MPC Markets Morning Call — 26th August 2026: Wall Street Rebounds on Tech and Oil Slide Ahead of Nvidia Earnings
Wall Street advanced modestly overnight as technology stocks rebounded and a sharp drop in oil prices eased inflation fears, with Brent crude falling below $86 on hopes for a Strait of Hormuz reopening. The US–Canada trade war escalated with tit-for-tat tariffs, consumer confidence hit a seven-month low, and bond yields extended their decline. All eyes now turn to Nvidia’s earnings tonight and the US core PCE inflation print, while here in Australia, July CPI data drops at 11:30am AEST with the ASX 200 pointing to a modest higher open.
The S&P 500 added 0.3% to 7,677, the Nasdaq rose 0.7% and the Dow gained 0.3% as technology stocks bounced back from Monday’s selloff ahead of Nvidia’s closely watched quarterly results on Wednesday. Brent crude tumbled 5.8% to $85.31 after Iran and Oman discussed a framework to reopen the Strait of Hormuz and reports emerged of a possible US–Iran ceasefire, pulling Treasury yields lower — the US 10-year fell 7bp to 4.63%. Meanwhile, US consumer confidence dropped to its lowest since January at 89.4, the US–Canada trade war escalated with $27.6 billion in retaliatory Canadian tariffs, and Treasury Secretary Bessent’s “Operation Economic Outcast” sanctions on Iran drew a muted market response. The RBA held at 4.35% with a tightening bias yesterday. ASX 200 futures point to a 29-point (+0.3%) higher open at 9,143 as attention shifts to today’s July CPI release and tonight’s Nvidia earnings and core PCE print.
S&P 500 rose 0.3% to 7,677, Nasdaq +0.7%, Dow +0.3% — tech stocks recovered with Nvidia +2.2% snapping a seven-day losing streak ahead of Wednesday’s earnings, widely seen as the next major test of the AI trade.
Brent crude plunged 5.8% to $85.31 after Iran and Oman discussed a Strait of Hormuz reopening framework and reports of a possible US–Iran ceasefire — the oil slide pulled Treasury yields lower and eased inflation fears.
US 10-year yield fell 7bp to 4.63% as the bond rally extended — CNBC reported the Treasury may tap its near $1 trillion General Account to fund buybacks and cap longer-end yields, though analysts warn the measure is unsustainable.
US consumer confidence dropped to a seven-month low of 89.4, with the Conference Board noting that while current assessments improved, future expectations fell to their lowest since January on Middle East tensions and income concerns.
The US–Canada trade war escalated sharply: 50% US tariffs on $27.6bn of Canadian goods took effect Saturday, with Ottawa pledging “dollar for dollar” retaliation across steel, dairy, appliances and electronics from September 8.
ASX 200 futures +0.3% to 9,143 — July CPI data at 11:30am AEST is the key domestic event (consensus 3.3% y/y), with the RBA’s hawkish hold and tightening bias keeping a rate hike firmly on the table if upside risks materialise.
US Equities: Tech Rebounds Ahead of Nvidia’s Big Test
Wall Street recovered from Monday’s mixed session to close higher, led by a rebound in technology stocks and relief from falling oil prices and Treasury yields. The S&P 500 gained 0.32% to 7,677.24, the Nasdaq Composite rose 0.66% to 26,151.30, and the Dow Jones added 0.30% to 53,577.40. Advancing issues outnumbered decliners by 1.71-to-1 on the NYSE and 1.76-to-1 on the Nasdaq.
Nvidia rose 2.2%, snapping its longest daily losing streak since September 2022, ahead of fiscal Q2 results after Wednesday’s close. The AI heavyweight is expected to report revenue of roughly $92 billion, nearly double last year, though options markets are pricing a relatively restrained 5.4% post-earnings move — well below the 7.4% average of its past 12 reports. Third-quarter guidance above $105 billion would reinforce the bull case; anything near $103 billion risks a “sell the news” reaction despite still-exceptional growth.
“Nvidia is operating on all cylinders and they’re doing absolutely everything correctly at this point. We’re anticipating good news here, but so is everybody.” — Mark Malek, Siebert Financial
“Investors want to hear that AI demand remains strong, that hyperscaler spending is not slowing, that margins are holding up and that the guidance continues to justify the ongoing enormous spend.” — Kenny Polcari, SlateStone Wealth
Elsewhere in tech, Meta climbed nearly 2%, AMD surged 4.9% after a Raymond James upgrade, and Micron gained 2.5%. The Philadelphia Semiconductor Index ended 1.4% higher after falling 2.7% on Monday. In corporate news, OpenAI said its new Jalapeno chips outperformed Nvidia’s current lineup in testing, while Lambda Inc. is in talks to raise up to $3 billion ahead of a potential IPO.
On the downside, Dick’s Sporting Goods plunged 30.7% after slashing annual forecasts, the latest sign of growing pressure on the US consumer. Moderna surged 14% after a Barclays target price hike following promising skin cancer vaccine trial results with Merck. Target fell 3.8% after pulling a Halloween costume criticised for evoking blackface.
