SNAPSHOT: Equities down, Treasuries down, Crude down, Dollar up, Gold downREAR VIEW: Fed Chair Warsh sounds hawkish at Jackson Hole, "Fed has more work to do unless confident underlying inflation is moving towards 2% objective"; NFP Annual Revision Prel -79K; UoM revisions top expectations; Sources told Axios that in recent days Iran has shown renewed interest in negotiations; Fed's Collins said rate increase is warranted if inflation disappoints.COMING UP: Holiday: UK Summer Bank Holiday; desk remains open as usual. Data: Japanese Retail Sales (Jul), Chinese NBS PMIs (Aug), German Inflation Flash (Aug). Events: BoJ Annual Review. Supply: EU.WEEK IN FOCUS: Highlights include RBNZ, BoC, US NFP, ISM Manufacturing/Services, EZ CPI Prelim. Click here for the full report.WEEKLY US EARNINGS ESTIMATES: Highlights include AVGO, DELL, PANW. Click here for the full report.More Newsquawk in 2 steps:1. Subscribe to the free premarket movers reports2. Trial Newsquawk’s premium real-time audio news squawk box for 7 daysMARKET WRAPUS stocks were on the backfoot as major gainers on Thursday pared initial strength on earnings (NVDA -4.6%, CRWD -4.2%). Today, Marvell earnings also weighed on indices, after earnings were considered disappointing given lower-than-expected gross margin guidance and the deferral of longer-term fiscal guidance.Adding pressure to cyclical-exposed names was Fed Chair Warsh's speech at Jackson Hole proving hawkish. Warsh outlined that inflation remains a greater concern than employment, as expected, even in light of better-than-expected inflation figures through summer. Warsh's clearer picture of the economy comforted the long-end after an underwhelming July press conference, allowing spreads to flatten. Short-end yields rallied as he noted the Fed has more work to do, unless progress towards its 2% inflation target resumes. In response, the dollar saw broad-based strength, the Treasury curve flattened, and spot gold was weighed by the renewed Fed rate hike bets; Barclays and SocGen see hikes in September and December.At the same time as Warsh's speech, the prelim NFP annual revision was -79k, and UoM final revisions were slightly better than expected, with the 1yr inflation expectation ticking down; price action was determined by Warsh.Oil prices settled slightly lower with major developments on US-Iran absent. The new economic sanction approach, "Operation Economic Outcast", has seemingly got underway with the Treasury set to sanction UAE branches of Egypt's second-largest bank.USWARSH: Fed Chair Warsh’s Jackson Hole speech offered a little more than traders were anticipating; many had expected him to say little, given his bias against any forward guidance. Warsh’s message was heavily inflation-focused: he noted 12-month PCE was at 3.7%, and the six-month rate at 4.1%, both above target, and he stressed that more than half of PCE components are still rising above 3%. He said that underlying inflation trends “have not meaningfully improved,” despite the better-than-expected prints over the summer months. He said the Fed has more work to do, unless progress towards its 2% inflation target resumes. He again put price stability ahead of the labour side of the mandate, judging labour markets consistent with full employment. On growth and economic conditions, Warsh said the economy was resilient and strengthening, and pointed to AI-driven capex as a growth driver, adding that he would be “hard pressed” to call financial conditions restrictive, citing easy credit spreads, looser bank lending standards and firm equity markets. And that combination gives the Fed little urgency to ease. As expected, however, there was no explicit forward guidance: July’s FOMC majority preferred to wait for more data before moving, and Warsh reiterated guidance should stay “limited and circumscribed.” Accordingly, there was no explicit signal for the September meeting. In wake of the speech’s release, money market pricing tilted more hawkish, now assigning around a 50% probability of a rate hike at the September confab (vs around 36% prior to the release). It is also worth noting that Fed officials more broadly remain divided on the inflation outlook. This week, Kansas City Fed President Schmid (2028 voter) and Cleveland Fed President Hammack (2026 voter) argued current rates are not sufficiently restrictive and further tightening may be needed, while Boston Fed President Collins (2028 voter) described policy as mildly restrictive and Chicago Fed President Goolsbee (2027 voter) said he is waiting for evidence on whether the inflation shock will