Yield Pressures, Tech Sell-Off, and Hawkish Fed Minutes

Macroeconomics & Central Banks

• Fed Minutes: Minutes from the July meeting show that numerous officials consider further rate hikes likely if inflation fails to recede. While the fed funds rate was held at 3.50%-3.75%, three FOMC members voted for a 25 basis point hike.
• Debt & Yield Pressures: Total US public debt crossed $40 trillion for the first time. The US 30-year yield reached 5.34%, its highest since June 2007. In Europe, German 10-year and 30-year yields hit 15-year highs before paring gains after the US Treasury announced it would double buyback operations for long-dated Treasuries to aid market liquidity.

Indices & Tech Sector

• Wall Street Pullback: The S&P 500 dropped -0.69% to 7,691.76 points, marking a third consecutive decline since crossing 7,800 points. The Nasdaq Composite slid -1.33% to 26,289.71 points.
• Semiconductor Sell-Off: The Philadelphia Semiconductor Index fell over 5%. Heavy selling impacted Western Digital (-7%), SanDisk (-9%), Marvell Technology (-9%), Seagate (-8%), Nvidia, and Micron. The sell-off spilled over to Europe, with STMicroelectronics falling -7.64% in Paris.

Energy & Geopolitics

• Oil Rally Continues: Brent crude topped $92 per barrel, reaching its highest level since late July due to tensions stemming from the Iran conflict. US refiners increased crude processing to 17.4 million barrels per day, the highest level since September 2019.

Key Focus Today

• Sovereign Yields: Monitoring liquidity across sovereign bond markets following US Treasury buyback operations.
• Energy Price Volatility: Crude oil behavior above $92 and its impact on central bank inflation projections.