Wall Street Slips As Powell-led Momentum Wanes

Central Bank

Stocks

Summary:

Wall Street's main indexes dipped on Monday, retreating from gains made in the previous session after U.S. Federal Reserve Chair Jerome Powell hinted that an interest-rate cut could be considered at next month's central bank meeting.

Recent economic data suggesting labor market weakness has boosted investor confidence that the central bank could switch to a dovish stance in September, despite a majority of policymakers warning that U.S. tariffs could add to inflationary pressures in the coming months.

The Personal Consumption Expenditures Price index - the Fed's preferred inflation gauge - is due to be released on Friday, while official nonfarm payrolls data is expected next week. The reports will be crucial, especially after Powell said a dovish verdict was not a certainty.

"The most important report between now and September is not the inflation numbers, rather the jobs report," said Thomas Hayes, chairman at Great Hill Capital, New York.

"As long as we show continued cracks in the labor market, the cut in September will happen, barring some egregiously high inflation numbers."

Powell's comments nudged major brokerages to revise their expectations, with Barclays, BNP Paribas and Deutsche Bank currently seeing a 25-basis-point reduction in borrowing costs next month.

Traders now see a 79.6% chance of a Fed rate cut in September, according to data compiled by LSEG.

At 09:56 a.m. ET, the Dow Jones Industrial Average (.DJI), opens new tab fell 117.50 points, or 0.26%, to 45,514.24, the S&P 500 (.SPX), opens new tab lost 13.20 points, or 0.20%, to 6,453.71, and the Nasdaq Composite (.IXIC), opens new tab lost 40.29 points, or 0.18%, to 21,457.09.

Friday's optimism helped the blue-chip Dow close at a record high for the first time since December 2024 and the benchmark S&P 500 log its strongest daily gain since May.

On Monday, Jefferies became the latest brokerage to raise its year-end target for the S&P 500, at a time when companies have tempered tariff-related forecasts.

Ten of the 11 S&P 500 sub-sectors edged lower, with consumer discretionary (.SPLRCD), opens new tab leading losses with a 0.5% drop.

Traders are awaiting AI darling Nvidia's (NVDA.O), opens new tab earnings on Wednesday to see if its $4 trillion valuation is justified.

The potential impact on Nvidia's forecasts from its recent revenue-sharing deal with the U.S. government will be closely watched. The chip major's shares were flat in early trading.

In deals-related moves, beverage company Keurig Dr Pepper (KDP.O), opens new tab slid 8% after saying it would buy JDE Peet's (JDEP.AS), opens new tab for $18.4 billion in cash.

Furniture retailers RH (RH.N), opens new tab and Wayfair (W.N), opens new tab declined about 7% each after U.S. President Donald Trump said on Friday his administration would conduct a tariff investigation on furniture imports.

Intel (INTC.O), opens new tab dipped after Trump said the U.S. government was taking a stake in the chipmaker, which the company said could limit its international sales and future government grants.

Trump also said that he would make more deals similar to the one with Intel.

Remarks from New York Fed President John Williams, later in the day will be scrutinized to see if he shares Powell's policy outlook.

Declining issues outnumbered advancers by a 1.72-to-1 ratio on the NYSE and by a 1.75-to-1 ratio on the Nasdaq.

The S&P 500 posted seven new 52-week highs and no new lows, while the Nasdaq Composite recorded 59 new highs and 13 new lows.

Source: Reuters

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Adam

Stocks

Euphoria over the September prospect of a U.S. interest rate cut petered out on Monday, sending U.S. share futures lower during pre-market trading as investors refocused on the broader economic picture.

S&P 500 inched 0.2% lower and Nasdaq futures fell 0.3% pointing towards a lower Wall Street open, as of 1258 BST.

Powell's dovish change of course has prompted futures to price in an 84% chance of a quarter-point rate cut in September, and at least 100 basis points of easing to 3.25-3.5% by the middle of next year.

MSCI's broadest index of world shares rose 0.1% and held near Friday's record highs, while in Asia Chinese blue chips closed up over 2% at their highest level since 2022 and Japan's Nikkei shut 0.4% higher.

The pan-European STOXX 600 index was also 0.2% lower, dragged down by Europe's renewable stocks after the U.S. government ordered Denmark's Orsted to halt construction of an offshore wind project near Rhode Island.

The move, deepening woes for the industry and putting Orsted's plans to raise capital at risk, sent the company's share price down around a record 17%.

London markets were closed for a holiday, thinning overall trading volumes in Europe.

Shares in Amsterdam-listed JDE Peet's meanwhile surged roughly 17% after Keurig Dr Pepper agreed a deal to buy the company for 15.7 billion euros ($18.36 billion), a 20% premium to Friday's closing price.

