Daily News 31st Aug 26
Daily News
Asia Slides as Kospi Sinks 3.5%; Wall Street on Track for Fifth Straight Monthly Gain; Warsh's Hawkish Jackson Hole Remarks Rattle Markets; Gold Falls Below $4,450, Oil Tops $85 on Iran Escalation
31 August 2026
Today in Brief
Asian markets fell sharply Monday, with South Korea's Kospi down 3.5% and Japan's Nikkei 225 off 2.16%, even as Wall Street headed into month-end on pace for its fifth straight monthly advance, with the S&P 500 and Nasdaq up 3% and 4% in August, respectively. The S&P 500 slipped 0.25% Friday to 7,711.76 after Fed Chair Kevin Warsh struck a hawkish tone on inflation at Jackson Hole, still notching a 0.5% weekly gain; fed funds futures now price a 60.4% chance of a September rate hike, up from roughly 56% on Friday. Gold fell below $4,450 an ounce on Monday on the hawkish repricing, while crude oil climbed above $85 per barrel after the US military struck Iranian rocket launchers near the Strait of Hormuz and President Trump threatened to destroy Iran's Kharg Island oil terminal.
In other news: China's factory activity contracted for a second straight month in August, though less than expected; Treasury Secretary Scott Bessent said Washington plans to sanction another bank this week over Iran transactions; India's Jio Platforms secured regulatory approval for what could be the country's largest-ever IPO; OpenAI said it will cut off Cursor's access to its models following the coding startup's acquisition by Elon Musk's SpaceX; BYD shares slid nearly 5% in Hong Kong after fierce domestic competition squeezed first-half profit margins; and Boeing and its largest white-collar union, SPEEA, are set to resume stalled contract talks Monday after members rejected the company's latest offer.
In Asia, markets fell with South Korea's benchmark Kospi down 3.5%
In Asia, markets fell with South Korea's benchmark Kospi down 3.5%. Japan's Nikkei 225 fell 2.16%. Hong Kong's Hang Seng Index dropped 0.88%, while the mainland China's CSI 300 slid 0.61%. Australia's S&P/ASX 200 bucked the wider trend, up 0.12%. Wall Street is about to wrap up a month of gains, led by the tech sector. The Dow is up 2.1% in August, on pace for its fifth consecutive monthly advance. The S&P 500 and Nasdaq Composite were headed for their first one-month increases since May, up 3% and 4%, respectively. Both the S&P 500 and Dow also reached all-time highs earlier in August.
S&P 500 falls Friday after Fed's Warsh highlights inflation worries, but index posts positive week
The S&P 500 fell on Friday, but still notched a winning week, after Federal Reserve Chairman Kevin Warsh conveyed some worry over current inflation trends. The broad market index lost 0.25% and closed at 7,711.76, while the Nasdaq Composite slid 0.52% to 26,402.42, weighed down by losses in semiconductor stocks such as Nvidia and Intel. The Dow Jones Industrial Average was down 9.45 points, or 0.02%, and ended at 53,559.99. The S&P 500 advanced 0.5% on the week, while the Nasdaq gained 0.9%. The Dow climbed 0.5% in the period for its first winning week in three. In his remarks at the central bank's annual symposium in Jackson Hole, Wyoming, Warsh said, "While this summer's PCE and CPI readings were better than expected, they do not tell me that underlying trends have meaningfully improved."
Gold fell below $4,450 an ounce on Monday, extending a sharp drop in the previous session
Gold fell below $4,450 an ounce on Monday, extending a sharp drop in the previous session as hawkish remarks from Federal Reserve Chair Kevin Warsh revived expectations for an imminent interest rate hike. In his Jackson Hole address on Friday, Warsh warned that inflation is not easing significantly and reaffirmed the central bank's commitment to bringing inflation back to its 2% target, while noting that financial conditions are not currently restrictive. Markets are now pricing in around a 57% chance of a 25-basis-point Fed rate hike in September, up sharply from roughly 40% a week earlier. Gold also remained pressured by rising oil prices after the US military targeted Iranian rocket launchers preparing to deploy mines into the Strait of Hormuz, marking the first such attack in more than a month.
Crude oil climbed above $85 per barrel on Monday, starting the week higher
Crude oil climbed above $85 per barrel on Monday, starting the week higher after the US military targeted Iranian rocket launchers preparing to deploy mines into the Strait of Hormuz, marking the first such attack in more than a month. US forces also said they are closely monitoring the waterway and remain prepared to safeguard the free flow of commerce. The US last launched missiles at Iranian targets in late July but has since shifted its focus toward squeezing the country's economy through sanctions to push Tehran back to the negotiating table. An Iranian official said Friday that resuming diplomacy with the US "isn't impossible" following constructive discussions with Qatar, a mediator in the conflict.
Trump threatens to blow up Iran's Kharg Island oil hub as hostilities escalate once again
U.S. President Donald Trump extended his military threats against Iran to Kharg Island, the country's main oil export terminal, saying it's "going to be blown to smithereens!" The comments came after the U.S. and Iran traded attacks over the weekend, as hostilities flared anew between the two countries. American forces struck two Iranian rocket launchers on Larak Island on Sunday after the military said Revolutionary Guard forces were preparing rockets carrying sea mines for launch into the Strait of Hormuz, U.S. Central Command confirmed to MS NOW. "Earlier today U.S. forces struck two Iranian launchers on Larak Island. Islamic Revolutionary Guard Corps forces were observed preparing to launch rockets with sea mines into the Strait of Hormuz," Navy Capt. Tim Hawkins, a U.S. Central Command spokesperson, said in a statement.
