The session got off to a cautious start in the U.S., where a plunge in semiconductor stocks set the tone for the market; the Nasdaq fell 0.5% and the S&P 500 dropped 0.2%, while the Dow Jones managed a slight gain of 0.1%. The sell-off in chip stocks came days before Nvidia’s earnings report, after reports emerged that prices for servers equipped with AI chips would rise by more than 15% in many cases, which sent memory stocks tumbling and dragged down Asian markets as well, with the Kospi losing 3.1% and the CSI 300 1.2%, while the Nikkei fell 0.7% and the Stoxx 600 remained flat. In commodities, WTI fell 2.6% to $84.8 and Brent fell 2.6% to $91.9, following Treasury Secretary Scott Bessent’s announcement of an “unprecedented” campaign to isolate Iran from the global economy, warning of sanctions against any country doing business with Tehran. Gold rose 0.5% and silver fell 0.9%. On the fixed-income front, yields fell across the curve amid the decline in crude oil prices, which provided a boost to bonds: the 10-year UST fell 3.7 bps and the 30-year UST 4.6 bps, more than the 2-year UST (-0.8 bps), creating a slight bull flattener (yields fall, with long-term yields falling more than short-term ones, flattening the curve). The 10-year Bund fell 0.7 bps, and the 10-year Gilt fell by the same amount. The market is also beginning to look toward Jackson Hole, where Fed Chairman Kevin Warsh will speak on Friday for the first time since taking office, at a time when clarity is expected on how the Fed will react to inflation that remains elevated, albeit with signs of cooling. On the FX and volatility front, the DXY rose 0.2% to 99.0, and the VIX rebounded 0.6 points to 15.7.

The short- and medium-term segments of the sovereign yield curve remained virtually flat, while the long end fell by 0.1 points. The PDVSA yield curve closed flat, with bids for PDV'20 at 109.5 but no trading activity, and volumes remaining extremely low.

Latin American yield curves closed with broad-based gains, in line with the bond rally triggered by the drop in oil prices. Mexico, Brazil, and Pemex each rose 0.3 points; Colombia also rose 0.3 points; Ecuador rose 0.2 points, as did the Dominican Republic; and Argentina and El Salvador rose 0.1 points. Average volume.