The European Central Bank is expected to hold rates unchanged in September, sources told Reuters at the weekend. Discussions about further cuts may resume in the autumn if the economy weakens.

"As an investor, you lose an enemy whenever the Federal Reserve pivots because it gives valuations room to become ever more expensive," said Florian Ielpo, Lombard Odier Investment Managers' head of multi-assets.

But looking at inventory data for manufacturers, wholesalers and retailers, Lombard Odier's Ielpo said that while manufacturers had stocked up amid tariff announcements, retailers held little inventory further down the economic food chain.

Companies returning to replenish items from now will discover the true costs of U.S. tariffs, which will likely turn up in third-quarter results, said Ielpo.

Switzerland soon hopes to finalise a new business offer for Washington to ease its tariff burden, which will likely include more defence spending and greater access for U.S. energy interests, two people familiar with the matter said.

Switzerland was stunned when U.S. President Donald Trump this month hit it with 39% tariff rates, some of the highest worldwide.

The Swiss franc crept up 0.1% against a basket of currencies. In broader currency markets, the dollar gained around 0.3% to 147.31 yen after falling 1% on Friday. The euro lost 0.2% to $1.1705 , having bounced from a trough of $1.1583 on Friday.

The dollar ticked higher , , flattering the outlook for corporate earnings, although increased rate-cut bets also imply policymakers now see more danger of a downturn in employment and the economy.

Euro zone bond yields rose, reversing their fall from late Friday as traders reassessed that Fed-driven move and its impact on Europe.

U.S. cash treasuries did not trade in London on Monday due to the bank holiday.

Market optimism will be tested by a reading on U.S. personal consumption prices on Friday that is expected to show core inflation creeping up to its highest since late 2023 at 2.9%.

Any upside surprise to inflation would also challenge the rally in longer-dated Treasuries, especially given that a whopping $183 billion in new debt is being sold this week.

The influential head of the New York Fed, John Williams, is due to speak later on Monday, and markets will be keen to hear whether he shares Powell's outlook on policy.

NVIDIA WATCH

Focus is turning to Nvidia's results on Wednesday, when it is forecast to announce a 48% rise in earnings per share on revenue of $45.9 billion for its second fiscal quarter.

Analysts will be keen to hear more on the outlook for shipments to China and details of the deal with President Donald Trump to pay the U.S. government 15% of the revenue from sales of some advanced chips in the Asian giant.

Trump said on Friday the U.S. would also purchase a 9.9% stake in Intel for $8.9 billion, or $20.47 per share, which represents a discount of about $4 from Intel's closing share price of $24.80.

Gold steadied as the dollar strengthened, and was last slightly lower at $3,368 an ounce after jumping 1% late last week.

Oil prices were further supported by the lack of progress on talks between Russia and Ukraine, which keeps sanctions on Russian supplies.

Brent rose 43 cents to $68.16 a barrel, while U.S. crude added 25 cents to $64.13 per barrel.

Source: reuters

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Michelle

Economic

Forex

Major brokerages, including Barclays, BNP Paribas and Deutsche Bank, now expect a 25-basis-point U.S. Federal Reserve rate cut in September following Chair Jerome Powell's shift in tone at Jackson Hole toward rising risks in the labor market.

Powell's remarks at the Jackson Hole symposium emphasized a change in the Fed's reaction function, with greater weight now placed on labor market risks."This unusual situation suggests that downside risks to employment are rising," Powell said, warning that such risks could materialize quickly in the form of layoffs and a spike in unemployment.In notes released on Friday after Powell's speech, Barclays pulled forward its previously expected September 2026 cut to September 2025, saying his speech introduced "an easing bias" and raised the bar for not cutting.

"Powell made (it) clear that the Fed intends to deliver a 'fine-tuning' rate cut in September unless the data dictates otherwise," wrote BNP economists, led by Calvin Tse. They reversed the brokerage's long-standing call for the Fed to stay on hold, forecasting cuts in both September and December.

Meanwhile, both Macquarie and Deutsche Bank revised their expectations of a cut in September and December, respectively, to a 25-bp cut each in those two months.Bank of America, which expects no rate cuts this year, said "barring further deterioration of the labor market, we think that the Fed would risk a policy error if it were to cut rates," and pointed to signs of a rebound in economic activity and persistent inflation pressures.

Morgan Stanley also does not expect a September cut yet, but said such a move is likely if incoming labor and inflation data confirm further softening.

Markets are now pricing in an 87% chance of a quarter-point rate cut at the September policy meeting, according to the CME FedWatch Tool, up from 75% before Powell's speech.

