Global Markets Rally on Eased Hormuz Tensions, Canada Retaliates on Tariffs
26 August 2026 · Morning
Global markets saw a surge in risk appetite as President Trump announced the complete removal of mines from the Strait of Hormuz, easing geopolitical tensions.
This news sent WTI crude oil prices down 3.12% to $82.36 per barrel, contributing to a decline in global bond yields.
Despite weaker-than-expected US economic data, including a 10.5% drop in new home sales and a 7-month low in consumer confidence, major equity indices posted gains.
Meanwhile, Canada escalated trade disputes with the US by announcing $20 billion in retaliatory tariffs, and the ECB is poised for a September rate hike to address energy shock impacts.
Central bank actions dominated headlines today, with Hungary cutting rates for the third consecutive time while Japanese bond yields surged to multi-decade highs, attracting record inflows.
Global Markets
Detail
S&P 500
Closed at 7,677.28 on August 25.
+0.32%
Nasdaq
Closed at 26,151.29 on August 25.
+0.66%
STOXX 600
Closed at 656.49 on August 25.
+0.35%
Nikkei 225
Closed at 65,856.36 on August 25.
+0.50%
CSI 300
Closed at 4,552.03 on August 25.
-0.24%
KOSPI
Closed at 6,742.74 on August 25.
+0.68%
Hang Seng
Closed at 25,511.10 on August 25.
-0.02%
Dollar Index (DXY)
Closed at 98.92 on August 25.
-0.07%
USD/JPY
Closed at 159.20 on August 26.
+0.01%
EUR/USD
Closed at 1.17 on August 26.
-0.04%
USD/KRW
Closed at 1,380.00 on August 25.
-0.19%
USD/CNY
Closed at 6.72 on August 25.
-0.02%
US 10-year Treasury
Closed at 4.623% on August 25.
-7.7bp
US 2-year Treasury
Closed at 4.176% on August 25.
-6.2bp
Japan 10-year JGB
Closed at 2.894% on August 25.
+1.5bp
Germany 10-year Bund
Closed at 3.180% on August 25.
-7.6bp
Korea 10-year KTB
Closed at 4.342% on August 25.
+0.4bp
US High Yield Spread
Closed at 269bp on August 24.
-1.0bp
WTI Crude Oil
Closed at $82.36 per barrel on August 25.
-3.12%
Gold
Closed at 4,657.64 on August 25.
+0.15%
Copper
Closed at 6.71 on August 25.
+1.65%
VIX
Closed at 15.46 on August 25.
-2.40%
Canada Imposes $20 Billion Retaliatory Tariffs on US
Canada announced tariffs on 700 US products, effective September 8, matching the scale of new US duties.
$20B Tariffs
IMF: Global Economy Withstands Energy Shock, Fiscal Risks Emerge
IMF Managing Director Georgieva stated the global economy has weathered the Iran war energy shock better than expected, aided by oil reserve releases and non-Gulf energy supplies.
Fiscal Concerns
Global Markets Downplay Impact of New US Iran Sanctions
Markets showed limited reaction to the US Treasury Secretary's warning of further sanctions on countries trading with Iran, suggesting the news was largely priced in.
Limited Impact
Baltic Dry Index Rises to Two-Week High
The index climbed 1.5% to 2,926, its highest level since August 12, driven by recovering demand for iron ore and coal transport.
+1.5%
Australian Dollar Holds Upward Bias Amid RBA Focus
The Australian dollar maintained an upward bias with low volatility, as market attention remains on the Reserve Bank of Australia's monetary policy.
RBA Focus
United States
Trump Warns Iran on Hormuz Mines, Declares Demining CompleteDemining Complete
President Trump announced the complete removal of mines from international waters in the Strait of Hormuz and warned Iran of immediate destruction if new mines are planted.
The US Space Force is maintaining 24-hour surveillance of the strait to enforce a no-mining policy.
Oman's foreign ministry is expected to announce temporary corridors and safe navigation measures for Hormuz soon.
US New Single-Family Home Sales Plunge in July-10.5%
New single-family home sales fell 10.5% month-over-month to 607,000 units in July, marking the lowest level since January.
The median new home price dropped to $393,800, a four-year low, with high interest rates cited as a key deterrent to affordability.