China's factory activity shrinks for second straight month, contracting less than expected
China's manufacturing activity in August shrank for a second straight month, though by less than market estimates, keeping the pressure on Beijing to support the economy as growth loses momentum. The official purchasing managers' index reading came in at 49.8, compared with 49.2 in July, National Bureau of Statistics data showed Monday, better than Reuters-polled economists' forecast of 49.6. China's economy has come under mounting strain, with growth slowing to 4.3% in the second quarter, the weakest pace since late 2022, as soft domestic demand and a prolonged property slump continue to weigh on activity.
Warsh's speech sends hike chances higher, may put Fed `at odds' with Treasury
Federal Reserve Chair Kevin Warsh's stance in his speech at the Jackson Hole meeting was unexpectedly hawkish, boosting market expectations for a rate hike next month. Gold fell and Asian stocks declined on Monday. Traders of fed funds futures see a 60.4% chance of a quarter-point hike in September, up from around 56% on Friday, according to the CME's FedWatch tool. "Chair Warsh's Jackson Hole address surprised us in its specificity about the economy and outlook and with its lean in a decidedly hawkish direction," Deutsche Bank said. The firm continues to expect the Fed to hike 50 basis points this year, with increases at the September and December Federal Open Market Committee meetings.
U.S. plans to sanction another bank in effort to clamp down on Iran transactions: Bessent
President Donald Trump's administration plans to impose sanctions on another bank this week as it intensified efforts to economically isolate Iran, U.S. Treasury Secretary Scott Bessent told The Associated Press on Sunday. "This is going to be financial violence if we have to," Bessent said in the interview. "We are showing people that we know who you are, you know who you are, and this has got to stop." Bessent spoke with the AP ahead of Group of 20 meetings in Asheville, North Carolina, where he will meet individually with his counterparts from the world's major and developing economies to encourage cooperation against Iran. The Trump administration recently signaled that it would shift from military strikes to economic pressure during a war that recently reached the six-month mark, promising what it called an "economic D-Day" against a country that has already weathered decades of punishing sanctions.
Meta- and Google-backed Indian telecom operator Jio Platforms gets regulatory nod for IPO
Jio Platforms, India's biggest telecom operator and digital service provider, has secured regulatory approval to launch its public issue, paving the way for what could be the country's largest initial public offering. Jio Platforms is estimated to raise around 377 billion rupees ($3.9 billion) through the IPO, as per market intelligence firm Prime Database, exceeding the $3.3 billion issue of Korean carmaker Hyundai Motors in 2024. Indian billionaire Mukesh Ambani's flagship company, Reliance Industries, owns more than 66% stake in Jio Platforms, followed by Meta Platforms' affiliate Jaadhu Holdings that owns nearly 10% and Google International, which owns 7.7%, as per LSEG data. Neither Meta nor Google will sell their stake in the company, according to the IPO papers.
OpenAI to end model access to Cursor after acquisition by Elon Musk's SpaceX
OpenAI announced late Friday that it is ending developers' access to its models on Cursor, following the acquisition of the AI coding startup by Elon Musk's SpaceX earlier this month. Cursor CEO Michael Truell said, in a post on the SpaceX-owned social network X Friday night: "OpenAI models serve about 5% of Cursor user traffic, and we're speaking with the OpenAI team to resolve this. Cursor was one of the very first users of OpenAI, we've worked closely with their team for years, and we've trusted their platform to be neutral infrastructure for our business." In their announcement, OpenAI said, "We are making this choice because we cannot be confident that SpaceX will use our technology within our terms of service, based on our experience with Elon Musk's companies violating contracts."
BYD shares slide as fierce China competition dents first-half earnings
Shares of Chinese electric-vehicle giant BYD fell nearly 5% in Hong Kong on Monday, following the release of its interim results on Friday. BYD's second-quarter net profit stood at 8.2 billion yuan ($1.2 billion), up 30% from a year earlier, while revenue fell 3% year on year to 194.6 billion yuan, according to Citi following the release of the automaker's results. For the first half, BYD reported revenue of 344.8 billion yuan, down 7.1% from a year earlier, while net profit attributable for the company's shareholders fell 20.5% to 12.3 billion yuan, according to the company. BYD said China's auto industry faced "sluggish domestic demand and robust export growth" in the first half, while fierce competition and rising costs for commodities, raw materials and chips squeezed automakers' profit margins.
Boeing, union negotiators to meet Monday to resume stalled contract negotiations
Negotiators from Boeing and its largest white-collar union plan to meet Monday to resume contract discussions, a spokesman for the Society of Professional Engineering Employees Association (SPEEA) said. SPEEA's roughly 17,000 members overwhelmingly rejected Boeing's contract offer last week. Union members, which include engineers and technical workers, said in a survey by SPEEA this week that they want larger and immediate guaranteed wage increases from Boeing. The second priority, according to survey results shared by SPEEA, is more money for annual performance-based raises. Better annual cost-of-living adjustments were the third-highest priority, according to the nearly 13,000 union members who took the survey.
