TL;DR

Fed signals steady QT; IBKR joins S&P 500; U.S.–Korea finalize $350B trade, LNG, and investment deal.

Highlights

• Dallas Fed’s Logan supports further balance sheet reduction; NY Fed’s Williams sees neutral rate anchored near pre-pandemic levels1.
• White House denies imminent mRNA COVID-19 vaccine withdrawal, but policy uncertainty weighs on vaccine makers2.
• Interactive Brokers to join S&P 500 on Aug. 28, replacing Walgreens after its private-equity buyout; IBKR shares rally post-market3.
• U.S. and South Korea finalize trade pact: Seoul to invest $350B in U.S.-controlled assets, buy $100B in U.S. LNG; most tariffs held at 15%4.
• Arabica coffee futures rise for ninth session on U.S. tariffs and tight supply; Brazil seeks tariff reversal5.
• Korean Air reportedly set to order about 100 Boeing jets, signaling strong U.S. aerospace demand6.
• Saudi AI firm Humain starts data center construction with Nvidia chips, pending U.S. export clearance7.
• Venezuela deploys 15,000 troops to Colombia border as U.S. Navy increases regional presence8.
• Trump administration to double Chinese student visas to 600,000, reversing recent restrictions9.
• Trump backs away from unilateral National Guard deployment to Chicago; federal aid to city continues1014.
• California GOP files new suit to block Newsom’s redistricting plan, which could shift up to five House seats11.
• Trump proclaims Aug. 26 Abbey Gate Remembrance Day; Pentagon targets mid-2026 for Afghanistan withdrawal report1213.

Commentary

Fed officials maintained a cautious tone, with Logan advocating for further balance sheet reduction and Williams reiterating that the neutral rate remains anchored near its pre-pandemic level1. This suggests the Fed is likely to proceed with quantitative tightening, but without abrupt changes to the policy rate outlook. Fixed income markets should expect gradual liquidity withdrawal, but no immediate rate volatility.

In equities, Interactive Brokers ’ S&P 500 inclusion will drive index-related flows, with passive funds rebalancing out of Walgreens. The finalized U.S.–South Korea trade deal secures significant Korean investment in U.S. assets and energy exports, supporting U.S. LNG and industrial names34. Korean Air’s potential 100-jet order is a clear positive for Boeing and the broader U.S. aerospace sector6.

Healthcare remains in focus as the White House denied reports of an imminent mRNA COVID-19 vaccine withdrawal, but ongoing policy reviews and halted grants keep pressure on vaccine makers2. Commodities traders are watching arabica coffee, which extended its rally on U.S. tariffs and supply issues; Brazil’s legal challenge adds a potential catalyst for volatility5.

International headlines add to the risk landscape: Venezuela’s border troop deployment and U.S. naval presence could affect regional sentiment8, while Saudi Arabia’s AI ambitions—pending U.S. chip export approval—highlight ongoing demand for U.S. semiconductors7. Domestically, political developments in California’s redistricting and urban crime policy debates could impact sentiment in select sectors, but are unlikely to move broad markets near term101114.