27 August 2026

Hotter-than-expected U.S. PCE inflation and rising rate-hike expectations pushed Wall Street slightly lower. A third consecutive decline in oil prices eased inflation concerns, while strong after-hours results from Nvidia, Salesforce and CrowdStrike lifted sentiment across AI and software stocks.

S&P 500 fell 0.02% to 7,675.70

Dow Jones fell 0.21% to 53,463.88

Nasdaq fell 0.08% to 26,130.20

The 2-year U.S. Treasury yield rose approximately 2 basis points to 4.22%.

The 10-year U.S. Treasury yield rose approximately 2 basis points to 4.65%.

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News

1. Iran and Oman Reach Hormuz Framework as Oil Falls for a Third Day; U.S. Tariffs Add Midterm Election Pressure

• Iran and Oman reached a framework agreement covering shipping routes and revenue sharing in the Strait of Hormuz.

• Under the preliminary arrangement, commercial vessels entering the Persian Gulf will pass through Iranian waters, while outbound vessels will use Iranian and Omani waters. Warships will not be permitted.

• This is only a temporary arrangement and does not mean that the strait will immediately reopen fully. Both countries will negotiate a permanent route over the next 30–60 days.

• De-escalation hopes pushed Brent crude lower for a third consecutive day. Brent has fallen more than 9% this week to around US$86 per barrel.

• Gulf producers are accelerating shipments, with around seven tankers loading Iraqi crude with a combined capacity of approximately 13 million barrels.

• Separately, Trump imposed 50% tariffs on around US$20 billion of Canadian goods, prompting Canada to raise retaliatory tariffs on U.S. steel, aluminium and other products.

• Trump also expanded duty-free quotas for selected beef imports, drawing opposition from U.S. ranchers and Republican lawmakers and potentially affecting key Senate races.

Market Impact: Lower oil prices could ease inflation and bond-yield pressure, but escalating U.S.–Canada trade tensions may raise the cost of selected goods and increase policy and election uncertainty.

Positive View: The Iran–Oman framework shows that both sides are looking for a path towards de-escalation. A permanent shipping route could further reduce the geopolitical risk premium in energy prices.

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2. U.S. PCE Inflation Comes in Slightly Hotter as Real Consumer Spending Stalls

• Headline PCE inflation increased 0.2% month-on-month in July, above the 0.1% forecast, while annual inflation reached 3.7% versus the 3.6% consensus.

• Core PCE rose 0.2% month-on-month and 3.3% year-on-year, in line with expectations, but showed little improvement from previous months.

• Nominal consumer spending increased 0.2%, while inflation-adjusted real spending was unchanged, indicating that higher prices continued to erode purchasing power.

• Personal income increased 0.4%, above expectations, although private- and public-sector wage growth slowed and the savings rate recovered.

• Following the data, markets raised the probability of a September Fed rate hike to around 40%. Attention now turns to Fed Chair Kevin Warsh’s Jackson Hole speech on Friday.

Market Impact: Persistent inflation and rising short-term Treasury yields could pressure highly valued growth stocks, while slowing consumption and business investment increase concerns about economic weakness.

Positive View: Softer real consumption and falling oil prices could reduce future inflationary pressure, giving the Federal Reserve more time to assess incoming data.

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3. Nvidia Doubles Revenue and Delivers Powerful Forward Guidance

• Nvidia’s fiscal second-quarter revenue reached US$96.22 billion, up 106% year-on-year and above market expectations of approximately US$92.2 billion.

• Data-centre revenue climbed 117% to US$89 billion and remained the company’s primary growth engine.

• Adjusted earnings per share came in at US$2.22, above the US$2.09 forecast, while gross margin held at 75%.

• Nvidia expects third-quarter revenue of approximately US$108 billion, above the consensus estimate of around US$104.2 billion and marking its first quarter above US$100 billion.

• Management expects revenue to grow approximately 70% next fiscal year, significantly above the market’s previous estimate of around 45%.

