural fiscal pressures.
Strong Philadelphia Fed Index47.4 vs 25.0
The Philadelphia Fed's August business outlook index surged to 47.4, significantly exceeding the 25.0 forecast.
This strong economic data, combined with hawkish remarks from Fed officials, sustained market expectations for a potential September rate hike.
San Francisco Fed President Daly stated that the Fed is "missing its inflation goal by quite a bit," justifying further tightening.
US Equities Decline on Weak Retail EarningsS&P 500 -0.87%
US equity markets declined across the board, with the S&P 500 falling 0.87% and the Nasdaq down 1.00%.
Weak quarterly same-store sales reported by Walmart (WMT) added to concerns about a slowdown in consumer spending.
The Dow Jones Industrial Average led the losses among the major indices.
Asia
India Allows Duty-Free Sugar Imports1M Tons
India authorized duty-free imports of 1 million tons of sugar to stabilize prices that surged 40% in two months.
This marks India's first sugar import in a decade, aiming to ease consumer burden ahead of the festive season.
India is the world's largest consumer of sugar.
RBI Hawkish Minutes Lead to Bond Sell-Off10Y +5bp
The Reserve Bank of India's hawkish monetary policy committee minutes led to a sell-off in Indian bonds.
The benchmark 10-year bond yield rose 5 basis points to 6.8709%, reaching a two-month high amid inflation risks and concerns over oil and food prices.
The bond curve flattened as short-term yields rose and long-term yields fell.
Indian Shares Rebound, Rupee StrengthensNifty 50 +0.64%
Indian shares rebounded, with the Nifty 50 gaining 0.64% and the BSE Sensex up 0.82%, snapping recent losing streaks.
The Indian Rupee strengthened slightly to 95.7050 per USD, with volatility limited by central bank intervention.
This recovery was in line with global stock market stabilization and a steadier US bond market.
India Eases Rupee Export Payment RulesRupee Internationalization
India eased rules for rupee export payments, allowing export contracts, invoices, and settlements to be treated equally in rupees and foreign currencies.
This move aims to promote the internationalization of the rupee by removing barriers to rupee transactions with countries outside the Asian Clearing Union.
The government is also considering low-cost loans for renewable energy projects that incurred losses due to transmission constraints.
Latin America
Banxico Signals Prolonged Rate PauseRates at 6.5%
Mexico's central bank (Banxico) signaled a prolonged pause in interest rates at 6.5%, according to minutes from its August meeting.
While headline inflation is easing (3.10% in early July), services inflation remains persistent, slowing the overall decline more than anticipated.
Upside risks to inflation include Middle East conflict, trade uncertainty, and a strengthening El Niño phenomenon.
Brazil to Maintain Fiscal RulesGDP 2% Effort
Brazil's Finance Minister Dario Durigan pledged to maintain fiscal rules and spending restraint if the Lula government is re-elected in October.
The current administration has made a fiscal effort equivalent to 2% of GDP and plans to continue similar efforts if re-elected.
Latin America Growth Muted Through 20272026 GDP 2.2%
The UN Economic Commission for Latin America and the Caribbean (ECLAC) forecasts muted economic growth for the region through 2027, despite stable inflation.
GDP growth for 2026 is projected at 2.2% (down from 2.4%), with 2027 at 2.5%, reflecting a five-year streak of weak growth due to worsening international conditions.
Latin American currencies slipped and stocks were mixed as US long-term bond yields continued to climb, despite US Treasury liquidity support measures.
The MSCI Latin America stock index fell 0.2%, and the regional currency index was down 0.3%, as inflation concerns clouded the economic outlook.
Mexico Economy Grows 2.7% in July+2.7% YoY
Mexico's economy grew by 2.7% year-over-year in July, according to preliminary data.
The central bank of Mexico hinted at a pause in interest rate hikes amid inflation concerns.
Argentina June Economic Activity Rises+2.7% YoY
Argentina's economic activity increased by 2.7% in June year-over-year, rebounding from 0.4% and surpassing market expectations of 1.9%.
Growth was led by fishing and mineral extraction, with 12 out of 15 tracked sectors showing an increase.
Argentina Logs $2.12 Billion Trade Surplus+$2.12 Billion
Argentina recorded a trade surplus of $2.12 billion in July, with exports at $8.85 billion and imports at $6.74 billion.
This surplus exceeded market expectations of $1.85 billion by $270 million.
