Top U.S. Stories

  • Fed Chair Kevin Warsh used his Jackson Hole keynote to warn that “underlying” inflation trends have not improved and that the central bank “will have work to do” if it is not confident price growth is heading back to 2%. He again refused to offer forward guidance. (Federal Reserve)
    • Why it matters: The debate has shifted from “when will the Fed cut” to “could the Fed hike.” CME-based gauges put the odds of a September increase at roughly 57–60%, up from about 35% before the speech, and the 2-year Treasury yield jumped about 11 basis points to 4.34%.
  • Stocks fell Friday but held onto weekly gains. The S&P 500 slipped 0.25% to 7,711.76, the Nasdaq lost 0.52% to 26,402.42 and the Dow eased 9.45 points to 53,559.99; for the week all three rose about 0.5–0.9%, the Dow’s first winning week in three. (CNBC)
  • President Trump announced a deal giving the U.S. effective control over more than 65 billion barrels of Venezuelan oil reserves, calling it “the biggest oil deal in world history” and saying it would help lower gasoline prices. (CNBC)
    • Why it matters: With the Strait of Hormuz still largely impassable amid the U.S.–Iran conflict, fuel costs are a growing political pressure point, and new supply arrangements feed directly into the inflation picture the Fed is watching.
  • Nvidia shares surged nearly 9% after the company reported record quarterly revenue of about $96.2 billion, up 106% from a year earlier, and a strong forward outlook. (TipRanks)
  • The U.S.–Iran conflict passed the six-month mark with no resolution; Trump said mines in the Strait of Hormuz had been cleared and warned that any vessel laying new ones would be destroyed. (Britannica)

Markets

Warsh’s hawkish tone pushed short-term yields higher and dragged equities lower on Friday, though the week still finished in the green. The dollar strengthened broadly; the yen fell toward 160 per dollar (about 159.68 on an ECB reference basis for Aug. 28), a roughly one-month low, as investors marked down the chance that a narrower U.S.–Japan rate gap would support the currency. WTI crude held near $83 a barrel, elevated by the Hormuz disruption, with the Venezuela announcement capping gains. Japan’s Nikkei 225 closed Friday up 0.61% at 66,532.02, lifted by Nvidia’s rally.

Stocks in Focus

  • Nvidia / semiconductors: Record results and upbeat guidance lifted AI-linked names worldwide, though chip stocks also saw profit-taking into Friday’s close.
  • Energy: Crude stayed firm on the Hormuz standoff even as the Venezuela deal raised questions about future supply.
  • Banks: Rising odds of higher rates in both the U.S. and Japan favor lenders’ margins, while higher yields weigh on rate-sensitive housing and high-dividend shares.

Not a recommendation to buy or sell any security.

Compass Insight

Friday’s action rehearsed a scenario markets have spent 2026 trying to avoid: a Fed that talks about hiking rather than cutting. Warsh’s refusal to guide leaves investors pricing policy meeting by meeting, and the September 15–16 FOMC is now a genuine coin flip. That uncertainty is doing real work on the yen, which is sliding despite an all-but-certain Bank of Japan hike this month, because the dollar side of the equation keeps shifting. For households, the channel to watch is financing costs: mortgage and short-term borrowing rates tend to follow the 2-year yield, and a weaker yen feeds imported energy and food prices in Japan. Near term, the two central-bank meetings are the pivot. Longer term, the contest is between AI-driven earnings strength—on display in Nvidia’s numbers—and the drag from a higher-for-longer rate regime. Planning around the second of those, rather than betting it away, looks prudent.

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Auto-generated and AI-written. Not investment advice.