• Amazon plans to deploy an additional two million Nvidia GPUs during 2027 and 2028, further reinforcing the strength of AI-computing demand.

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4. Salesforce and CrowdStrike Deliver Strong Results as AI Monetisation Expands into Software and Cybersecurity

• Salesforce’s fiscal second-quarter revenue increased 11% to US$11.35 billion. Current remaining performance obligations, or cRPO, rose 14% to US$33.5 billion, indicating a healthy future order pipeline.

• Annual recurring revenue from Agentforce and Data 360 increased more than 210% to nearly US$3.9 billion, showing that enterprise customers are beginning to pay for AI tools.

• Salesforce expects third-quarter revenue of US$11.42–US$11.50 billion and raised its full-year revenue forecast to US$46.1–US$46.4 billion. Its shares rose approximately 14% after hours.

• Salesforce also expanded its partnership with Anthropic through Claudeforce, which connects Claude directly with Salesforce’s sales, customer-service and marketing workflows.

• CrowdStrike’s second-quarter revenue increased 26% to US$1.47 billion, above the US$1.44 billion forecast. Adjusted earnings of US$0.31 per share also exceeded expectations.

• CrowdStrike’s annual recurring revenue grew 25% to US$5.84 billion, while net new ARR surged 51% to US$333 million. Free cash flow reached US$377 million.

• CrowdStrike forecast third-quarter revenue of US$1.523–US$1.529 billion and raised its full-year revenue and net-new-ARR outlook. Growing AI-related cyber threats helped lift its shares by more than 10% after hours.

Market Impact: Together with Nvidia’s revenue doubling and 70% forward-growth guidance, Salesforce and CrowdStrike show that AI demand is expanding beyond chips into enterprise software and cybersecurity. However, these strong results also raise the market’s expectations for future growth and monetisation.

Positive View: Nvidia provides the computing power, Salesforce converts that power into enterprise workflows and revenue, while CrowdStrike protects the applications and data. Together, the results support a complete AI revenue cycle—from hardware investment to software adoption, commercial monetisation and cybersecurity.

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5. Meta Settles Social-Media Addiction Lawsuits for Up to US$18 Billion

• Meta agreed to pay up to US$18 billion to settle claims brought by most U.S. states over alleged social-media addiction among children using Facebook and Instagram.

• Payments will be spread over ten years, with approximately US$12.7 billion guaranteed. The remaining amount depends partly on whether competing platforms introduce similar protections.

• Meta will restrict teenage usage to two hours per day and block access between midnight and 6 a.m. without parental consent.

• The company will also disable most notifications during school hours, strengthen age verification and parental controls, and restrict visible like counts and certain beauty filters.

• Meta denied wrongdoing, and the agreement remains subject to court approval. The company also continues to face separate lawsuits from individuals, schools and local governments.

Market Impact: Meta will face a substantial cash cost and stricter operating restrictions affecting how younger users engage with its platforms.

Positive View: The settlement removes the tail risk of potential penalties that Meta previously estimated could reach as high as US$1.4 trillion.

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Daily Watchlist

Key Developments

• Markets will digest after-hours earnings from Nvidia, Salesforce, CrowdStrike and Okta.

• The Jackson Hole Economic Policy Symposium moves into focus, with Fed Chair Kevin Warsh scheduled to speak on Friday.

• Investors will monitor the implementation of the Iran–Oman Hormuz framework and whether oil prices can extend their decline.

Major U.S. Data

• Weekly initial jobless claims, with approximately 208,000 claims expected.

• July advance goods trade balance.

• July wholesale and retail inventory estimates.

• August Kansas City Fed manufacturing index.

U.S. Technology Earnings

• Marvell Technology (MRVL) — After market close

• Workday (WDAY) — After market close

• Autodesk (ADSK) — After market close

• IREN (IREN) — After market close

Sources: Reuters, WSJ, PBS, U.S. Census Bureau and MarketWatch.