Markets Mixed as Tech Weakness Weighs; Investors Eye Fed Signals, Retail Earnings, and Tariff Developments

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Index Update:  U.S. markets closed mixed on Tuesday as tech stocks dragged major indices lower ahead of key earnings and Fed signals. The S&P 500 fell 0.59% and the Nasdaq dropped 1.46% on steep declines in Nvidia, AMD, and Palantir, while the Dow inched up 0.02% supported by Home Depot’s post-earnings rally. Investors are now awaiting results from Lowe’s, Target, and TJX, as well as Fed minutes and Chair Powell’s Jackson Hole remarks, with attention on policy after July’s meeting saw two dissenting votes for the first time since 1993.

Market Movers:  On Tuesday, the top gainers were Gaxos.ai Inc. (+87.27%), followed by PainReform Ltd. (+76.87%). On the contrary LanzaTech Global, Inc. (-99.10%), and Viking Therapeutics, Inc (-42.12%) declined the most the same day.

Commodities Update:  WTI crude rose above $62 per barrel and Brent above $66 on Wednesday, rebounding from prior losses as investors weighed prospects of a Russia-Ukraine peace deal that could ease sanctions and boost supply. Industry data showing a 2.4 million-barrel U.S. inventory draw, larger than expected, signaled stronger demand, while gasoline and distillate inventories also fell. However, prices remain near a three-month low and are down over 10% this month, pressured by potential peace progress, softer sanction enforcement, and rising OPEC+ output. Gold traded near $3,320 per ounce, close to a three-week low, as easing geopolitical risks and a stronger dollar weighed on safe-haven demand ahead of the Fed’s Jackson Hole symposium. Investors await Fed Chair Powell’s speech and FOMC minutes for policy cues, with markets pricing in two 25bps cuts this year, possibly starting in September. Uncertainty persists as Russia has yet to confirm participation in peace talks, despite Trump and Zelenskiy signaling willingness.

Macro Updates:  US Mortgage Applications Dip as Rates Edge Higher

The average 30-year fixed mortgage rate rose to 6.68% in mid-August from a recent four-month low, contributing to a 1.4% weekly drop in total mortgage applications, according to the Mortgage Bankers Association. Purchase applications held steady at a four-week high and remain well above last year’s levels, while refinance applications, more sensitive to rate shifts, declined 3.1%. The modest pullback follows a 14% surge over the prior two weeks, amid higher Treasury yields driven by weak auctions and a hot PPI report.

U.S. and China Hold Positive Tariff Talks Amid 90-Day Pause

Treasury Secretary Scott Bessent said the U.S. and China have had “very good talks” on tariffs during the current 90-day pause and expect further discussions before November. He highlighted China as the largest contributor to tariff revenue and described the current situation as “working pretty well.”

U.S. Expands Steel and Aluminum Tariffs to 400+ Product Categories

The Commerce Department broadened its 50% tariffs on steel and aluminum to cover 407 additional product categories, including auto parts, chemicals, plastics, and furniture components. The move, effective Monday, aims to close loopholes and bolster the U.S. steel and aluminum industries, according to Under Secretary Jeffrey Kessler.

Bonds Commentary:  The 10-year US Treasury yield hovered near 4.3% as investors awaited Fed minutes and Powell’s Jackson Hole speech for policy signals. The July meeting saw two officials favoring a rate cut, the first such dissent since 1993. Markets now price in an 85% chance of a September cut and about 54 bps of easing by year-end, while earnings from major retailers will offer insight into consumer strength.

Futures Update:  U.S. stock index futures edged lower as investors stayed cautious ahead of key economic and central bank signals from the Jackson Hole Symposium. The major indices ended mixed in the previous session, with the S&P 500 and Nasdaq declining while the Dow managed a slight gain. Technology stocks led the losses, pressured by profit-taking and concerns over potential U.S. government equity stakes in major chipmakers.

Following a choppy session on Monday, most stocks moved lower throughout the trading day. The S&P 500 slightly declined by 37.80 points, or 0.59%, closing at 6,411.37. From a technical standpoint, the index appears to be encountering resistance at higher levels and may experience a short-term pullback to the downside, as noted in previous analysis. The 14-day RSI shows divergence relative to the price action, suggesting profit-taking. Additional support levels are identified around major moving averages below the current price, with key support near 6,344 and resistance around 6,520.