Global equities experienced a downturn, led by technology stocks, marking a risk-off start to a pivotal week for financial markets. Nasdaq 100 futures fell by 0.6%, with chipmakers and Asian tech giants like Alibaba Group Holding Ltd. and SoftBank Group Corp. also seeing declines. In contrast, Europe's Stoxx 600, with less exposure to the tech sector, saw a modest rise of 0.1%.
Oil prices retreated, with Brent crude falling 1.7% to below $93 a barrel, breaking a six-day streak of gains. This drop was attributed to traders awaiting details of Treasury Secretary Scott Bessent's plan to economically isolate Iran, aimed at normalizing energy flows through the Strait of Hormuz. The decline in oil prices led to a decrease in Treasury yields across the curve, while the dollar modestly rebounded, and gold moved towards $4,650 an ounce.
Key events anticipated this week include Federal Reserve Chair Kevin Warsh's speech at Jackson Hole on Friday, which is expected to provide insights into future interest rate decisions amidst concerns over budget deficits and persistent inflation. The Fed's preferred inflation gauge will be released on Wednesday, and AI bellwether Nvidia Corp. is scheduled to report earnings on the same day. Options markets are pricing in a 4.6% move for Nvidia's stock following its results, with analysts noting Nvidia's significant influence in the tech industry. Alibaba also raised HK$80 billion ($10.2 billion) in Hong Kong's largest secondary share sale to fund its AI ambitions.
