Daily News 21st Aug 26
Daily News
Dow Tumbles 700 Points as Treasury's Yield-Taming Plan Falters; Gold Tops $4,500 on Safe-Haven Demand; Crude Above $86 as Trump Preps Iran “Economic D-Day”; Alibaba Profit Plunges 75%
21 August 2026
Today in Brief
Asia-Pacific markets were mixed, with Japan's Nikkei 225 falling 0.39% and the Topix flat, while the Kospi reversed early losses to rise 0.80% even as the small-cap Kosdaq declined 4.73%; Australia's S&P/ASX 200 slipped 0.31%, Hong Kong's Hang Seng added 0.72%, and mainland China's CSI 300 gained 0.52%. U.S. stocks fell sharply Thursday as long-dated Treasury yields resumed their climb despite the Treasury Department's extraordinary debt buyback operation: the Dow shed 703.84 points, or 1.32%, to 52,759.21, weighed down by a 9% drop in Walmart shares, while the S&P 500 lost 0.87% to 7,641.16 and the Nasdaq dropped 1% to 26,067.17. Gold traded above $4,500 an ounce on Friday, on course for a third consecutive weekly gain, while crude oil held above $86 per barrel, up nearly 6% on the week, as the US-Iran conflict showed no signs of abating.
In other news: Vice President JD Vance called economic pressure on Iran “a delicate dance” as Washington prepares details of an “economic D-Day” initiative against Tehran; Treasury Secretary Scott Bessent said there's a “very good chance” the U.S. budget deficit has peaked, even as government debt hit a record above $40 trillion; economists cautioned that Taiwan's AI-fuelled forecast of 11% GDP growth is unlikely to be sustainable; Japan's headline inflation hit 1.9% in July, its highest this year, as energy costs rose amid the Iran war; Alibaba shares fell after quarterly net profit plunged 75% on accelerated AI spending; a teenage plaintiff dropped her closely watched lawsuit against Meta, Google and Snap ahead of trial; Broadcom is in talks to raise more than $60 billion in debt for an AI chip financing deal benefiting Anthropic and others; and Nvidia denied a report that it plans to ship a China-specific AI chip by year-end.
In Asia, Japan's Nikkei 225 fell 0.39% while the Topix was flat
In Asia, Japan's Nikkei 225 fell 0.39% while the Topix was flat. The Kospi reversed early losses to rise 0.80%, while the small-cap Kosdaq declined 4.73%. Australia's benchmark S&P/ASX 200 was 0.31% lower. Hong Kong's Hang Seng index was up 0.72%, while mainland China's CSI 300 gained 0.52%. Thursday's losses came as long-dated U.S. Treasury yields resumed their march higher, after efforts by the government to stem the recent bond market rout failed to ease investor fears about inflation.
Dow tumbles 700 points, S&P 500 falls as Treasury plan to subdue yields fails
U.S. stocks fell as Treasury yields continued their march higher despite the Treasury Department's extraordinary debt buyback operation, raising concerns that higher borrowing costs will throw a wrench into the bull market. The Dow Jones Industrial Average shed 703.84 points, or 1.32%, weighed down by a 9% drop in Walmart shares. The 30-stock index closed at 52,759.21. The S&P 500 lost 0.87% and closed at 7,641.16, while the Nasdaq Composite dropped 1% to 26,067.17. Bond yields advanced on Thursday, with the yield on the 10-year Treasury note climbing back above the level it was at just before the Treasury Department said Wednesday morning that it will at least double repurchases of 10-, 20- and 30-year debt in the next few months.
Gold traded above $4,500 an ounce on Friday and was on course for a third consecutive weekly gain
Gold traded above $4,500 an ounce on Friday and was on course for a third consecutive weekly gain, as investors turned to safe-haven metals amid heightened volatility across currency and bond markets, while rising oil prices continued to underscore inflationary risks. The precious metal jumped more than 4% on Wednesday after the US Treasury Department announced plans to at least double its long-term debt buybacks in an effort to contain borrowing costs, driving Treasury yields and the dollar sharply lower. Gold held on to those gains even after Treasury yields reversed Wednesday's decline amid concerns that the government's efforts to rein in long-term borrowing costs may provide only a temporary solution.
Crude oil traded above $86 per barrel on Friday and was on track to post a second consecutive weekly gain
Crude oil traded above $86 per barrel on Friday and was on track to post a second consecutive weekly gain, rising nearly 6% so far this week. The gains came as the US-Iran conflict showed no signs of abating, with the two sides locked in a dispute over the Strait of Hormuz. The US is moving to isolate Iran's economy in what President Donald Trump described as an "economic D-day," with details of the initiative expected on Monday. The proposed measures are likely designed to cut Tehran off from international financial and commercial channels, including banks, businesses, shipping registries, cash transfers and smuggling networks. Washington aims to increase economic pressure on Iran and push Tehran toward negotiations over the conflict, its nuclear programme and control of Hormuz.
‘A delicate dance’: JD Vance says economic pressure is the best way to achieve Washington's objectives in Iran
Economic pressure is the United States' “most effective tool” against Iran, according to U.S. Vice President JD Vance. Speaking on a podcast, Vance said that the move was “a delicate dance” as both sides apply pressure to each other, but added that “what has been true over the last couple of weeks is they felt a lot more pressure than we have.” His comments come after U.S. President Donald Trump said the U.S. will launch what he called the “most crushing economic operation ever taken against any country” against Iran. Trump also threatened severe financial penalties on any nation that helps Tehran evade sanctions, and added that “this will be Economic Warfare and Isolation on an unprecedented scale.”
