Global equities slipped on Monday as U.S. Treasury yields declined and technology shares retreated, while geopolitical tensions and trade threats added pressure to risk assets. The S&P 500 ended marginally lower, with the tech-heavy Nasdaq down 0.8% as eight of the 11 S&P 500 sectors advanced, led by financials and utilities.
U.S. Treasury yields fell across the curve, with the 30-year yield dropping 5 basis points to 5.195%, the 10-year yield easing to 4.66%, and the 5-year yield at 4.367%. The flattening of the yield curve reflected market expectations ahead of Federal Reserve Chair Kevin Warsh’s keynote address at the Kansas City Fed’s annual Jackson Hole symposium on Friday. Warsh’s remarks are being closely watched for signals on interest-rate policy amid persistent inflation above the Fed’s 2% target.
The U.S. dollar strengthened 0.2%, its best performance in two weeks, while the Canadian dollar weakened 0.65% against the greenback after President Donald Trump threatened to impose 50% tariffs on all Canadian cars, trucks, and auto parts effective January 1, 2027, if no trade agreement is reached. Canadian Prime Minister Mark Carney responded with plans for "dollar-for-dollar" retaliatory tariffs on U.S. steel, electronics, and other imports starting September 8, escalating trade tensions between the two nations.
Tech stocks led declines in the S&P 500, with the sector down 1.6% as Nvidia fell 3% despite broader market gains in financials and consumer staples. Individual tech names including Seagate, SanDisk, and Micron dropped roughly 6% each. In contrast, Expedia surged 5.5%, Visa gained 3%, and Walmart rose 2.7%. Alibaba’s planned AI share sale, valued at $10.2 billion at a sharp discount, also weighed on sentiment.
Oil prices fell 2.5%, with WTI crude down 2.99% to $82.47 per barrel and Brent crude declining 2.76% to $88.04, marking the second drop in 14 sessions. Gold futures rose 1% to $4,671.94 per ounce, nearing their highest level since mid-May. Bitcoin steadied above $78,000 and approached $80,000, extending a rally that has lifted the cryptocurrency 25% in just over a week.
U.S. Treasury Secretary Scott Bessent faced scrutiny over surprise interventions in bond and foreign-exchange markets, including plans to expand long-dated bond buybacks and potentially use Treasury General Account funds to purchase longer-dated securities—a strategy dubbed the "Treasury Twist" aimed at reducing yields to stimulate economic growth. Bessent also outlined new sanctions against Iran during a press conference in Washington, D.C., intensifying geopolitical pressures. The Treasury’s $69 billion auction of 2-year notes concluded without disruption, though market participants monitored the evolving policy landscape for further signals.