The rate-setting Federal Open Market Committee (FOMC) is scheduled to meet again on September 16 and 17.

Goldman Sachs and J.P. Morgan, meanwhile, reaffirmed their expectations for a September cut, aligning with the broader market view that softening data may warrant policy easing.

Source: Kitco

To stay updated on all economic events of today, please check out our Economic calendar

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Warren Takunda

Cryptocurrency

Key takeaways:

Bitcoin price is down 11% from its all-time high, dropping to $111,000 on Monday.

$108,000 is a short-term target for the bears, with some BTC analysts predicting a drop to $95,000.

Bitcoin sellers emerged again on Monday as the drop to $111,000 resulted in a large liquidation of leveraged long positions across the cryptocurrency market. Bitcoin Late Longs Wiped Out as Sub-$110K BTC Price Calls Grow Louder_1

Bitcoin Late Longs Wiped Out as Sub-$110K BTC Price Calls Grow Louder_1

BTC/USD daily chart. Source: Cointelegraph/TradingView

Bitcoin tumbles below $112,000, wiping out longs

Bitcoin price fell as low as $111,300 on Monday, reversing Friday’s spike fueled by Fed Chair Jerome Powell’s dovish speech, as a whale sold into the rally.

This extended the drop from the Aug. 14 all-time high of $124,500 to 11% and was accompanied by massive liquidations across the derivatives market.

Over $642.4 million in long positions were liquidated, with Bitcoin accounting for $235.5 million. Ether followed with $155 million in long liquidations.

Across the board, a total of $806.95 million was wiped out of the market in short and long positions, as shown in the figure below. Bitcoin Late Longs Wiped Out as Sub-$110K BTC Price Calls Grow Louder_2

Bitcoin Late Longs Wiped Out as Sub-$110K BTC Price Calls Grow Louder_2

Crypto liquidations (screenshot). Source: CoinGlass

The Bitcoin liquidation heatmap showed buy orders in the $110,500-$109,700 range in the weekly time frame. More bid orders were building down to $108,000 as shown in the chart below. Bitcoin Late Longs Wiped Out as Sub-$110K BTC Price Calls Grow Louder_3

Bitcoin Late Longs Wiped Out as Sub-$110K BTC Price Calls Grow Louder_3

BTC/USDT liquidation heatmap. Source: CoinGlass

How low can Bitcoin price go?

BTC swept lows below $112,000, leaving traders questioning how low the price could go.

“Bitcoin is still murdering leveraged traders around the range lows, and from the looks of it, the sharks are still hungry,” said trader Jelle in a Monday post on X.

According to Jelle, Bitcoin was required to hold above the monthly open at $111,900 to avoid a deeper correction toward $100,000.

“Would really prefer price holds in this area, or we'll fall back into the previous range which would open us up to another retest of $100K.”BTC/USD chart. Source: Jelle

Fellow analyst Captain Faibik said the support around $111,800 was “getting weak,” and if broken, could trigger a fresh downward leg toward the $107,000 and $108,000 zone. Bitcoin Late Longs Wiped Out as Sub-$110K BTC Price Calls Grow Louder_5

Bitcoin Late Longs Wiped Out as Sub-$110K BTC Price Calls Grow Louder_5

Several crypto industry participants remain optimistic for higher prices in spite of the drawdown. Analyst Gert van Lagen said on Monday that Bitcoin’s parabola remained intact, targeting $350,000, but warned that an invalidation of the structure could see the price drop toward 95,000. Bitcoin Late Longs Wiped Out as Sub-$110K BTC Price Calls Grow Louder_6

Bitcoin Late Longs Wiped Out as Sub-$110K BTC Price Calls Grow Louder_6

BTC/USD chart depicting a parabola. Source: Gert van Lagen

For MN Capital founder Michael van de Poppe, Bitcoin’s dip below $112,000 offers a “great entry” opportunity for traders before making a bigger move back up.

Meanwhile, analyst BitQuant said last week that his cycle top target of $145,000 for Bitcoin was still in play for 2025.

Source: Cointelegraph

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Adam

Commodity

Crude Oil News Today: Prices Edge Up as Supply Risks Offset OPEC+ Output Boost

Daily Light Crude Oil Futures

Light crude oil futures edged higher early Monday, building modest upside momentum after closing above the 200-day moving average at $63.25 on August 21. That level now acts as near-term support, while the rally faces immediate resistance at the 50% retracement level of $64.56, followed by the 50-day moving average at $65.00 and minor levels at $65.41 and $66.18.

On the downside, a break below the 200-day average would shift focus to the August 13 low at $61.12—a key trigger for downside acceleration below $60.

