US equities end week lower ahead of NVIDIA results, inflation data and new Iran sanctions

US equities fall as Treasury buyback plan unnerves bond markets

United States (US) equity markets closed higher on Friday after purchasing managers' index (PMI) data showed US business activity expanding at its strongest pace in more than four years. Despite the rise, the three key US indices all finished the week lower, driven by higher energy prices and rising bond yields, which attracted the attention of the US Treasury Department.

Just two weeks after releasing its schedule for buying back older Treasury securities, the US Treasury Department announced it would 'at least double' its planned purchases of outstanding 10-year - 30-year debt.

While the buybacks are not quantitative easing (QE) per se, because there is no net liquidity injection into the system, the announcement has unnerved investors. By effectively drawing a line in the sand on long-end yields, the Treasury has given markets a target to shoot for. That has generated credibility concerns and was behind the strong return of the debasement trade last week, which saw flows out of the US dollar (USD) and into gold, silver and Bitcoin.

NVIDIA earnings, inflation and sanctions in focus

Over the weekend, reports emerged that NVIDIA has notified customers of artificial intelligence (AI) server price hikes of more than 15% in many cases as memory costs soar. The move comes ahead of NVIDIA's second quarter (Q2) results on Thursday morning AEST, where consensus expects around $2.08 earnings per share (EPS) and revenue of $92 billion. Below the headline numbers, the real focus will be on guidance, data-centre demand and how soaring memory costs might impact margins expected to be around the 75% level.

Aside from earnings reports, there will be interest in the Federal Reserve's (Fed) preferred measure of inflation, the core personal consumption expenditures (PCE) price index, previewed below. Finally, there will be keen interest in Treasury Secretary Bessent's press conference later today, where he is expected to announce a sanctions package on Tehran and countries that conduct trade with Iran. How Iran responds to this in terms of choosing to de-escalate or re-escalate will have a strong say on energy prices and risk sentiment in the sessions ahead.

Core PCE price index MoM (July)

Date: Wednesday, 26 August at 10.30pm AEST

For June, the annual headline PCE inflation rate rose by 3.7% year-on-year (YoY), easing from 4.1% in May. The Fed's preferred inflation gauge, the core PCE price index, eased to 3.3% from 3.4%, still well above the Fed's 2% target. With the September Federal Open Market Committee (FOMC) meeting now less than a month away, Wednesday's July core PCE price index release will carry weight.

Consensus expects core PCE to rise 0.2% month-on-month (MoM) in July, leaving the annual rate unchanged at 3.3%. A hotter-than-expected print would lift the probability of a September hike from the Fed, while a softer reading would help temper those expectations and support the view that the Fed can afford to remain patient.

The US interest rates market starts this week pricing in 10 basis points (bp) of rate hikes for the Fed's September meeting and a total of 25 bp of tightening for the remainder of 2026.

US core PCE inflation annual chart

Nasdaq 100 technical analysis

From its late-March low of 22,841, the Nasdaq 100 launched a powerful 35% rally in just over nine weeks to reach a record high of 30,762 in early June. The correction that followed into the late-July low of 27,176 played out largely as expected.

In early August, we declared the correction complete and shifted to a bullish bias after the index's sharp rebound in late July and its close above 28,500. However, last week's rejection from trend channel resistance at 30,200 was a setback to this view.

Nonetheless, as long as the Nasdaq 100 holds above short-term support at 28,800ish, we will stay with the bullish view, aware that a sustained break below 28,800ish would open the way for a retest of trend channel support now near 27,600.

Nasdaq 100 daily candlestick chart

Dow Jones technical analysis

From its late-March low of 45,063, the Dow Jones staged an impressive and orderly rally of 9686 points (+21.40%) into the August 54,749 high. Within that rally, pullbacks in June and July of around 3.5% held logical support zones (at 50,000 and 51,500) before the index regrouped and pushed on to fresh record highs.

Last week saw another pullback of a similar magnitude, with the Dow Jones hitting a low of 52,760 on Thursday before a sharp rebound on Friday. Providing the Dow Jones remains above last week's 52,760 low, it keeps the uptrend intact and with it scope for another leg higher towards 56,000.

Aware that a sustained break below the 52,750 support zone, however, would signal that a deeper decline is underway, opening the way for a retest of 51,500 and potentially 50,000.

Dow Jones daily candlestick chart

• _{Source: TradingView. The figures stated are as of 24 August 2026. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation.}