Morning Commentary: Wall Street Snaps Winning Streak as Treasury Yields Climb
Ahmedabad, 24 August: U.S. equities ended the week broadly lower, snapping a three-week winning streak, despite a Friday stabilisation rally driven by solid domestic business activity data.
The Nasdaq led declines, down 2.8% on elevated sensitivity to rising long-term yields and semiconductor weakness. The S&P 500 fell 1.4%, while the Dow Jones outperformed growth-heavy benchmarks, slipping just 0.4% on support from defensive value holdings and energy names.
The pullback came as an unusually strong quarterly earnings season neared its end: the S&P 500 finished the week 1.6% below the record high set the previous week, while the Nasdaq stood 3.4% below its early-June peak.
Treasury yields edged higher during a week in which U.S. gross federal debt crossed the $40 trillion mark for the first time. The 30-year yield touched multi-year highs near 5.34% mid-week on fiscal deficit concerns and persistent long-end supply, before easing slightly to close at 5.27% — still near its highest level in almost two decades.
Investor sentiment stayed cautious ahead of the Federal Reserve’s annual Jackson Hole Economic Symposium, running August 27–29 in Jackson Hole, Wyoming, where Fed Chair Kevin Warsh headlines Friday’s address. While business activity data signalled steady expansion, sticky core inflation continued to temper expectations for aggressive rate cuts in late 2026.
Gold extended its rally for a third straight week, with futures touching a three-month high near $4,600/oz.
Brent’s reaction within the $90–95/bbl range remains the most immediate external macro variable for Indian equities, particularly OMCs, paints, aviation, autos, and consumption.
Indian equities closed modestly lower for a second consecutive week, with risk appetite constrained by elevated crude prices, rising US Treasury yields, and Middle East-related supply concerns. The market found selective support from private banks, metals, realty, and pockets of the broader market.
Markets remained under selling pressure through the week, as volatility in global bond yields, elevated Brent crude prices, and persistent geopolitical tensions in West Asia kept investor sentiment subdued.
FIIs remained net sellers for the week, with outflows of ~Rs 1,600 crore, while DIIs provided crucial support with inflows of over Rs 17,300 crore.
The Nifty continues its choppy phase, lacking a clear directional signal. A sustained close above 24,400 could trigger a bullish momentum move, while a close below the key support level of 24,000 may lead to increased selling pressure. The broader markets remain stronger and could continue to outperform the benchmark index.
Indian equities are set for a positive start, buoyed by hopes of an India-US trade deal and subdued energy prices.
from Mr. Devarsh Vakil, Head of Prime Research at HDFC Securities
(Disclaimer: The information provided here is investment advice only. Investing in the markets is subject to risks and please consult your advisor before investing)
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