By Ahmad Assiri Research Strategist at Pepperstone
US equity markets ended the session slightly lower, as investors continued to weigh increasingly less dovish commentary from Fed minutes. SPX declined 0.2%, while the Nasdaq 100 dropped further 0.6%. Despite the modest moves, the broader tone was less willing to take on risk, with a growing realization that a near-term Fed-anticipated pivot toward easing is far from guaranteed.
The 10-year US Treasury yield held near 4.29%, while the 30-year yield settled at 4.90%, reflecting a mild flattening of the curve as the recent risk-on trend appears to be losing steam. The Fed’s messaging has leaned more toward inflation vigilance, with officials emphasising that price risks remain more pressing than labor market weakness, a shift that suggests a dovish turn will likely be tied to incoming economic data, even if structurally still on the horizon.
Currently, markets are pricing in an 80% probability of a rate cut in September and two cuts by year-end. However, the true test will come from the next batch of labor market data and CPI figures, both of which are due before the next FOMC meeting.
Equities: A Pause, Not Panic
On the sector level, yesterday’s underperformance was led by recent high-flyers. Megacap tech names such as Apple, Amazon, Tesla, and Microsoft closed in the red, though the price action appeared more like profit-taking than a shift in conviction. This rotation out of tech suggests a cooling-off phase rather than a wholesale shift in positioning.
A notable narrative in the session was earnings-driven. Target posted revenue of $25.21 billion and earnings per share of $2.05, beating expectations. While comparable sales fell by 1.9%, the company signaled improving shopper traffic and a gradual pickup in consumer spending. Yet, the stock slipped nearly 6% in after-hours trading following an executive reshuffle announcement.
Target CEO Transition Spooks Investors
The decline was largely attributed to investor disappointment over the appointment of insider Michael Fiddelke as the next CEO, replacing Brian Cornell, who will assume the role of Executive Chairman in February 2026. Fiddelke previously served as CFO and COO and while his promotion signals continuity, it lacks the strategic shake up some investors were hoping for particularly amid rising competitive and weak growth in key categories like apparel and home goods. The market was expecting a bold external hire with a transformative vision, instead, the internal promotion sent a business-as-usual signal about the company’s direction in an increasingly dynamic retail environment.
Though the most anticipated event on the earnings front is Nvidia’s report next week, arguably the single most important release for Q3. As the poster child for AI-driven investment, Nvidia’s results will likely set the tone for tech sentiment more broadly. A beat or miss here could have market-wide implications, especially given the current dominance of AI in shaping equity narratives.
In energy markets, Brent crude traded within a relatively narrow range of $67–68 per barrel in a session marked by equilibrium between supply/demand expectations. The price stability reflects a market anchored in fundamentals, balancing persistent demand concerns with supply-side constraints. This consolidation zone suggests oil may have reentered a phase where fundamentals are dictating price action after a period of potential tail risk.
Meanwhile, DXY continued its sideways drift around the 98 range. This reflects the broader market indecision ahead of Fed Chair Powell’s speech at Jackson Hole. Since the start of the week, dollar positioning has been muted, indicating investors are holding back from making directional bets in the absence of strong conviction or major data.
Elsewhere, gold maintained a stable footing near $3,350 per ounce, bouncing from the $3,320 support level earlier in the week. The metal continues to attract steady demand, particularly as macro headwinds and rate uncertainty provide a supportive backdrop for strategic hedging.
What’s Ahead
Market focus will shift toward preliminary PMI figures for the US, Eurozone, and UK, all due later today. These prints will offer fresh insight into forward looking business sentiment. In the US, jobless claims and existing home sales data will also be released. However, the very well-waited event is undoubtedly the Jackson Hole Symposium, which kicks off today. While no major policy shifts are expected, guidance from Chair Powell regarding how the Fed is thinking about the inflation-growth trade-off could trigger a repricing of the yield curve trajectory.