Emerging Markets
Romania Destroys Marine Drone in Black SeaDrone Shot Down
Romania's Defense Minister Radu Miruta announced that an F-16 fighter jet shot down a marine drone near the Neptun Deep gas project in the Black Sea.
The Neptun Deep project, set to begin operations in 2027, is expected to make Romania the EU's largest gas producer.
As a NATO member sharing a 614 km land border with Ukraine, Romania faces increasing threats from drones and mines targeting Black Sea energy infrastructure.
Bangladesh Elects New PresidentNew President
Bangladesh's parliament elected Mirza Fakhrul Islam Alamgir, a veteran leader of the Bangladesh Nationalist Party (BNP), as the new president.
The BNP transitioned from an opposition party to the ruling party during recent political changes.
Poland Plans Corporate Tax Hike for Energy Firms30% Tax Rate
Poland's government plans to impose a 30% corporate tax on large utility and fuel companies with annual revenues over €50 million starting in 2027, up from the current 19%.
The tax rate is planned to gradually return to 19% by 2030, aiming to support the energy industry and strengthen national defense, pending parliamentary and presidential approval.
Lebanon Bank Restructuring Law PassedIMF Welcomes
Lebanon's parliament passed amendments to the bank restructuring law, now awaiting presidential signature.
The Higher Financial Supervisory Commission's powers are expanded to directly decide on bank restructuring or liquidation, with ongoing discussions with the IMF on depositor bailout laws.
Egypt Remittances Reach Record High$47.3 Billion
Remittances from Egyptian workers abroad reached a record $47.3 billion in the 2025/26 fiscal year, a 29.6% increase from $36.5 billion in the previous year.
This surge signals an improvement in foreign exchange liquidity for Egypt.
Czech Economic Growth Forecast Downgraded2026 GDP 1.9%
The Czech Finance Ministry lowered its 2026 growth forecast to 1.9% from 2.1%, while maintaining the 2027 forecast at 2.4%.
Uncertainty from Middle East conflicts and rising commodity prices are expected to dampen domestic demand, with the 2026 general government deficit projected to worsen to -2.7% of GDP from -2.6%.
Russia-Ukraine Military Conflict Escalates16 Dead in Kyiv
Russian forces launched a large-scale air assault on Kyiv, killing 16 and injuring over 40, hitting civilian buildings, schools, and hospitals; Zelenskyy cited a lack of air defense missiles.
Internal political tensions in Ukraine, including a dismissed defense minister calling for wartime elections amid corruption claims, and a Ukrainian drone confirmed in Latvian airspace, raise concerns of conflict expansion.
Poland Monetary Policy Tightening PressureRates Held 3.75%
Monetary Policy Council (MPC) member Tyrowicz proposed a 1.0 percentage point interest rate hike at the July meeting.
The central bank's benchmark rate was held at 3.75% for the fourth consecutive month due to opposition from other members, indicating internal pressure for tighter monetary policy.
North Korea Launches Over 10 Ballistic Missiles10+ Missiles
North Korea launched over 10 ballistic missiles yesterday afternoon during the final stages of US-South Korea joint military exercises, prompting an emergency security meeting by the South Korean presidential office.
Japan's Ministry of Defense confirmed missiles fell outside its exclusive economic zone, reversing diplomatic efforts by the Trump administration.
Malaysia PM Orders Sovereign Wealth Fund ProbeGovernance Issues
Prime Minister Anwar ordered a comprehensive investigation into alleged governance violations at Xeraya Capital, a biotechnology investment subsidiary of sovereign wealth fund Khazanah Nasional.
The probe includes past transactions and highlights governance issues within the investment sector.
Ethiopia Central Bank Allots FX$500 Million
Ethiopia's central bank allotted $500 million in a special foreign exchange auction.
This measure aims to manage foreign exchange liquidity.
Markets & Commodities
US 30-Year Yield Resumes AscentYields Rising
The US 30-year Treasury yield resumed its ascent, rising to 5.225-5.2214% after briefly touching 5.1765%.
This occurred despite the Treasury doubling its bond purchase volume, indicating that investor confidence has not been fully restored.
Yields remain near their highest levels since 2007, with market participants questioning the sustainability of policy interventions.
Europe
Italy's Monte dei Paschi (MPS) Counter-Bid€36 Billion
MPS's board approved CEO's plan to pursue bids for Banco BPM and Banca Generali, countering Intesa's €36 billion takeover proposal.
Intesa's original plan to split MPS was criticized by Italy's Prime Minister, signaling a restructuring phase in the Italian financial sector.
