Global Markets Wobble as Stock Futures Dip, Dow Extends Losses Amid Yield Surge and Geopolitical Tensions

Stock futures experienced a slight decline early Monday, setting a subdued tone after a week marked by losses. Markets continued to face pressure from persistently elevated Treasury yields, signaling investor apprehension.

Dow Jones Industrial Average futures traded 18 points lower, a marginal dip of 0.03%. Meanwhile, S&P 500 futures shed 0.1% and Nasdaq-100 futures fell 0.3%, indicating a broader cautious sentiment across the indices.

The previous week saw the Dow fall 0.8%, marking its second consecutive weekly pullback. The S&P 500 and Nasdaq also retreated, shedding 1.4% and 2% respectively, thus snapping their three-week winning streaks.

Globally, Asian markets presented a mixed picture. Japan's Nikkei 225 fell 0.57%, while the Topix gained 0.22%. South Korea's Kospi dropped 3.47%, though the small-cap Kosdaq rose 0.80%. Hong Kong's Hang Seng index was down 2.09%, and mainland China's CSI 300 dipped 1.26%.

A primary driver of market pressure has been the surge in global bond yields. The 30-year U.S. Treasury bond yield last week surpassed 5.3%, reaching levels not witnessed in nearly two decades. Similar multi-year highs were observed in Japan, France, and Germany.

Geopolitical concerns, particularly the U.S.-Iran war, also fueled investor fears of prolonged conflict, which could keep oil prices elevated and exacerbate inflation. Despite Treasury Secretary Scott Bessent's announcement of measures to help stabilize the long end of the U.S. yield curve, any market reprieve proved short-lived.

David Zervos, chief market strategist at Jefferies, commented, "I argue that the Treasury's surprise decision to upsize tactical long-end buybacks is effectively a Treasury-led 'Operation Twist' designed to counter shifts in shorter term market conditions, rather than a form of QE." He added, "While buybacks do not create reserves and therefore lack QE's direct money-printing channel, I believe they do leave room for fiscal expansion and deliver some QE-like reflationary effects."

This week, investors await crucial economic data, including the July personal consumption expenditures (PCE) price index on Wednesday. Additionally, the Federal Reserve's annual symposium in Jackson Hole, Wyoming, will be closely watched, especially for a speech expected from Chairman Kevin Warsh.

Artificial intelligence (AI) will also remain a key focus, with tech giants Nvidia and Marvell Technology scheduled to report earnings on Wednesday and Thursday, respectively. Adding to the AI narrative, Bloomberg News reported over the weekend that Nvidia has informed clients of potential price hikes exceeding 15% for servers featuring its Vera Rubin and Blackwell chips, effective in early 2027.

European markets open lower

Europe's Stoxx 600 index opened 0.1% lower, with sector performance mixed. Travel, miners, and food & beverage stocks saw gains of around 0.4%, while the technology sector dropped 0.78%.

Stoxx 600. — Jenni Reid

Gold at 3-month high as bullion rebound continues

Gold prices continued their August resurgence on Monday, with spot gold up 0.75% to $4,637.28 per ounce by 1:55 a.m. ET, reaching its highest level since mid-May. The precious metal, while still below its record highs of almost $5,600 earlier in the year, has recovered this month amid U.S. dollar weakness and increasing global concerns over government debt levels.

Spot gold. — Jenni Reid

Oil prices fall as investors await U.S. sanctions on Iran

Oil prices declined Monday as investors anticipated details of what Washington has described as its toughest-ever sanctions campaign against Iran. Tehran, however, dismissed the threat of intensified economic pressure.

West Texas Intermediate futures, the U.S. benchmark, fell approximately 1.62% to $85.65 per barrel. Brent crude, the international benchmark, lost 1.38% to $93.09 a barrel.

U.S. Treasury Secretary Scott Bessent is scheduled to unveil a new package of sanctions against Iran later Monday. Bessent previously stated on X (formerly Twitter), "At dawn begins an economic D-Day — the single greatest financial offensive ever marshaled against an adversary." Last week, he told CNBC that Washington aims to "collapse" the Islamic Republic with the "toughest sanctions in history," urging U.S. allies to sever economic ties with Tehran.

FTSE Russell's rebalancing to trigger billions in flows across APAC and EM markets: Goldman

Goldman Sachs anticipates that FTSE Russell's recent rebalancing will trigger over $15 billion and $10 billion in gross two-way flows across APAC and emerging markets, respectively, with net passive inflows reaching $4.1 billion and $3.8 billion. Goldman expects China, Korea, Taiwan, and India to see the largest net inflows within Asia Pacific, while Japan may experience the most selling pressure. Within Asia-Pacific, tech hardware, chips, and capital goods are projected to attract the most passive inflows, conversely, banks and autos could face the largest outflows.