Despite this, June metro area home prices rose 2.1% year-over-year, exceeding expectations but continuing a trend of slowing growth.
US Consumer Confidence Hits 7-Month Low in August89.4
The Conference Board Consumer Confidence Index dropped to 89.4 in August, its lowest level in seven months and below market expectations.
The index fell 0.8 points from July's 90.2, reflecting a deterioration in labor market outlook and persistent inflation concerns.
While the present situation index improved for the fourth consecutive month, declining forward-looking sentiment signals weaker demand ahead.
Jackson Hole Symposium to Address 'Fiscal Dominance' DebateFiscal Dominance
The upcoming Jackson Hole Symposium is expected to highlight the 'fiscal dominance' debate, where central banks face pressure to continue buying government bonds amid rising government borrowing costs.
This issue gains prominence as advanced economies face increasing borrowing expenses and heightened tensions in sovereign bond markets.
The debate questions the independence of central bank policy in an environment of growing public debt.
US-Canada Trade Dispute Escalates with Retaliatory TariffsTrade War
The trade conflict between the US and Canada intensified after bilateral negotiations failed on August 22, leading to immediate US tariffs and swift Canadian retaliation.
Canada announced $20 billion in retaliatory tariffs on US goods, effective September 8.
Automakers like Honda warned that new North American plant investments might be withheld if the USMCA trade agreement is not extended, increasing industry uncertainty.
Fed Internal Divisions Emerge on Rate Hike Decisions4 of 12 Banks
Signals of internal division within the Federal Reserve emerged, with four out of twelve regional banks voting for a rate hike before the July meeting.
The Federal Open Market Committee (FOMC) ultimately decided to maintain rates with a 9-3 vote, indicating at least a third of members saw a need for an increase.
Boston Fed President Collins also stated that a rate hike would be necessary soon if inflation remains high, adding to policy uncertainty.
US 10-Year Treasury Yields Fall on Oil Slide, Buyback Debate-6bps
The 10-year Treasury yield dropped 6 basis points to 4.641%, primarily driven by a 4% decline in oil prices.
Discussions around expanding the Treasury Secretary's bond buyback policy and signals of easing Iran sanctions also contributed to lower yields.
Strong demand for a $69 billion 2-year Treasury auction indicated robust market creditability.
US Dollar Weakens on Oil Decline, Iran SanctionsSlightly Weaker
The US dollar traded slightly weaker, pressured by falling oil prices and issues surrounding Iran sanctions.
Lower oil prices were a key factor in the dollar's depreciation.
Asian foreign exchange markets are closely watching the upcoming Jackson Hole speech by Fed Chair Warsh.
US Stock Market Rebounds Led by Tech SectorS&P +0.19%
The US stock market rebounded, with the S&P 500 rising 0.19% and the Nasdaq gaining 0.45%, primarily led by technology stocks.
Falling oil prices and bond yields helped boost equity prices.
However, Dick's Sporting Goods (DKS) saw a decline after lowering its annual earnings outlook.
Europe
ECB Poised for September Rate Hike, Signals Limited Further TighteningSept Hike Likely
The European Central Bank is widely expected to implement a second rate hike in September, following its first increase in nearly three years in June.
The move aims to curb the widespread economic impact of surging energy prices, particularly from the Iran conflict.
Despite Eurozone inflation around 3% and robust economic growth, policymakers are reportedly reluctant to signal further tightening beyond September.
Eurozone Bond Yields Retreat from 15-Year HighsGermany 10Y -3bps
Eurozone bond yields fell from multi-year highs, with Germany's 10-year yield, a benchmark for the region, dropping 3 basis points to 3.222%.
This retreat from last week's high of 3.275% was driven by weaker oil prices and market perception that US sanctions on Iran are preferable to military escalation.
The easing of risk aversion contributed to the decline in yields.
UK Consumer Inflation Expectations Jump in August12-mo: 3.9%
UK consumer inflation expectations surged in August, with the 12-month outlook rising to 3.9% from 3.4% in July, and long-term expectations reaching 4.1% from 3.7%, the highest since April.
Citi analysts described the anticipated rise in inflation over the coming months as a 'hawkish signal'.
The Bank of England is closely monitoring whether inflation expectations become entrenched.