Eurozone Bond Yields StabilizeUS Treasury Move
Eurozone government bond yields stabilized following the US Treasury's announcement of expanded liquidity support for long-term bonds.
The US Treasury aims to calm rising long-term rates by maintaining current levels of coupon and floating-rate note issuance for several quarters.
British Pound Hits 6-Month HighGBP $1.3661
The British Pound (GBP/USD) reached a six-month high of $1.3661 yesterday, its highest since February 16.
This gain was driven by the deepening dollar weakness following the US Treasury's bond liquidity measures.
UK GDP Estimates Revised Up+0.5% in 2024
The UK statistics office revised up its GDP growth estimates for 2023 and 2024, with 2024 now 0.5% higher than previously forecast.
These revisions reflect improved measurements in the service sector and real estate rental income.
Key UK Economic Data DueRetail Sales -0.5% est.
Upcoming UK economic indicators include July retail sales, expected to be -0.5% month-over-month, and August preliminary PMIs.
Preliminary PMI estimates for August are 51.8 for services and 51.5 for manufacturing.
UK Factory Orders Reach Highest Since 2024CBI Survey
The Confederation of British Industry (CBI) factory order survey indicated that UK factory orders achieved their best performance since November 2024.
Europe STOXX 600 Slips on Inflation Fears-0.12%
The European STOXX 600 index closed down 0.12% at 650.35 points yesterday, primarily due to persistent inflation concerns driven by stronger oil prices.
German producer prices (PPI) recorded their highest increase in three years, though US Treasury liquidity measures helped limit further losses.
Switzerland-China FTA Finalized99.8% Duty-Free
Switzerland and China finalized an updated free trade agreement, significantly improving Swiss export access to the Chinese market.
Under the revised deal, 99.8% of Swiss exports will enter China duty-free, up from approximately 50% under the previous 2014 FTA.
China
China's Rare Earth Exports to US RiseYttrium Increase
China's customs data showed an increase in yttrium rare earth exports to the US in July, signaling potential easing of supply constraints for the aerospace industry.
Yttrium is crucial for manufacturing aircraft, satellites, and electronics in the US aerospace and defense sectors, with China supplying over 60% of global rare earths.
China Urges South Korea on US-China StanceStrategic Autonomy
Chinese Foreign Minister Wang Yi urged South Korea to pursue strategic autonomy and avoid taking sides between the US and China during a meeting with South Korean diplomatic representatives.
Wang also called for a shift in US policy towards North Korea, identifying Washington's 'hostile policy' as the main cause of tensions on the Korean Peninsula.
Top Gainers
Detail
Nordson (NDSN)
Industrial company Nordson saw its shares rise significantly.
+8.00%
Coinbase Global (COIN)
The cryptocurrency exchange platform experienced a notable increase.
+7.58%
Deere (DE)
Agricultural and construction machinery manufacturer's stock climbed.
+6.94%
Lumentum Holdings (LITE)
The optical and photonic products company recorded a strong gain.
+6.24%
Qunity Electronics (Q)
Shares of Qunity Electronics showed a solid performance.
+5.93%
Marvell Technology (MRVL)
The semiconductor company's stock advanced amid AI chip news.
+5.79%
CF Industries (CF)
Fertilizer and chemical manufacturer's shares moved higher.
+5.61%
Mosaic (MOS)
Another materials company, Mosaic, saw its stock increase.
+5.04%
Cboe Global Markets (CBOE)
The global exchange operator's stock posted gains.
+4.76%
Alexandria Real Estate Equities (ARE)
The real estate investment trust's shares rose.
+4.73%
Information Technology
Broadcom (AVGO)+0.43%
Broadcom is reportedly pursuing over $60 billion in debt financing to fund its AI-related ventures, potentially raising up to $10 billion.
This large-scale debt issuance is expected to alter its financial structure and support various AI companies, including Anthropic.
Micron Technology (MU)+3.97%
Micron announced plans to establish an AI memory research lab in Boise, Idaho, investing $10 billion over the next decade.
This initiative is part of a broader commitment to invest over $250 billion in the US and create more than 90,000 jobs, strengthening its position in the rapidly expanding AI infrastructure market.
Marvell Technology (MRVL)+5.79%
Marvell reportedly secured a $12 billion AI chip supply contract with Google, a move that could significantly boost its revenue.
This partnership is seen as a major step for Marvell in the custom chip development space, though reaching a $1 trillion market cap remains a long-term goal.
Nvidia (NVDA)-0.33%
Nvidia plans to ship small quantities of AI chips designed for Chinese customers by year-end, which are already on order.
