Markets steady ahead of Jackson Hole and Ukraine talks

General market commentary

Markets cooled on Friday after a strong run of gains, with the S&P 500 slipping 0.3% to 6,449.8, snapping a three-day record streak, while the Nasdaq eased 0.4% and the Dow inched 0.1% higher. Despite the softer finish, all three benchmarks secured a second consecutive week of advances, underpinned by growing conviction that the Federal Reserve may soon move towards cutting interest rates. Investor sentiment, however, was tempered by weaker US consumer confidence and mixed inflation data, which highlighted persistent cost pressures in services and raised questions over the timing and scale of policy easing. Treasury yields edged higher, while oil prices fell, and sector performance was mixed, with health care leading gains thanks to a Berkshire Hathaway stake in UnitedHealth, while financials weighed on the broader market.

Attention now turns to the Federal Reserve’s Jackson Hole Symposium later this week, where Chair Jerome Powell is expected to signal the central bank’s policy direction. With inflation holding steady but still above target and signs of labour-market cooling emerging, markets are betting heavily on a September rate cut, though officials remain cautious given the uncertain outlook. Against this backdrop, investors appear to be rotating into rate-sensitive and cyclical areas such as mid-caps, financials and consumer discretionary, while also maintaining exposure to long-term growth themes. The coming days, which feature housing data and leading indicators, could further shape expectations ahead of September’s policy meeting.

Latest market and economic update

Most Asian equities rose this morning on Ukraine ceasefire hopes, though tech and energy losses capped gains. Japan’s Nikkei hit record highs, China advanced on eased tariff fears, and India pointed to a strong open. South Korea fell, Australia was flat, and Singapore slipped as oil shares weakened.

US equity futures edged higher overnight, extending gains after record highs last week. Optimism over a likely September Fed rate cut underpinned sentiment ahead of Powell’s Jackson Hole address. Retail earnings from Walmart, Target, and others are in focus, while Trump–Zelenskiy talks on Russia add a geopolitical backdrop.

European shares edged lower on Friday as tech and financials weighed on the STOXX 600, while miners and healthcare advanced. ASML fell on weak demand and tariff concerns. The index still recorded its second weekly rise amid expectations of a U.S. rate cut.

The dollar index steadied near 97.8 on Monday ahead of Trump–Zelenskiy talks and Powell’s Jackson Hole speech. Markets largely expect a 25 bps September Fed cut, with odds of a bigger move fading after strong data. The euro held at $1.1702, reflecting cautious dollar strength amid geopolitical and policy uncertainty.

Oil prices slipped in Asian trade Monday, with Brent down 0.4% to $65.62 and WTI 0.2% lower at $62.66. Losses followed Trump’s softer stance with Putin, easing fears of tighter Russian supply. Markets now await Trump’s talks with Zelenskiy and European leaders for clarity on Ukraine and potential energy sanctions.

European leaders will today join Volodymyr Zelenskiy in Washington as Donald Trump urges Ukraine to accept a swift peace deal after talks with Vladimir Putin. Proposals reportedly involve Kyiv ceding Donbas for U.S. security guarantees. Europe seeks stronger commitments to bolster Zelenskiy, wary of concessions undermining Ukraine’s sovereignty and defence.

Fitch affirmed Romania’s "BBB-" investment-grade rating on Friday but kept a "negative" outlook, citing high deficits and political risks despite recent fiscal measures. The new coalition government faces tensions over spending cuts, with recession risks rising. Fitch forecasts the deficit easing to 7.4% this year, while growth slows to 0.7%.

Equities on the move

The following companies experienced moves in their share price driven by analyst ratings, quarterly earnings, or other news:

Meta is set to overhaul its AI strategy for the fourth time in six months, splitting Superintelligence Labs into four groups, including a new “TBD Lab” and its FAIR research arm, The Information reported. CEO Mark Zuckerberg is ramping up investment in AI and data centres, with capital spending forecast rising to as much as $72 billion.