Pound Holds Near 6-Month High on BoE Rate Hike Expectations$1.3632
The British Pound maintained its position near a six-month high, trading around $1.3632, supported by expectations of further Bank of England rate hikes.
The currency has shown resilience over the past four weeks despite concerns over government debt.
Analysts suggest the upward momentum might moderate towards the end of the year as policy expectations are priced in.
Belgium Business Confidence Worsens in August, Signals Eurozone Weakness-13.2
Belgium's business confidence index deteriorated to -13.2 in August from -11.9 in July, indicating weakening economic sentiment across the Eurozone.
All sectors experienced a decline, with manufacturing at -17.8, construction at -7.7, and retail trade at -5.2.
As a leading indicator for the Eurozone, the decline in Belgian business sentiment suggests broader economic softening.
EUR/NOK Recovers from 11-Week Low as Oil Prices Decline10.84 to 10.90
The Euro/Norwegian Krone exchange rate climbed from an 11-week low, rising from 10.84 to 10.90, primarily driven by weaker oil prices.
As a major oil-exporting nation, Norway's currency, the Krone, tends to weaken when crude oil prices fall.
This movement reflects the direct impact of commodity price fluctuations on currency valuations.
Euro Rebounds Against Swiss Franc from Multi-Year LowsPolicy Divergence
The Euro has rebounded against the Swiss Franc, moving away from multi-year lows, reflecting a divergence in monetary policies between the European Central Bank and the Swiss National Bank.
The ECB is actively raising interest rates to combat inflation, while the SNB has maintained its policy rate at 0%.
This policy divergence is a key factor driving the reversal in the Euro's weakening trend against the Swiss Franc, with the EUR/CHF exchange rate approaching a critical juncture for future direction.
UK Inflation ExpectationsRose in Aug
UK inflation expectations increased in August, according to a Citi/YouGov survey.
This rise follows a period of recent declines in expectations.
EUR/NOKOff 11-week low
The EUR/NOK currency pair moved off an 11-week low.
Lower oil prices contributed to this movement.
Belgian Business Confidence-13.2 (Aug)
Belgium's August business confidence index fell to -13.2.
This is a decline from -11.9 recorded in July.
Sterling (GBP)6-month high
Sterling is hovering near a six-month high.
Expectations for a Bank of England rate hike are underpinning the currency's strength.
Japan
Japanese Government Bonds (JGBs)Record Inflows
Global investors saw record inflows into Japanese Government Bonds (JGBs).
Japanese bond ETFs attracted a record $1.5 billion in net inflows this year.
The 10-year JGB yield rose 2.93% in August, reaching its highest level since the mid-1990s.
Honda (7267.T)New Plant Risk
Honda executives stated they might reconsider new plant construction in North America.
This is due to uncertainty surrounding the extension of the USMCA trade agreement.
Honda is currently operating at near full capacity in North America, necessitating new facilities.
Emerging Markets
Hungary Central Bank-25bp Rate Cut
Hungary's central bank cut its key interest rate by 25 basis points to 5.5%.
This marks the third consecutive monthly reduction, driven by a sharp drop in inflation.
Inflation is projected to remain below the 3% target through H2 2026 and 2027, returning to target in H1 2028.
Ukraine ConflictLosing War
Ukraine's ousted Defense Minister Mykhailo Fedorov warned in an exclusive interview that Ukraine is 'slowly losing the war'.
He indicated that months remain to prevent defeat, but corruption and lack of innovation are hindering military operations.
Russia-Ukraine ConflictPort Attacks
Russia's Defense Ministry claimed to have struck five vessels in Ukraine's Black Sea ports.
This included three cargo ships and one tanker in Pivdennyi port, and one cargo ship in Odesa port.
Port facilities and a fuel storage facility in Chornomorsk port were also reportedly hit.
South African Rand (ZAR)+0.4%
The South African rand strengthened by 0.4% to 15.9550 per dollar.
This occurred despite a three-month deterioration in South Africa's leading business cycle indicator.
A weaker dollar and rising commodity prices supported demand for emerging market assets.
EM EquitiesSlightly Up
Emerging market stocks saw slight gains, with currencies holding near recent highs.
Investors focused on US sanctions against Iran, AI stock volatility, and upcoming central bank meetings.