Geopolitical Risk Premium Builds on Russian Infrastructure Attacks

Traders remain alert to supply-side risks as Ukraine continues drone strikes on Russian energy assets. A weekend attack set fire to the Ust-Luga fuel export terminal, while the Novoshakhtinsk refinery—capable of processing 100,000 barrels per day—was still burning on Sunday. These incidents have added a layer of uncertainty to Russian exports just as the U.S. considers fresh sanctions.

President Trump reaffirmed Friday that additional penalties would be imposed if Russia fails to advance peace talks within two weeks. He also threatened tariffs on India over its continued imports of Russian crude. While U.S. Vice President JD Vance claimed Moscow had made “significant concessions,” the market appears unconvinced. Saxo Bank’s Ole Hansen said, “The market is somewhat concerned that these peace negotiations are going nowhere.”

OPEC+ Output Hikes Cap Upside Momentum

Tempering the bullish impact of Russian supply risks is the ongoing reversal of OPEC+ production cuts. With millions of barrels being added back to the market, and another supply boost likely at the September 7 meeting, bearish pressure remains in place. Hansen noted that while demand may soften into the autumn months, the bigger driver now is the ramp-up in supply.

Fed Rate Signal Lifts Risk Appetite but Demand Fears Linger

Market sentiment received a boost after Federal Reserve Chair Jerome Powell signaled a possible rate cut in September. While this supported broader risk assets, oil failed to catch strong momentum. Phillip Nova’s Priyanka Sachdeva pointed out that demand-side concerns—particularly the threat of Trump’s trade tariffs—are limiting gains and raising concerns over global growth.

Before making your next crude oil move, make sure you understand What Drives Oil Prices

Market Forecast: Watch Moving Averages for the Next Breakout

While geopolitical risks are giving bulls something to lean on, the broader tone remains neutral-to-bearish unless prices can hold above the 50-day moving average at $65.00. The 200-day moving average at $63.25 is now the pivot point. A decisive move above or below these levels will offer the next clear directional signal for crude oil traders.

Source: fxempire

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Glendon

Russia-Ukraine Conflict

Political

Key points:

Donetsk is gripped by severe water shortages
Russian-backed head has told Putin about the problem
Start of Soviet-era canal is on land controlled by Ukraine
Residents queue up at water trucks amid rationing

The head of the Russian-held Donetsk region in eastern Ukraine said a water crisis that is forcing people to queue at water trucks can only be fixed if Russia takes full control of the region, including a vital canal.

Donetsk is one of four Ukrainian regions that Russia claimed as its own in 2022 as part of what it cast as a defensive"special military operation",an assertion that Kyiv and most Western countries reject as an illegal land grab.

Moscow currently controls around 75% of the Donetsk region and Russian forces are meeting fierce Ukrainian resistance as they push to take the rest of it.

Severe water shortages in the chunk it does control, which local residents say make carrying out simple daily tasks difficult, have become a headache for Moscow, which wants to show its presence is improving people's lives.

A group of residents sent an open letter to Russian PresidentVladimir Putinlast month asking him to intervene in what they called "a humanitarian and ecological catastrophe", and Ukrainian commentators have pointed to the problem to criticise Russian governance.

Speaking to Reuters in the city of Donetsk, where he said tap water was only available for several hours every three days, Denis Pushilin, the Russian-installed head of the region, described the shortages as "sensitive."

Pushilin, who appeared on Russian state TV this month in a Kremlin meeting with Putin who was quizzing him about the shortages, said water tankers and repair crews from Moscow had been drafted in and a water pipe built to bring water from the River Don.

"(But) the situation is really difficult as it has no quick solutions,” he said.

The only way to fix the issue would be for Russia to take control of the rest of Donetsk, including a Soviet-era canal crucial for water supplies, he suggested.

WATER RATIONING

"The most and only important solution probably, and that's what the fighters are doing, is to liberate Sloviansk and nearby territories to be able to start restoring the Siverskyi Donets-Donbas Canal, which will fully supply the region with the necessary water," said Pushilin.

Built in the 1950s, the 83-mile (135-km)-long canal, which connects two rivers, starts about 12 miles northeast of Sloviansk, which is held by Ukrainian forces, and flows south finishing around 11.6 miles northeast of Donetsk city in an area controlled by Russian forces.

Pushilin said the water problem had become particularly acute this summer, forcing the authorities to introduce stricter rationing due to what he said was abnormal weather. "As a result... our reserve reservoirs are almost empty," he said.

Pushilin accused Ukraine of imposing "a water blockade," but Ukrainian officials say parts of the canal have been damaged in the war and other parts are located in front-line areas.