OpenAI CEO Sam Altman revealed plans to explore acquiring Google Chrome, alongside trillion-dollar data centre investments and funding a brain-computer interface startup. He highlighted ChatGPT’s rapid growth to 700 million weekly users and suggested AI could run OpenAI within three years, despite acknowledging issues with the GPT-5 rollout.

UnitedHealth shares jumped nearly 12% after Berkshire Hathaway disclosed a $1.57 billion stake, signalling confidence in its long-term prospects despite recent struggles with rising costs, regulatory pressures and leadership changes. The investment, echoed by other hedge funds, offered psychological reassurance, though analysts warn challenges will persist over the next 18 months.

Accenture will acquire Australian cybersecurity firm CyberCX in its largest sector deal, valued at over A$1 billion. The move reflects rising demand for advanced digital security amid high-profile breaches. CyberCX, formed from 12 firms, employs 1,400 staff and has operations in Australia, New Zealand, London, and New York, strengthening Accenture’s global cyber capabilities.

Intel shares rose 3% on hopes of U.S. government support via the CHIPS Act. Federal backing could aid the struggling foundry business, but analysts warn it won’t resolve competitiveness gaps, weak AI chip presence, or quality issues in the 18A process, leaving the company’s market share under pressure.

Lyft shares rose 8.2% on Friday after co-founders Logan Green and John Zimmer announced they will leave the board next year and convert all Class B shares to Class A, creating equal voting rights. Sean Aggarwal becomes board chair, as governance changes aim to strengthen Lyft against rival Uber.

Hims & Hers Health shares fell 2.4% after reports that the FTC has been investigating the telehealth firm for over a year, focusing on whether it makes subscription cancellations difficult. No formal accusations have been made, and the company confirmed the inquiry was previously disclosed. The business relies heavily on recurring subscription revenue.

Standard Chartered shares fell 8.6% on Friday after U.S. Republican lawmaker Elise Stefanik requested a probe into alleged sanctions evasion. The bank denied the claims, calling them long-running and previously rejected by courts, and said it would fully cooperate with authorities. Shares had earlier surged to a near 12-year high on strong earnings.

Mizuho called Oracle a potential “structural AI winner,” citing surging demand for its AI infrastructure and database technology. With Oracle Cloud’s fast, cost-efficient GPU clusters and a full AI stack, the bank raised its price target to $300, forecasting 27% revenue CAGR to 2030, despite a 48% year-to-date gain.

DA Davidson upgraded Salesforce to Neutral from Underperform, citing the equity’s sharp decline this year as already pricing in business slowdown and competition. While the $225 price target is maintained, growth in its Agentforce AI may slow core cloud segments, with fiscal 2026-27 revenue projected at 8% and 7% respectively.

Morgan Stanley turned bullish on Apple, citing stronger-than-expected iPhone 16 and Pro Max sales, raising September-quarter production to 54 million units. The bank sees potential upside for December shipments and structural margin tailwinds, maintaining an Overweight rating with a $240 target, noting Apple could benefit from pricing leverage and a potential AI partnership.

Bank of America downgraded Applied Materials to Neutral from Buy, lowering its price target to $180, citing weak fiscal Q4 outlook and reliance on mature-node demand in China. Slower spending from Intel and market share losses to Lam Research and KLA weigh on growth, though upside exists if China licenses improve or capex rises.

HSBC downgraded Cisco to Hold from Buy, cutting its price target to $69, citing elevated valuation and slowing growth. Despite Q4 FY25 results in line with expectations, weaker-than-expected guidance, slowing backlog, and mixed AI and security performance suggest momentum is fading, with shares trading fairly at 17.2 times FY26 earnings.

Upcoming data and events

The week ahead features the Fed’s Jackson Hole Symposium, with Chair Powell’s remarks and FOMC minutes in focus for clues on US rate policy. Key housing data will also be released. Globally, flash PMIs from the US, Eurozone and UK, plus UK and Canadian inflation figures, will guide expectations on growth and monetary policy.

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