Bessent says there's a ‘very good chance’ U.S. budget deficit under Trump has peaked
Treasury Secretary Scott Bessent said Thursday there's a “very good chance” that the U.S. budget deficit under President Donald Trump has likely peaked. “We are going to be laser focused,” Bessent told CNBC's Sara Eisen in an exclusive interview a day after his department's extraordinary debt buyback announcement. The monthly U.S. budget deficit topped $432 billion in July, its highest level in more than half of a decade, the Treasury Department said last week. That monthly report showed the gap for the fiscal year to date climbed to almost $1.8 trillion, above where it was at the same point a year earlier. The Treasury Department announced this week that the U.S. government debt pile to fund those deficits hit a new record above $40 trillion. The total has more than doubled over the last decade, exacerbating concerns about the country's financial health.
Taiwan's AI-fuelled forecast of 11% GDP growth likely not sustainable, economists say
The Taiwanese government's double-digit GDP forecast growth in 2026 may reflect optimism in the artificial-intelligence economy, but growth is likely to moderate over time given risks of capex slowdown and macroeconomic downturns, and with its high concentration in the semiconductor industry. Earlier this month, Taiwan's statistics agency said it expects its GDP growth to be at 11.05% for the year, up from 9.64% forecast it issued in May. Taiwan's weighted stock index has seen a growth of over 56% year-to-date, supported by AI demand for its tech industry.
Japan headline inflation rate hits highest this year as energy prices bite
Japan's headline inflation rate hit 1.9% in July, the highest level this year, as energy costs increase amid the Iran war. Core inflation — which strips out prices of fresh food but includes energy — was in line with expectations, coming in at 1.8%. Energy prices rose for the first time since November 2025 despite government subsidies, due to high oil costs from the conflict in the Middle East. That showed up in wholesale inflation, which came in at 7.2% for July, with electricity charges being the largest contributor. Fresh food prices also saw a sharp spike, increasing 7% compared to a 3.9% rise in June. Analysts have previously told CNBC that the relatively low consumer inflation is due to subsidies handed out by Prime Minister Sanae Takaichi's administration as it attempts to shield consumers from higher energy prices.
Alibaba shares fall after 75% profit plunge as AI spending weighs on earnings
Alibaba shares fell about 3% on Friday after the company reported a 75% drop in quarterly net profit, with investors focusing on the cost of its accelerated AI investment even as cloud growth strengthened sharply. Shares fell to around HK$125, underperforming the broader Hang Seng Index, which was up about 0.7%, as the earnings highlighted a widening gap between Alibaba's rapidly growing AI business and the near-term pressure that investment is putting on group profitability and cash flow. Net income attributable to ordinary shareholders fell 76% to RMB10.54 billion from RMB43.12 billion a year earlier, missing the BofA Securities consensus of RMB22.6 billion by about 53%. Non-GAAP net income fell 38% to RMB20.72 billion, also below the RMB25.6 billion consensus.
US teen drops lawsuit against Meta, Google and Snap ahead of trial
A teen girl whose lawsuit was a test case in litigation accusing social media companies of deliberately addicting young people and fuelling a mental health crisis dropped her claims against the owners of Instagram, Facebook, YouTube and Snapchat on Thursday, according to a court filing. The plaintiff, a 15-year-old girl from New Jersey identified in California court records as P. M-Y., had alleged the platforms' owners — Meta Platforms, Google and Snap Inc — contributed to her social media addiction, depression and self-harm. The companies said she dropped her claims without any payment. TikTok, which was also a defendant in her case, had previously settled her claims. Emily Jeffcott, an attorney for P.M-Y., said in a statement her client chose to dismiss the remainder of her claims out of a desire to resume her life.
Broadcom seeks more than $60 billion in latest AI debt deal
Broadcom is in talks with a group of lenders to raise more than $60 billion in debt for an AI chip financing deal that will benefit Anthropic and other companies, Bloomberg News reported on Thursday, citing people familiar with the matter. The financing could include a roughly $30 billion junior debt tranche, and Broadcom would guarantee part of the senior-secured tranche possibly ranging from about $60 billion to $70 billion, the report said. The numbers under discussion would potentially bring the total raise to as much as $100 billion, according to the report. Blackstone and Apollo Global Management are in talks with Broadcom to participate in the financing, following a partnership the three companies struck in June, the report added.
Nvidia denies report it is rolling out China AI chip by year-end
Nvidia on Thursday denied a report by The Information that it plans to begin shipping a language processing unit (LPU) tailored for Chinese customers by year-end, saying it has no China-specific version of the product on its roadmap. "The reporting in The Information on Nvidia's LPU is incorrect. We have no LPU sales in the China market today, and no China-specific LPU product in our roadmap," an Nvidia spokesperson said. Reuters had reported in March that Nvidia was preparing a China-compatible version of AI chips, as it sought to compete in the fast-growing market for AI inference. Earlier on Thursday, The Information reported, citing two Nvidia employees, that the company planned to begin small-batch shipments of an artificial intelligence chip designed for Chinese customers by the end of the year and that several customers had already placed orders.