Asian semiconductor stocks are attracting buying interest ahead of Nvidia's earnings.
Sri Lanka Government BondsYields >10%
Sri Lanka's government bond auction saw yields exceeding 10% for both maturities offered.
The bond maturing in March 2035 yielded 11.70%, while the August 2030 bond yielded 10.54%.
China
China Solar Installations+27% YoY
China's new solar installations reached 14 GW in July, a 27% increase year-over-year.
This marks a monthly recovery from 12.48 GW installed in June.
Installations had slowed after a policy shift from fixed-price purchase to market-based pricing for new wind and solar projects.
India
RBI Foreign ExchangeNet Buy $561M
The Reserve Bank of India (RBI) net bought $561 million in foreign exchange in June.
This reverses net sales in April (-$890M) and May (-$600M).
The move signals a defense of the rupee's lower bound after it hit a record low in May.
India Economic OutlookResilient
RBI's monthly bulletin indicated strong industrial, services, and high-frequency indicators in July.
System liquidity also improved in July and August.
The RBI assessed the domestic economy as resilient to global headwinds, but noted ongoing geopolitical instability.
Indian Government BondsYields -2bp
Benchmark 6.94% 2036 bond yields fell 2 basis points.
State government bonds issued 20.1 billion rupees, showing strong demand with the lowest spread in months.
Air IndiaSeeks $1.5B
Air India is seeking $1.5 billion in equity investment from its owners, Tata Group and Singapore Airlines.
This request comes as the airline's accumulated losses worsen.
Further capital requirements are anticipated.
Latin America
Brazil Gasoline SubsidyExtended
Brazil's government will extend gasoline subsidies until September 9.
The subsidy provides 0.44 reais per liter.
Brazil Election & RatesPolicy Debate
Lula's camp proposes bond purchases to lower long-term interest rates, while Bolsonaro's camp favors spending cuts.
Real yields on 2045 government bonds are high at about 7.5%.
Investors demand a premium due to concerns over Brazil's fiscal health.
Brazil Tax Revenue+8.97% YoY
Federal tax revenue in July rose 8.97% year-over-year.
It reached 289.346 billion reais ($56.17 billion), the highest July figure since 1995.
Cumulative tax revenue for January-July increased by 6.98%.
Brazil Consumer Confidence84.7 (Aug)
Brazil's consumer confidence index weakened to 84.7 in August.
This is a 3.6-point decline from 88.3 in July.
Brazil Fertilizer IndustrySeeks 2B Reais
Brazil's fertilizer industry is seeking 2 billion reais ($389 million) in subsidies for three months.
This is due to sulfur supply disruptions caused by the Iran war.
About 60% of global sulfur trade passes through the Strait of Hormuz.
Mexican Peso (MXN)Strong
The Mexican peso is performing strongly among EM currencies, near a two-year high.
This strength is hurting export profitability, as over 80% of Mexico's exports go to the US.
Mexico Current AccountSurplus $8.9B
Mexico's Q2 current account reversed from a -$18.23 billion deficit in Q1 to an $8.9 billion surplus.
This represents 1.65% of GDP.
Mexico EquitiesWeak
Mexican stocks retreated.
This was influenced by weak commodity prices and expanded US sanctions on Iran.
Top Gainers
Detail
Moderna (MRNA)
Healthcare sector, $63B market cap.
+14.36%
Super Micro Computer (SMCI)
Information Technology sector, $25B market cap.
+9.35%
Robinhood Markets (HOOD)
Financials sector, $101B market cap.
+8.17%
CDW (CDW)
Information Technology sector, $18B market cap.
+7.23%
Lumentum Holdings (LITE)
Information Technology sector, $79B market cap.
+6.67%
Reddit (RDDT)
Communication Services sector, $31B market cap.
+6.39%
Interactive Brokers Group (IBKR)
Financials sector, $167B market cap.
+5.52%
Cadence Design Systems (CDNS)
Information Technology sector, $91B market cap.
+5.06%
Advanced Micro Devices (AMD)
Information Technology sector, $782B market cap.
+4.91%
Marvell Technology (MRVL)
Information Technology sector, $211B market cap.
+4.84%
Companies
NVIDIA (NVDA)+2.19%
Anticipated to debut its new Rubin chip ahead of tomorrow's earnings report.
