The Prime Daily: 31 August 2026

Authored By Prime Research | Published at: Aug 31, 2026 09:41 AM IST

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Warsh’s Jackson Hole Warning Rattles Yields

U.S. equities closed the week modestly higher, recovering from mid-week volatility tied to inflation data, Treasury buyback operations, and Fed Chair Kevin Warsh’s remarks at the Jackson Hole Symposium. The S&P 500 gained 0.5%, while the Nasdaq and Dow each added 0.4%.

Warsh maintained a data-dependent tone at Jackson Hole, reaffirming the 2% inflation target without providing explicit forward guidance. He stated the Fed “must be confident that underlying inflation is moving to our objective, clearly and at sufficient speed” comments markets read as hawkish, lifting expectations of a rate hike at the September 16 Fed meeting. Higher rates are a headwind for emerging markets, including India.

Short-term Treasury yields rose in response: the 2-year yield climbed to 4.35% Friday afternoon from 4.23% at Thursday’s close. Equities came under mild pressure, and the Russell 2000 fell 1.4% on the day.

Nvidia’s strong quarterly results and revenue guidance drove major tech indices higher, though the broader semiconductor sector lagged, with the VanEck Semiconductor ETF slipping on doubts about the long-term returns on AI capital spending.

The dollar posted its sharpest daily gain in two and a half months on rate-hike expectations, while safe havens sold off spot gold fell more than 3% and silver over 4%. Crude oil rebounded from earlier weekly declines after U.S. strikes on Iranian rocket launchers near the Strait of Hormuz raised geopolitical risk.

US Q2 GDP grew at an annualised 1.5%. Long-dated Treasury yields rose early in the week before easing on expanded Treasury buybacks of long-term debt.

Indian benchmarks traded range-bound amid high intra-week volatility, ending modestly lower and extending their consolidation to a fourth straight week.

The Nifty 50 fell 76 points (0.3%) last week, the Sensex closed 0.4% lower, while broader markets outperformed the BSE 150 Mid-Cap rose 0.3%, and the BSE 250 Small-Cap gained 0.2%.

The monsoon deficit narrowed sharply to 13% by late August, easing concerns over rural demand and food inflation.

Escalating US-Iran fighting has been the dominant overnight catalyst, pushing oil prices sharply higher and denting risk appetite.

Asian markets fell broadly on Monday Japan’s Nikkei down ~2%, Nasdaq futures off 0.5% as elevated bond yields compounded the risk-off tone.

DIIs continued to structurally absorb supply, offsetting FII selling FIIs were net sellers of ~Rs 150 crore, against DII inflows of ~Rs 12,500 crore.

India’s Q1 FY27 GDP data, due today, is the week’s key domestic trigger and will shape risk sentiment on Dalal Street as investors gauge the pace of growth heading into the new fiscal quarter.

Beyond GDP, markets will track the US jobs report, the ISM Manufacturing PMI (September 1), FII/DII flows, and monthly auto sales for reads on consumption trends.

Indian equities are poised for a subdued opening amid negative global cues.

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