persist.HAMMACK (2026 voter): Cleveland Fed President already spoke a couple of times on Thursday, but in her remarks on Friday she does not see restrictive financial conditions. The hawk reiterated that it is time for the Fed to act by hiking rates, that waiting will create pain, and that they are committed to bringing inflation to its target. Hammack added she keeps an eye on the market to make decisions, and that markets are not a substitute for the Fed. Interest rates is the main and clearest tool for the Fed, and the balance sheet is reflecting many things, starting from the GFC.GOOLSBEE (2027 voter): Agreed with Warsh about details of the economy and agrees inflation is the main issue right now. Pretty clear that inflation from overheated demand is hard to address, and that inflation has continued for longer than expected. Chicago Fed President was ok with holding rates steady at the July FOMC; note he is a non-voter.UOM FINAL: Consumer Sentiment ended at 51.7 in August, above the expected 51.0, albeit -6% M/M. Current Conditions also declined to 51.9 from 54.8, slightly above the expected 51.8. Consumer Expectations fell to 51.5 from 55.4, above the 50.6 consensus. Inflation expectations ticked lower for the 1yr to 4.0% from 4.2% (exp. 4.3%), whilst the 5yr was unchanged at 3.3% as forecasted. UoM Economist Joanne Hsu wrote that “With ongoing policy uncertainty including the Iran conflict, consumers anticipate further increases in gasoline prices both in the short and long run”. Ahead, consumers expect their purchasing power to erode, "with a growing majority expecting inflation to outstrip income gains.”FIXED INCOMET-NOTE FUTURES (U6) SETTLED 15 TICKS LOWER AT 108-03+T-notes pressured by hawkish Warsh remarks that have sparked September rate hike bets. At settlement. 2-year +11.8bps at 4.352%, 3-year +10.3bps at 4.403%, 7-year +7.1bps at 4.595%, 10-year +4.8bps at 4.724%, 20-year +2.0bps at 5.209%, 30-year +1.5bps at 5.210%.THE DAY: Treasuries bear flattened as a hawkish Fed Chair Warsh speech sent the short-end rallying, leaving money markets returning to pricing in a coin flip of a Fed rate hike at the September meeting. Warsh gave a more detailed view on the economy, which restored some confidence in the long-end, evidenced by the narrowing of the 2s30s (long-end was initially bid, but later reversed). Specifically, Warsh highlighted the inflation mandate as more concerning than that of the labour market, noting that summer inflationary readings were better-than-expected; the underlying trends have not meaningfully improved. Additionally, Warsh noted the Fed still has work to do unless underlying inflation is clearly moving towards the 2% goal at sufficient speed. However, the "work" needed comes with ambiguity as Warsh didn't specify what that would mean, holding at current rates for longer or resuming tightening; perhaps, data from now until the next meeting will be the deciding factor.At the same time as Warsh's speech, the annual prelim NFP revisions saw a negative reading of 79k. Moreover, UoM final revisions for August topped expectations, with the 1yr inflation expectations now at 4.0% (prev. 4.2%) and the 5yr remaining at 3.3%. The impact of the data on price action was muted given Warsh's overpowering remarks.Elsewhere, other Fed speakers included 2026 voter Hammack continuing to call for tightening to address high inflation; meanwhile, 2027 voter Goolsbee said he agreed with Warsh's details of the economy.STIRS / OPERATIONSFed Hike Pricing via CME FedWatch: Sept 14.4bps (prev. 8.5bps), Dec 37.8bps (prev. 27bps).EFFR at 3.63% (prev. 3.63%), volumes at USD 111bln (prev. USD 112bln) on August 27thSOFR at 3.64% (prev. 3.64%), volumes at USD 2.836tln (prev. USD 2.859tln) on August 27thNY Fed RRP op demand at 0.175bln (prev. 0.456bln) across 1 counterparties (prev. 8) on August 28thCRUDEWTI (V6) SETTLED USD 0.13 LOWER AT 83.40/BBL; BRENT (X6) SETTLED USD 0.42 LOWER AT 88.10/BBLThe crude complex saw slight losses, albeit in tight ranges, as geopolitical newsflow was light on Friday, for a change. All in all, aside from central bank speakers at Jackson Hole, headline newsflow catalysts were sparse. The highlight from the symposium was Fed Chair Warsh, who stated the Fed has more work to do unless confident underlying inflation is moving towards the 2% objective. Back to US/Iran, two regional sources told Axios that in recent days Iran has shown renewed interest in negotiations, but no reaction was seen. Elsewhere, the US Treasury is set to sanction UAE branches of Egypt's second-largest bank, "Banque Misr" for doing business with Iran, FT reports citing a Bessent statement, and is also to impose sanctions on the general manager of the Dubai branch of Iran’s Bank Melli and a Hong Kong-based company. This comes following Bessent's announcement earlier in the week on 'Operation Economic Outcast' that if anyone doesn't shut down economic activities with Iran, they'll be sanctioned, and it isn't a finite timeline. WTI traded between USD 82.25-83.78/bbl and Brent USD 87.26-88. 