In Donetsk, Reuters saw residents queuing up at a water truck to fill up five-litre plastic bottles and petrol canisters with water before carting them away on trolleys or in their car boots.

“I am 78," said one pensioner who gave her name as Lyubov and was visibly upset. "How am I supposed to come here, collect water, and bring it back home? I need to go to the toilet and wash.”

Another woman, Irina, said no water had come through her taps at home for the last 12 days.

"Some people buy (bottled) water; some search for it in other places. Some people get water brought to them by people from a well and by car," she said.

At a reservoir outside Donetsk seen by Reuters, shallow rivulets of water pooled in the centre; other parts of it had turned to cracked chunks of mud.

Source: Reuters

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Adam

Economic

Shares in China Evergrande were removed from the Hong Kong Stock Exchange on Monday, marking another step in the retreat of the giant real estate developer whose downfall contributed to a prolonged crisis in China's property market.

Evergrande's creditors are still working to wind up debts that amounted to more than $340 billion. Once China's second-largest developer, it ran into trouble when Chinese regulators cracked down several years ago on what they deemed to be excess borrowing by developers.

That caused dozens of property companies to default on their debts, triggering a downturn in the property market that is still dragging on the world's second-largest economy.

Here's what to know about Evergrande:

The delisting of a one-time leader in China's property market

The Hong Kong Exchange said Monday that Evergrande's shares were delisted as of Monday morning, as expected. The shares were last traded on January 29, 2024, and then suspended after a court in Hong Kong ordered liquidation of the company when it failed to provide a viable debt restructuring plan.

Rules of the exchange stipulate that a company's share listing may be canceled if trading in its securities is suspended for 18 straight months.

Evergrande's role in China's property crisis

After years of warnings that led to global rating agencies cutting the Chinese government’s credit rating in 2017, the ruling communist party cracked down on real estate debt in 2020. It imposed controls known as “three red lines” that prohibited heavily indebted developers like Evergrande from borrowing more to pay off bonds and bank loans as they matured.

Fears of a possible Evergrande default in 2021 rattled global markets, but they eased after the Chinese central bank said its problems were contained and Beijing would keep credit markets functioning. Evergrande was one of the biggest of many developers that failed to repay their creditors.

Chinese home buyers often pay up front for apartments before they're even built. The credit crunch for Evergrande and other developers led them to suspend construction, leaving many projects in limbo. The slowing of home purchases and building rippled throughout the economy, hitting demand for construction materials, appliances and even vehicles at a time when China was also contending with disruptions caused by the COVID-19 pandemic.

Since most Chinese families have their wealth tied up in property, the anemic housing market has been a major factor crimping consumer spending.

The property downturn grinds on

There has been some recovery in the housing sector, but home prices and investment have continued to fall.

Before the crackdown on borrowing, real estate accounted for some 20% of China’s economy. When spending on steel and copper for construction, furniture and other related purchases was added in, estimates of its share of the economy rose to about a third.

China’s leaders have sought to get developers to finish projects and deliver apartments that already were paid for, providing billions in lending and subsidies. They’ve encouraged local governments to buy up excess apartments to serve as affordable housing, and relaxed down payment and mortgage requirements.

They've also lifted many restrictions on purchases of homes for investment purposes in major cities, a move that analysts at HSBC Global Investment Research described as “surprising” as they came earlier than expected.

Sales and home prices were expected to fall further in August, they said in a recent report.

“We think it’s a positive change showing government’s enhanced proactiveness in rolling out measures, which will help strengthen market confidence and address the concern on stimulus being too late,” it said.

Evergrande's status

Evergrande, headquartered in southern China's Shenzhen, near Hong Kong, was founded by entrepreneur Hui Ka Yan, who is also known as Xu Jiayin, in 1996. Its ascent and decline have mirrored the boom and bust in China's property market after housing reforms allotted apartments built by state-owned industries to employees, creating a nation of home owners.

The company's shares were listed in Hong Kong in 2009.

Evergrande filed for Chapter 15 bankruptcy protection in New York City in 2023, but that case was later withdrawn. Although a Hong Kong court ordered a winding up of the company's debts, more than 90 percent of its assets are on the Chinese mainland, making it difficult to enforce repayment to its creditors.

Its liquidators said in a recent progress report that they had received debt claims totaling $45 billion as of Jul. 31, much higher than the some $27.5 billion of liabilities disclosed in December 2022, and that the new figure was not final. They also had taken control of more then 100 companies within the group with collective assets valued at $3.5 billion as of Jan. 29, 2024.

So far, about $255 million worth of assets have been sold, the liquidators said, calling the realization “modest.”