These chips are a variant of Nvidia's language processing unit (LPU), licensed from Groq, and are intended to accelerate AI chatbot responses while complying with US export regulations.
Palo Alto Networks (PANW)-2.84%
Palo Alto Networks formed a strategic alliance with NTT Data, aiming for $1 billion in joint business revenue by 2029.
The collaboration focuses on accelerating secure AI transformation for enterprises.
AMD (AMD)
AMD appointed Tim Ryan to its board of directors and named KC McClure as the chair of its Audit and Finance Committee, reorganizing its governance structure.
Health Care
Abbott (ABT)-0.25%
Abbott reached a $670 million settlement to resolve approximately 2,000 claims in lawsuits related to its specialized infant formula for premature babies.
This agreement includes the Gill case, where a jury found Abbott's formula caused necrotizing enterocolitis (NEC) in an Illinois infant, but about 1,700 related lawsuits involving 12,700 infants are still pending.
Merck (MRK)-2.11%
Merck and Moderna's co-developed personalized mRNA melanoma vaccine demonstrated significant efficacy in late-stage clinical trials, boosting expectations for Merck's oncology pipeline.
Eli Lilly (LLY)
Eli Lilly entered into a co-development agreement with Amplitude Therapeutics for mRNA vaccines targeting infectious diseases, securing exclusive commercialization rights and additional target options.
Consumer Staples
Walmart (WMT)-9.15%
Walmart reported Q2 adjusted EPS of $0.81 and revenue of $187.9 billion, both exceeding consensus estimates.
However, its US comparable sales (excluding fuel) grew only +2.6%, significantly missing the +3.8% consensus and marking the lowest growth in six years, leading to a premarket stock drop of 5-8%.
The company's Q2 results included a one-time benefit from tariff refunds, but its Health & Wellness segment was negatively impacted by the Inflation Reduction Act's drug price cap policies.
Walmart also issued annual revenue guidance of +4-5%, below the +5.3% consensus, and provided a Q3 guidance lower than market expectations, citing consumer spending cutbacks due to higher gas prices.
Consumer Discretionary
Amazon (AMZN)-2.16%
Amazon's Prime Video announced plans to invest over $2 billion in Latin American original content between 2027 and 2030, aiming to more than double its local productions.
The company also intends to expand its drone delivery service to 500 US locations by year-end.
Amazon is among nine tech companies facing a lawsuit in Chicago federal court for alleged violations of Illinois' Biometric Information Privacy Act (BIPA), accused of using thousands of hours of voice data for AI training without consent.
Communication Services
Meta Platforms (META)-0.04%
Meta has reportedly emerged as a major AI client for Microsoft.
The company is facing a child safety lawsuit across 29 states, where a former engineer testified about management's negligence regarding safety policies.
Meta is also involved in a BIPA lawsuit concerning the collection of voice data for AI training without user consent.
Alphabet (GOOGL)-1.17%
Google launched Antigravity, a new management feature for Gemini Enterprise app subscribers, which includes administrative and spending management capabilities.
Alphabet is also a buyer in Marvell's $12 billion AI chip contract.
SpaceX (xAI)
SpaceX's AI venture, xAI, launched Grok 4.6 on Amazon Bedrock.
Reports also indicate that xAI attempted to acquire the AI coding startup Cognition.
Industrials
Boeing (BA)-3.20%
The US State Department approved a $4.5 billion sale of KC-46A aerial refueling aircraft to Qatar, with Boeing as the prime contractor.
GE Vernova (GEV)-2.17%
Exane BNP Paribas Securities lowered its price target for GE Vernova from $1190 to $1090.
Financials
JPMorgan (JPM)
India's securities regulator suspended local trading for a JPMorgan affiliate due to alleged manipulation of closing prices.
Berkshire Hathaway (BRK.A/B)
An appeals court upheld a major settlement in a real estate commission collusion case involving Berkshire Hathaway's home services unit.
Energy
ExxonMobil (XOM)+0.84%
The fifth floating production storage and offloading (FPSO) vessel, Erea Wittu, for the ExxonMobil-led consortium arrived in Guyanese waters.
Built by Japan's MODEC, this facility will be deployed in the Uaru project of the Stabroek offshore oil block, with a daily oil processing capacity of 250,000 barrels.
Utilities
NextEra Energy (NEE)
The Governor of Maine publicly opposed NextEra Energy's proposed acquisition of Dominion Energy, citing concerns about restricted competition and potential rate increases for consumers.