Sunday, August 23

The dominant market story remains the aftershock from last week’s bond selloff: the US 30-year yield briefly exceeded 5.30% and finished near 5.27%, its highest level since 2007. The move reflects a combination of Middle East risk, higher oil prices, renewed inflation expectations and growing concern over fiscal sustainability, rather than a fresh macroeconomic surprise in the past day.

That repricing is spreading across assets. WTI is holding around $86–87 a barrel after gaining roughly 4.8% last week, while US equities weakened, led by the Nasdaq, as higher discount rates collided with heavy AI-related debt issuance. Gold rose about 3.1% on the week to roughly $4,513, while the dollar index slipped to around 98.8, suggesting the bond shock is not translating into straightforward dollar strength. Bitcoin’s rise above $73,700 further reflects the liquidity and cross-asset consequences rather than a discrete crypto catalyst.

Attention now turns to Treasury bill auctions and the perceived effectiveness of recent buyback activity, followed by Jackson Hole, core PCE and GDP. NVIDIA’s earnings will also test whether AI demand can offset the valuation damage from higher long-term financing costs.

The US-Iran rupture remains the clearest geopolitical transmission mechanism into markets. The ceasefire has officially collapsed, President Donald Trump says talks are not taking place, and Brent had reached around $92 a barrel earlier in the week. The next potential catalyst is Treasury Secretary Bessent’s scheduled Monday update on strengthening sanctions, framed around economically pressuring Iran; no detailed sanctions package has yet been announced.

India is particularly vulnerable because the oil shock is arriving alongside an already weakened equity trend. The Nifty 50 ended the prior week at 24,252, below its roughly 24,750 200-day moving average, while RSI near 38–40 indicates near-oversold conditions. Its seven-session losing streak has broken, but the market is still being framed within a 23,750–24,500 range. Banks provided a limited offset: Nifty Bank rose 0.46% to 57,761.95 and the financial-services index gained 0.22%.

The implication is asymmetric: a softer sanctions message could allow beaten-down EM assets to stabilize, while further escalation would combine higher energy costs with pressure on long-duration Treasuries and India’s oil-sensitive equities.