Weekly Market Update (Aug 23, 2026)
HIGHLIGHTS
The US Treasury announced that it would double the size of buybacks for long-dated Treasuries this week, although the effect was short-lived. The Fed’s Jackson Hole meeting, oil prices, and core PCE will be the key focus next week.
- Eurozone: Higher energy prices are likely to push headline inflation above 3% in the coming months. Markets expect the ECB to raise rates by 25 bps at the September meeting.
- China: Domestic demand is weakening, and the trend is accelerating. Property and consumption are the main drivers. Markets expect fiscal support to be delayed despite downside risks.
- USD: The intervention in the Treasury market added downward pressure to the dollar. The weakening dollar also reflects fiscal concerns and uncertainty over further actions by the Treasury.
MARKETS
| Nasdaq | 26,180.46 | -2.05% |
| S&P 500 | 7,674.37 | -1.43% |
| Dow | 53,277.01 | -0.85% |
| 10-Year | 4.74% | +4bps |
| Brent | 94.39 | +6.63% |
| DXY | 98.84 | -0.80% |
*Data as of market close. 5-day change ending on Friday.
VIEW FROM THE STREET
Equity
Standard Chartered: We recommend Chinese equities due to policy support and AI localization tailwinds. This includes a solid plan to allocate a national AI fund, over RMB 35 trillion in infrastructure spending concentrated in the 15th Five-Year Plan, and an over-80% domestic hardware mandate.
J.P. Morgan: It is harder for investors to diversify away from AI exposure as AI’s share of public and private markets continues to grow. They need to take a more active approach to limit concentration in this single theme to maintain diversified portfolios.
Fixed Income
Barclays: A mix of inflation and fiscal concerns is keeping government bonds under pressure. This prompted the US Treasury to intervene and announce an expanded buyback program.
UBS: The 30Y Treasury yield is still above 5%. Investors are still concerned about large fiscal deficits, high energy prices, and strong capital demand from AI.
Economy
Morgan Stanley: The S&P 500 is not the economy, especially during a tech boom like the one we are experiencing. S&P 500 sales growth is diverging from nominal GDP, with the result driven by a few dominant mega-cap players.
HSBC: Market pricing for a September rate hike has dropped. The Fed Chair reaffirmed his commitment to the 2% inflation target while questioning whether PCE is the right inflation gauge.