Most major US indices finished lower amid tech selling - Newsquawk Asia-Pac Market Open

US stocks were mixed and the major indices finished mostly lower with the declines led by the mega-cap tech stocks which resulted in the underperformance of the Nasdaq, with the FT citing the tech weakness to a MIT paper questioning returns from new technology and noted that “95 per cent of organisations are getting zero return” from their investments in gen AI", while Meta (META) was also reported to downsize its AI division and some executives are expected to leave. As such, Tech and Communication were the laggards weighing on the market, although the DJIA closed flat and the Equal Weight S&P 500 gained amid resilience in defensives such as Real Estate, Consumer Staples and Utilities.
USD eked slight gains amid the risk-off mood and with a lack of tier-1 data releases and Fed speak, while there was mixed housing data in which the forward-looking building permits fell more than anticipated, but the volatile housing starts unexpectedly soared higher and printed outside the top end of the forecast range. Nonetheless, it was a very quiet summer trading day as participants await the FOMC Minutes on Wednesday, and the Jackson Hole Symposium where Fed Chair Powell is set to speak on Friday at 10:00EDT.
Looking ahead, highlights include Japanese Machinery Orders & Trade Data, PBoC Loan Prime Rates, RBNZ Rate Decision & Press Conference, Comments from US President Trump on the Mark Levin Show (Radio), Supply from Australia.

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LOOKING AHEAD

Highlights include Japanese Machinery Orders & Trade Data, PBoC Loan Prime Rates, RBNZ Rate Decision & Press Conference, Comments from US President Trump on the Mark Levin Show (Radio), Supply from Australia.
Click for the Newsquawk Week Ahead.

US TRADE

US stocks were mixed and the major indices finished mostly lower with the declines led by the mega-cap tech stocks which resulted in the underperformance of the Nasdaq, with the FT citing the tech weakness to a MIT paper questioning returns from new technology and noted that “95 per cent of organisations are getting zero return” from their investments in gen AI", while Meta (META) was also reported to downsize its AI division and some executives are expected to leave. As such, Tech and Communication were the laggards weighing on the market, although the DJIA closed flat and the Equal Weight S&P 500 gained amid resilience in defensives such as Real Estate, Consumer Staples and Utilities.
SPX -0.57% at 6,412, NDX -1.39% at 23,385, DJI +0.02% at 44,922, RUT -0.77% at 2,277.
Click here for a detailed summary.

TARIFFS/TRADE

US Commerce Secretary Lutnick said chips need to be made in the US for national security reasons, while he commented that they cannot depend on Taiwan for chips and noted that they are weeks away from seeing any documents on Japan and Korea trade deals, according to CNBC.
US Department of Commerce added 407 product categories to steel and aluminium tariffs.
EU said it has sent back the draft trade joint statement to the US and work continues.

NOTABLE HEADLINES

Fed's Bowman (voter, dissenter) said she has not changed her views, while she noted that debanking is a problem in the financial system and the Fed will address debanking if more cases arise. Bowman also commented that de minimis crypto holdings would allow Fed staff to better understand crypto products and Fed staff should be allowed to own small amounts of crypto products. Furthermore, she stated that limits on Fed staff investment activities may hinder recruiting and retaining expert examiners.

DATA RECAP

US Housing Starts Number (Jul) 1.428M vs. Exp. 1.29M (Prev. 1.321M, Rev. 1.358M)
US Building Permits: Number (Jul) 1.354M vs. Exp. 1.386M (Prev. 1.393M)

FX

USD eked slight gains amid the risk-off mood and with a lack of tier-1 data releases and Fed speak, while there was mixed housing data in which the forward-looking building permits fell more than anticipated, but the volatile housing starts unexpectedly soared higher and printed outside the top end of the forecast range. Nonetheless, it was a very quiet summer trading day as participants await the FOMC Minutes on Wednesday, and the Jackson Hole Symposium where Fed Chair Powell is set to speak on Friday at 10:00EDT.
EUR softened as the early upward momentum in EUR/USD was gradually faded after stalling just shy of the 1.1700 level.
GBP slightly weakened after failing to sustain the 1.3500 status, while attention turns to incoming UK inflation data.
JPY mildly outperformed with USD/JPY dragged lower alongside softer US yields and the risk-off mood.
Canadian CPI Inflation MM (Jul) 0.3% vs. Exp. 0.3% (Prev. 0.1%)
Canadian CPI Inflation YY (Jul) 1.7% vs. Exp. 1.8% (Prev. 1.9%)
Canadian CPI Median (Jul) 3.1% vs. Exp. 3.1% (Prev. 3.1%, Rev. 3.0%)

FIXED INCOME

T-notes caught a bid as downbeat sentiment boosted haven demand, while the attention turns to the FOMC Minutes and Jackson Hole.

COMMODITIES

Oil prices were lower with the energy complex weighed on by the broader risk-off sentiment.
US Private Inventory Data (bbls): Crude -2.4mln (exp. -1.8mln), Distillate +0.5mln (exp. +0.9mln), Gasoline +1.0mln (exp. -0.9mln), Cushing -0.1mln.
Iraq signed an agreement with Chevron (CVX) for a project that consists of four exploration blocks and development of other oil fields.
Delivery route for Kazakhstan oil exports via Russia's Druzhba pipeline was briefly disrupted after Ukrainian attacks on infrastructure, although oil supplies to Germany via the pipeline have not been restricted.
US President Trump said it is 'so sad' that opponents are trying to delay the Resolution copper project in Arizona, while he added 'our country needs copper, and now' and an appeal of the Arizona copper mine ruling will take place.

GEOPOLITICAL

MIDDLE EAST

Israeli PM Netanyahu said "no" to the Hamas-approved latest Gaza proposal, according to Al Arabiya.

RUSSIA-UKRAINE

US President Trump said he hopes Russian President Putin is going to be good and if he's not, it's going to be a rough situation, while he said Zelensky has to show some flexibility and thinks Putin and Zelensky are doing okay. Trump said they are going to find out about Russian President Putin in the next couple of weeks and said Ukraine is going to get a lot of land, when asked about land swaps.
White House Press Secretary said Russian President Putin has agreed to begin the next stage of the peace process, while US Secretary of State Rubio, VP Vance and US Envoy Witkoff will coordinate with Ukraine. It was separately reported that the White House is eyeing Budapest, Hungary for peace talks with Ukrainian President Zelensky and Russian President Putin, according to Politico.
Russian President Putin proposed to US President Trump to meet with Ukrainian President Zelensky in Moscow, according to Sky News Arabia citing AFP.
Switzerland reportedly offered Russian President Putin immunity and is ready to host peace talks, according to Politico.
Senior officials from the US, Ukraine and several European countries are expected to work in the coming days on a detailed proposal for security guarantees for Ukraine, likely involving US air power, according to Axios citing sources.
EU's Costa said security guarantees for Ukraine will be formalised in the coming days and as soon as this week.
Coalition of the Willing planning teams are to meet with US counterparts in the coming days to further strengthen plans to deliver robust security guarantees to Ukraine, while leaders also discussed further pressure, including sanctions.
US Joint Chiefs of Staff Chairman is expected to take part virtually in a meeting with European military leaders on Ukraine in the coming days, according to officials cited by Reuters.
NATO leaders and Ukraine meeting is set to take place on Wednesday, according to Reuters.
EU Foreign Policy Chief Kallas said the next sanctions package against Moscow should be ready by next month.

ASIA-PAC