TL;DR

Powell to overhaul Fed policy; Nvidia earnings to test AI rally; Intel gets $8.9B US stake.

Highlights

• Fed Chair Powell is expected to announce a reversal of the Fed’s 2020 inflation framework at Jackson Hole, ending the “average inflation targeting” approach and explicit bias toward low unemployment 1.
• U.S. government converts $8.9B in grants into a 10% equity stake in Intel ; deal includes warrants for up to 5% more if Intel loses foundry control 2.
• Nvidia ’s Q2 earnings Wednesday are a key test for the AI-driven equity rally, with guidance under scrutiny due to new U.S. restrictions on China AI chip sales 3.
• U.S. equity futures steady near record highs after last week’s rally; CME FedWatch shows 84% probability of a September rate cut 4.
• US investment-grade credit spreads tighten to 0.75% over Treasuries, lowest since 1998, as margin debt and federal borrowing hit new records 12.
• Bitcoin dropped 4% to ~$110,700 in a flash crash, wiping out $3B in crypto derivatives open interest 18; US spot Bitcoin ETFs saw $1.2B in outflows last week, while Ethereum funds attracted inflows 15.
• Stablecoin supply has doubled to $270B YTD, driven by emerging market demand and Ethereum/Tron dominance 20.
• DHL, La Poste, and India Post suspend most parcel shipments to the U.S. ahead of new tariffs and customs rules taking effect August 29, disrupting global e-commerce flows 13.
• Geopolitical risks: U.S. blocks Ukraine from long-range missile strikes inside Russia 6; Ukrainian drones hit Russian energy/nuclear sites 11; North Korea escalates missile activity 7; Israel strikes Houthi targets in Yemen 9.
• Venezuelan President Maduro mobilizes 4.5M militia as U.S. Navy destroyers approach, raising regional security concerns 10.
• Texas AG investigates Meta and Character AI over child safety and data practices in mental health chatbots 14.

Commentary

Markets begin the week with U.S. equity futures holding near record levels, supported by last week’s rally following Powell’s dovish signals at Jackson Hole 4. However, the expected overhaul of the Fed’s 2020 inflation strategy—ending average inflation targeting and the explicit focus on low unemployment—introduces new uncertainty around the central bank’s reaction function 1. While the probability of a September rate cut has risen to 84% 4, traders should watch for further clarity from Powell’s remarks and Friday’s core PCE inflation data.

Nvidia ’s earnings on Wednesday are likely to set the tone for tech and broader equity sentiment 34. With options markets pricing a significant move, investors will focus on data center revenue, management’s outlook, and the potential impact of new U.S. restrictions on China-related AI chip sales 3. Intel ’s government-backed recapitalization signals a shift in U.S. industrial policy, with the Treasury taking a 10% stake and securing additional warrants—an approach that could influence future tech subsidies and sector dynamics 2.

Credit markets are showing signs of exuberance, with investment-grade spreads at multi-decade lows and margin debt at record highs, even as Treasury yields widen and government borrowing accelerates 12. The compression in risk premiums suggests limited buffer if macro conditions deteriorate or if Fed policy surprises to the upside.

Crypto markets remain volatile: Bitcoin ’s flash crash and heavy ETF outflows highlight fragility 1815, while stablecoin and Ethereum -linked products continue to attract capital, especially from emerging markets 2015. The rotation from Bitcoin into Ethereum and stablecoins suggests shifting risk appetite, but the space remains sensitive to liquidity events and regulatory headlines.

Geopolitical developments—ranging from U.S. restrictions on Ukraine’s use of long-range missiles 6, to North Korean 7 and Middle East tensions 9, to Venezuela’s militia mobilization 10—add background risk for commodities and select equities. Meanwhile, the suspension of international parcel shipments to the U.S. ahead of new tariffs is a near-term headwind for global e-commerce and logistics operators 13. Traders should monitor Nvidia ’s results, PCE inflation, and any escalation in geopolitical events as primary catalysts this week.