Oil Crashes, Bonds Rally as Hormuz Hopes Build and Bessent Draws Fire
Brent crude futures plunged 5.8% to $85.31 and WTI fell 4.6% to $81.08, their sharpest daily drops in months, after Iran and Oman published a joint statement on “constructive consultations” for safe resumption of Strait of Hormuz navigation. The move took a further leg lower after Russia’s RIA Novosti reported a possible US–Iran ceasefire agreement. Treasury Secretary Bessent’s “Operation Economic Outcast” sanctions on Iran, which stopped short of a full blockade, were viewed as moderate by markets.
The oil slide fuelled a sharp rally in Treasuries, with the US 10-year yield dropping 7bp to 4.63% — its biggest daily decline in two months. A key catalyst was CNBC reporting that the Treasury may use its near $1 trillion Treasury General Account (TGA) to fund expanded bond buybacks and cap longer-end yields.
Former colleague Stanley Druckenmiller publicly criticised Bessent’s buyback strategy, warning that “liquidity tools cannot be used to fix solvency issues.” Brookings Institution’s Robin Brooks added: “The TGA is finite… the ever-expanding deficit means debt issuance is continually growing. Using the TGA is confronting a ‘flow’ problem with a ‘stock’ measure. That never works. Flows always win that fight.”
The US–Canada trade war escalated sharply after weekend negotiations collapsed. New 50% US tariffs on $27.6 billion of Canadian imports took effect Saturday, with Ottawa pledging “dollar for dollar” retaliation. Canada announced tariffs of 15%, 25% and 50% on US goods across steel, dairy, appliances, agricultural equipment, pulp and paper, and electronics, effective September 8. President Trump accused Canada of charging American farmers “400%” tariffs and called the country “easily the most difficult and unreasonable” trading partner.
Consumer Confidence Hits Seven-Month Low; RBA Keeps Tightening Bias
US consumer confidence fell to 89.4 in August from 90.2 in July, the lowest reading since January and below the 90.3 consensus. The Conference Board’s Jeffrey Roach noted that “consumers are optimistic about today but increasingly nervous about tomorrow,” with future expectations falling to their lowest since January as Middle East tensions and income concerns weighed on sentiment. The data follows weak July retail sales and Walmart’s worst US comparable sales growth in six years.
Markets are pricing one 25bp rate increase by year-end. The core PCE print on Wednesday and Fed Chair Kevin Warsh’s Jackson Hole speech on Friday will be critical. Warsh has faced intense criticism from Wall Street for what analysts call over-restrictive Fed communications, and Miller Tabak’s Matt Maley expects him to “stick to his guns.”
RBA minutes released Tuesday revealed “several members judged that it was quite possible that the upside risks to the inflation forecast would crystallise, requiring some further tightening.” The board linked upside inflation risks directly to higher borrowing costs, with Deputy Governor Hauser saying explicitly: “If those upside risks to inflation crystallise, and we don’t see inflation coming down, we will — and we will have to — raise interest rates again.” The war in Iran, AI infrastructure investment and stagnant productivity are the key risks the board is watching.
In Europe, German GDP growth in Q2 was revised higher and business morale hit a one-year high. Citi’s European economic surprises index surged to a three-and-a-half-year peak, with the gap versus the US index now the widest in Europe’s favour since February 2023. China’s yuan also strengthened through 6.72 per dollar, its firmest since February 2023, though the PBOC continues to lean against appreciation.
ASX Set to Open Higher; CPI, Nvidia and PCE in Focus
ASX 200 futures were up 29 points (+0.3%) to 9,143 after the local index gained 0.68% on Tuesday. The Australian dollar edged up to 0.7165 on the RBA’s hawkish hold and a softer US dollar (DXY –0.15% to 98.91). Gold firmed 0.6% to $4,719, copper jumped 1.6% to $6.71 on tight supply, and iron ore was flat at $95.34. The VIX fell 2.1% to 15.45.
Tuesday’s ASX earnings were a tale of two markets. Coles (+4.9%) delivered the session’s best result with underlying NPAT up 13.7% on genuine margin improvement. AUB Group (+4.1%) guided to ~13.5% profit growth in FY27. On the flip side, Monadelphous crashed 12% despite record revenue and 52% profit growth after flagging FY27 as a “consolidation year.” Woodside (–1.4%) reported solid financials but abandoned its fixed $5bn new-energy target. In resources, FireFly Metals’ Green Bay PEA delivered NPV of ~A$2.2bn with 42% IRR, while South32’s Sierra Gorda ore reserve increased 61%.
The key domestic event today is the 11:30am AEST release of July CPI data (consensus 3.3% y/y, down from 3.8%; trimmed mean 0.4% m/m). Second-quarter construction work done is also due then. A heavy ASX earnings slate includes Woolworths, WiseTech Global, Sandfire Resources, Netwealth, Worley, Paladin Energy and Flight Centre.
- 11:30 AEST — Australian CPI y/y (f/c 3.3% / last 3.8%) and Trimmed Mean CPI m/m (f/c 0.4% / last 0.3%)
- 10:30pm AEST — US Core PCE m/m (f/c 0.2% / last 0.1%) and Prelim GDP q/q (f/c 1.5% / last 1.5%)
- After US close — Nvidia fiscal Q2 earnings (EPS ~$0.68, Revenue ~$92bn)
- Friday — Fed Chair Warsh keynote at Jackson Hole