These projections follow FTSE Russell's announcement of the indicative semi-annual review results for its Global Equity Index Series after market close on August 21. The index and benchmark provider confirmed the reclassification of Vietnam's stock market from a frontier market to a secondary emerging market status, effective September 21. —Justina Lee

SoftBank Group shares falls nearly 4% as company plans $6.3 billion debt issuance

Shares of SoftBank Group fell 3.8% Monday after the Japanese investment giant announced plans to issue 1 trillion yen ($6.29 billion) in corporate bonds. The seven-year unsecured bonds will be offered primarily to individual investors in Japan, with a preliminary annual interest rate ranging from 4.30% to 4.90%. Final terms are expected by September 4, with the offering period from September 7 to September 16. — Jenny Lee

Alibaba plunges after announcing $10.2 billion share placement to fund AI push

Alibaba shares plummeted as much as 10% in Hong Kong on Monday following the Chinese tech giant's announcement of an 80 billion Hong Kong dollar ($10.20 billion) placement of newly issued shares to non-U.S. investors. The company stated its intention to allocate all net proceeds towards investing in its full-stack AI capabilities, including expanding and enhancing its AI infrastructure. Alibaba will issue 710 million new shares at HK$112.70 apiece, a discount compared to Friday's closing price of HK$123. Shares were last trading 8.4% lower at HK$112.7. This share placement, expected to close on Wednesday, comes shortly after Alibaba reported a 75% drop in profit for the June quarter, significantly impacted by heavy AI spending, which saw capital expenditure jump 75% to 67.7 billion yuan. —Jenny Lee

Shein is looking to raise up to $1.77 billion in its Hong Kong IPO

Fast fashion retailer Shein aims to raise up to $13.86 billion Hong Kong dollars ($1.77 billion) in its initial public offering, as per a Monday filing. The company is offering 280 million class B shares, priced between HK$47.60 and HK$49.50 per share, which would value it at nearly US$27 billion at the top of that range. The final price is slated for announcement on August 31, with shares expected to begin trading on September 1. Shein's valuation has seen a sharp decline from earlier private fundraising rounds, where it was valued at $98.2 billion in 2022 and $64 billion in 2023 and April 2024, according to Reuters. Shaun Rein, managing director at China Market Research Group, noted last month that investor and consumer excitement for the ultra-fast fashion retailer has waned. —Justina Lee

Mainland China's CSI 300, Hong Kong's Hang Seng slip

Mainland China and Hong Kong shares saw declines in early trading Monday. Hong Kong's Hang Seng index was down 1.63%, while mainland China's CSI 300 was marginally lower. The declines in the Hang Seng were primarily led by the tech and consumer cyclicals sectors, which fell 2.05% and 0.29%, respectively. —Justina Lee

Samsung SDI jumps 8% on $3.2 billion Samsung Display stake sale

Samsung SDI shares in Seoul surged 8.2% in early trading Monday, following the company's announcement that it would sell a portion of its stake in Samsung Display for approximately 4.45 trillion won ($3.2 billion). In a Friday filing, Samsung SDI stated its plan to sell the shares back to Samsung Display to secure funds for investments in future growth businesses. Post-sale, Samsung SDI's stake in Samsung Display will decrease to 10.22%. — Jenny Lee

Japan's Nikkei 225 and South Korea's Kospi open lower

Asia-Pacific markets traded mixed early Monday. Japan's Nikkei 225 slipped 0.10%, while the Topix remained flat. South Korea's Kospi dropped 0.71%, but the small-cap Kosdaq saw a gain of 0.94%. Australia's benchmark S&P/ASX 200 was 0.33% higher. —Justina Lee

Asia-Pacific markets set to open subdued amid concerns over rising global bond yields

Asia-Pacific markets were poised for a subdued opening Monday, as traders continued to evaluate the implications of rising global bond yields. Japan's Nikkei 225 was expected to open muted, with its Chicago futures contract at 65,970 and Osaka counterpart last trading at 66,010, compared with its previous close of 66,016.36.

Hong Kong Hang Seng index futures were at 25,895, contrasting with the index's last close of 26,009.46. Futures for Australia's S&P/ASX 200 last traded at 9,028, while the index closed at 9,058.90.

Tensions in the Middle East continued to simmer after the Trump administration warned that U.S. allies and the rest of the world should cease doing business with Iran. Treasury Secretary Scott Bessent told CNBC, "It is time for our allies and the rest of the world to make a decision, and we are going to squash the economy of this murderous regime." —Justina Lee

Nvidia notifies clients about AI-linked price increases, report says

Bloomberg News reported over the weekend, citing sources, that Nvidia has informed clients of price hikes exceeding 15% for servers equipped with Vera Rubin and Blackwell chips. These increases are expected to apply to servers shipping in early 2027. This report comes as Nvidia prepares to release its quarterly figures this week. — Fred Imbert

Bessent to announce sanctions on Iran

Treasury Secretary Scott Bessent is slated to hold a press conference Monday to unveil sanctions against Iran, which he has characterized as the most extensive campaign of "coordinated economic isolation in the history of the world." Bessent's announcement follows U.S. President Donald Trump's statement last week that the U.S. would target Iran with the "most crushing economic operation ever taken against any country." Read the full story here. — Ashley Capoot

Stock futures open little changed

Dow Jones Industrial Average futures traded just below the flatline. S&P 500 and Nasdaq-100 futures were also flat. — Fred Imbert