75/bbl.EQUITIESCLOSES: SPX -0.25% at 7,711, NDX -0.70% at 29,433, DJI -0.02% at 53,564, RUT -1.39% at 2,972SECTORS: Technology -1.3%, Utilities -1.15%, Industrials -0.97%, Real estate -0.5%, Materials -0.3%, Health -0.28%, Financials +0.34%, Consumer staples +0.54%, Energy +0.59%, Communication services +1.56%, Consumer discretionary +1.69%EUROPEAN CLOSES: Euro Stoxx 50 +0.96% at 6,486, Dax 40 +0.82% at 26,583, FTSE 100 +0.29% at 10,824, CAC 40 +0.98% at 8,401, FTSE MIB +0.67% at 52,616, IBEX 35 +0.81% at 20,042, PSI +0.44% at 9,431, SMI +0.11% at 14,400, AEX +0.81% at 1,112STOCK SPECIFICSNvidia (NVDA) reportedly paused its AI Compute Partnership revenue-sharing programme less than two months after launching it, citing employee concerns about potential antitrust scrutiny and the extent of control the company sought over customers’ business practices, WSJ reports.Anthropic - A US judge ruled the Trump administration must lift its ban on Anthropic technology for federal agencies, finding the supply chain risk designation inadequately justified, Bloomberg reports.Marvell (MRVL) - Shares fell after it only narrowly beat expectations; gross margin guidance came in at the low end of consensus, and investors were disappointed that longer-term fiscal guidance was deferred.Workday (WDAY) - Shares edged higher in extended trading after a Q2 beat.Autodesk (ADSK) - Shares fell after its Q3 and FY outlooks were below expectations. QAmazon (AMZN) - Signed long-term agreements to buy nearly 200MW of power from four Swedish wind farms developed by Eolus and OX2, Bloomberg reports.Gap (GAP): - Shares rallied after a quarterly beat, and raised FY profit and margin outlooks.PayPal (PYPL) - Shares fell following news that Advent and Stripe have abandoned their pursuit of PayPal after previously offering more than USD 50bln. The consortium could return if circumstances change.Affirm Holdings (AFRM) - Shares gained after revenue and transaction volumes beat expectations, operating leverage improved and its outlook pointed to continued strong growth, supported by resilient consumer credit and merchant expansion.SpaceX (SPCX) - Elon Musk said his best estimate for SpaceX reaching approximately USD 3.5tln in annual revenue is around 2033.BioNTech (BNTX) ends its Phase 2 colorectal cancer clinical trialTyson Foods (TSN), JBS (JBS) - US President Trump says he is authorising legal documents to allow American farmers and ranchers to process their own food.Chevron (CVX) and other US firms near deal to invest billions in Venezuelan oil fields, WSJ reports.US appeals court rejects Kalshi's bid for injunction to block Nevada Gaming regulators' oversight of sports events contracts; FLUT and DKNG gained.FXThe Dollar Index saw strength on Friday and gained after Fed Chair Warsh's remarks; the Chair remarked that inflation data don’t suggest the trend has meaningfully improved, and that the 2% PCE objective is firm and there’s work to do if inflation is not moving fast enough to 2%. Overall, the Chair gave a little bit more than expected and was net hawkish, and as such, following his remarks, front-end rates are higher and back-end rates lower as a reaction. There were other Fed speakers, Goolsbee and Hammack, who both spoke yesterday and said little new. On the data front, Non-Farm Payrolls Annual Revision Prelim was -79k.All G10 FX saw losses against the Greenback on the aforementioned Warsh speech, as opposed to any currency-specific newsflow. As expected, there was plenty of central bank speak at Jackson Hole; BoE Governor Bailey remarked that they are seeing quite subdued second-round effects so far and can watch this situation for now, and cannot promise that muted second-round effects will continue. From the ECB Dolenc, Kazaks, and Kocher gave remarks, but little reaction was seen in the single-currency EUR. Elsewhere, while OATs saw some weakness at the open, EUR was steady in the wake of the French Presidential debate. Focus now shifts to Fitch’s rating on France this evening, seen unchanged, and the Socialist party, which is set to unveil demands for France’s 2027 budget over the weekend.Loading...