Daily Summary: Modest declines ahead of Jackson Hole and Nvidia

USA

• The US stock market is starting the week with a moderate decline. Most Wall Street indices are down around 0.3 to 0.5%, the declines are most pronounced in the US100, where losses are reaching ~0,8%.
• Many investors are still focused on the Treasury Secretary’s intervention in the debt market. The precise implications are still difficult to assess, but one of the key questions is whether this intervention is a one-off or the beginning of a new policy of managing debt yields.
• Despite the potentially major implications of such a (possible) policy shift, the market is still awaiting highly important releases from Nvidia and the Jackson Hole speech. After these events, the market may be expected to move into a more clearly defined trend.
• For US and Canadian investors, the complete failure of “trade” negotiations also matters. The US is set to maintain current tariffs and introduce additional ones. Ottawa is preparing another round of its own retaliatory tariffs. The most important consequence of Donald Trump’s antagonistic policy toward Canada, in the context of international trade, is the steadily diminishing value of the USMCA agreement, which underpins trade across North America. It is worth noting that USMCA was personally championed by Trump.
• A moderately positive signal is coming from the Persian Gulf, despite the lack of success in negotiations between Iran and the US. According to the Energy Secretary, the volume of oil exports through the strait could be much larger, potentially twice as large, as publicly available data suggests. The trend of releasing supply from the region is also supported by Iran’s recent decision to allow a number of Iraqi-owned tankers to pass.

Company news, USA

• Nucor (NUE.US): The steel producer and distributor gains about 4%, following Canada’s retaliatory tariffs imposed on the US.
• Alibaba (BABA.US): The US-listed Chinese company falls about 2% after a share issuance worth roughly USD 10 billion.
• PDD Holdings: The operator of the Temu platform gains more than 2% at the open after reporting better-than-expected results. Transaction fees, up 13%, stand out.
• Applied Optoelectronics (AAOI.US): The photonics company plunges as much as 16% after a regulatory filing indicating it is preparing a USD 600 million share offering.
• RegenxBio (RGNX.US): The pharmaceutical company drops as much as 25% after the FDA halted further trials of the gene therapy “RGX-121,” intended to treat so-called Hunter syndrome.
• ArcelorMittal (MT.US): The steel mill operator and metallurgical products distributor gains about 2% after a positive recommendation from an investment firm.
• Samsung Electronics (SMSN.UK): The company announced the largest shareholder return program in its history, worth up to KRW 110 trillion (about USD 65 to 70 billion). Despite this, the stock falls about 8%.
• IBM (IBM.US): The company unveiled a new processor for future Z and LinuxONE systems that can simultaneously support IBM-architecture and Arm-based solutions. The chip is built on a 2 nm process and is designed to run both traditional IBM software and Arm applications.

Europe

• Monday’s session in Europe is clearly mixed, with a relative balance between demand and supply, although post-close futures pricing points to a slight edge for optimism. The top performer is Spain’s SPA35, up as much as 0.7%.
• The biggest pressure on European assets remains concern over energy prices and the availability of gas from the Persian Gulf.
• ECB’s Piero Cipollone said he currently does not see stagflation risks in the euro area, and that inflation is far from being dangerous.
• French Finance Minister Lescure announced he will not propose new taxes to address the rising budget deficit.

Company news, Europe

• Hermes (RMS.FR): European luxury companies are seeing early signs of stabilization and a rebound in demand in China, driven mainly by the wealthiest consumers. Stocks in the sector rise more than 1%.
• The energy sector in Europe is performing poorly, mainly due to a moderate decline in oil prices. Losses in this segment reach around 2 to 3%.
• SSAB (SSABA.SE): Shares of the European steel producer rise after the collapse of tariff-policy talks between the US and Canada. A Morgan Stanley publication on ArcelorMittal further supports sentiment around metals.
• Stellantis (STLAM.IT): The automaker’s shares are under pressure. The failed negotiations between the US and Canada imply further problems for the segment with exposure to North America.
• Shell (SHELL.NL): The company continues its strategy of selling off unprofitable assets. The sale of its US chemicals business is attracting attention from, among others, ExxonMobil and Apollo Asset Management. Preliminary bids value the assets at up to USD 8 billion, a significant discount versus prior investment outlays.

FOREX

• In the FX market, today’s session shows relative strength in the US dollar. The USD rises against the CAD, CHF, and JPY in the 0.2 to 0.4% range, mainly as a result of threats and announcements tied to the lack of an agreement with Canada.

Commodities

• Among agricultural commodities, strong gains are visible in coffee. Coffee futures rise about 5%, driven by reports of weak harvests in Brazil.
• In energy markets, oil is giving back part of its gains. Brent falls 2% to USD 90 per barrel. European gas, however, is rising, up 3% in today’s session. This move is most likely the result of the large gap between the ability to ship the commodity out of the Persian Gulf under conditions of a blocked Strait of Hormuz.
• Precious metals are slowing their advances. Today’s session is still positive for gold and silver, but price gains are limited to below 1%.

Crypto

• The cryptocurrency market is giving back a significant portion of gains after the recent rally driven by fiscal uncertainty, though the declines are clearly concentrated in smaller tokens.
  • Bitcoin rises another 1% and moves above USD 78,000.
  • Ethereum is almost unchanged at USD 2,460.
  • Solana is also largely unchanged, ending the session around USD 95.