Concerns emerged over a potential $105 billion guarantee for OpenAI's data center lease, raising questions about AI spending sustainability.
Analysts forecast Q3 revenue growth between +82% and +97.2%, with Raymond James raising its target price from $330 to $352.
Advanced Micro Devices (AMD)+4.91%
Raymond James upgraded its rating to Strong Buy and increased its target price from $565 to $641.
The stock rose +3.5% following the analyst upgrade.
Apple (AAPL)-0.14%
Unveiled new Mac mini and Mac Studio models featuring the company's first 2-nanometer M6 chip.
The M5 Ultra chip, combining four dies, significantly enhances AI computing performance for on-device autonomous AI agents.
Cisco Systems (CSCO)+0.80%
Expanded its 'Secure AI Factory' rack-scale AI infrastructure with NVIDIA and officially launched Cloud Control in the US.
Will supply compute solutions integrating NVIDIA technology into Supermicro data center servers starting October 2026.
Marvell Technology (MRVL)+4.84%
Rosenblatt Securities raised its target price from $240 to $300, while Susquehanna increased its target from $230 to $265.
SanDisk (SNDK)-0.83%
Mizuho Securities lowered its target price from $1,900 to $1,875.
Micron Technology (MU)+2.48%
Mizuho Securities adjusted its target price downwards from $1,375 to $1,300.
Lam Research (LRCX)+1.45%
Mizuho Securities reduced its target price from $370 to $365.
Applied Materials (AMAT)-0.86%
Mizuho Securities lowered its target price from $650 to $590.
Meta Platforms (META)+1.97%
Instagram head Adam Mosseri testified in a 29-state lawsuit alleging Meta designed its platforms to be addictive for youth.
The company is also preparing to launch its AI agent platform 'Hatch' in the coming weeks.
Alphabet (GOOGL)-0.32%
Waymo, its autonomous driving subsidiary, began testing in Munich with a goal of commercial ride-hailing by late 2027.
Google Cloud expanded its Gemini Enterprise AI platform to the legal and financial services sectors.
SpaceX (SPCX)+2.19%
Announced plans for a fourth Starship launch site, 'Starbase, Louisiana,' with construction slated for 2027.
The self-sufficient facility will include propellant production and deepwater shipping capabilities.
Abbott (ABT)-0.46%
Received FDA approval for 'Libre Duo 10 Day,' the world's first wearable to continuously monitor both glucose and ketone levels.
The device is intended for diabetic patients aged two and older, with a US launch expected in late 2026.
Johnson & Johnson (JNJ)FDA Approved
Its drug 'Imaavy' received FDA approval as the first treatment for warm autoimmune hemolytic anemia (WAIHA) in patients aged 12 and older.
Moderna (MRNA)+14.36%
Interim clinical results for its co-developed cancer vaccine with Merck showed reduced melanoma recurrence risk when combined with Keytruda.
Barclays significantly raised its target price for Moderna from $48 to $125 following the positive trial data.
Merck (MRK)+3.84%
Its personalized cancer vaccine, co-developed with Moderna, demonstrated efficacy in interim trials for reducing recurrence risk in melanoma patients.
Argus Research increased its target price from $145 to $170 based on the clinical success.
Boeing (BA)$131.2B
Awarded a substantial $131.2 billion defense contract from the US Department of Defense for the F-15 Eagle Crest program over an 11-year period.
Exxon Mobil (XOM)-2.08%
Operations at its Liza Unity production facility in Guyana resumed after a minor fire, with local authorities initiating an investigation.
JPMorgan (JPM)$15B
Is leading financing efforts, potentially up to $15 billion, for an Argentine LNG project alongside Santander.
Eased collateral requirements for stock-backed loans for employees and early investors of listed companies.
Goldman Sachs (GS)+2.18%
Its Private Credit subsidiary announced a tender offer to repurchase approximately 5% (18.7 million shares) of its outstanding shares, closing by September 22, 2026.
IREN (IREN)+6.03%
Scheduled to release its H1 earnings (ending June 30) on August 27, with analysts forecasting a 24% revenue decline.
Newmont (NEM)+2.50%
Raymond James raised its target price for the mining company from $131 to $140.