Market Commentary: Wednesday 20th August

Global equities paused after a record-breaking run, with technology stocks leading declines. Nasdaq futures fell 0.5% after the index’s sharpest drop since April’s tariff shock, while S&P 500 contracts slipped 0.3% and Euro Stoxx futures lost 0.6%. Asian shares retreated 0.8%, led by TSMC and SoftBank, though Chinese markets held firm near decade highs. Treasuries eased, pushing the 10-year yield to 4.32%. Oil gained 0.6%, gold edged higher, the dollar extended gains, and the New Zealand dollar weakened after the RBNZ cut rates by 25 bps.

Attention turns to Jackson Hole, where Powell is expected to outline the Fed’s framework and guide expectations for the September meeting. Markets continue to price in an ~80% chance of a 25 bps cut and at least one more by year-end. Positioning remains cautious ahead of Friday’s speech, with the rate trajectory still the key driver for sentiment.

On the geopolitical side, Trump urged Putin and Zelenskiy to show “flexibility” and prepare for a bilateral summit. While no breakthrough is expected in the near term, the prospect of talks has underpinned sentiment. With today’s data calendar light, focus remains firmly on Jackson Hole.

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