Top stories from global financial media overnight and this morning include: 1. Bessent says heightened US economic pressure on Iran likely prevents a return to large-scale military action. 2. Jackson Hole preview: Warsh's inaugural address as chair, markets seek a reaction function, not a payment theme. 3. 319 million shares unlocked, SpaceX stock slips back near its IPO price. 4. Wal-Mart's US same-store sales hit a six-year low, shares plunge about 9%. 5. Citi turns bearish on the dollar in the near term, having previously flagged Treasury buyback risks. 6. JPMorgan warns the Treasury's doubled long-dated bond buybacks could lift, rather than lower, yields.
US Treasury Secretary Scott Bessent stated that the Trump administration's plan to cripple Iran's economy could render a large-scale military operation against the Islamic Republic unnecessary. President Donald Trump said the US would impose significant economic penalties on any nation providing "any form of lifeline" to Tehran, aiming to strangle Iran's economy. Bessent remarked, "This will be the largest coordinated economic isolation effort in human history."
The Kansas City Fed's Jackson Hole Economic Policy Symposium is scheduled for August 27–29 at the Jackson Lake Lodge in Wyoming. The official theme is "Financial Innovation: Implications for Payments and Policy," with approximately 120 invited participants. Chair Kevin Warsh is set to deliver his inaugural Jackson Hole keynote on the morning of August 28, just about 18 days before the September 15–16 FOMC meeting. Following his efforts to streamline statements, eliminate the dot plot, and reduce forward guidance, this speech offers the clearest public anchor for the autumn policy path.
SpaceX shares faced another unlock-related decline, sliding back toward its IPO price. Approximately 319 million shares held by early employees and investors became eligible for trading on Thursday. This marks the 70th tranche of a staggered lockup release plan, which by 2027 will unlock about 88% of SpaceX's total 13 billion shares. SpaceX shares fell 4.05% in early trading, breaking below the $135 IPO price.
Wal-Mart delivered a second-quarter report that looked strong on paper but failed to impress the market: revenue of $187.9 billion, up 5.9%, and adjusted earnings per share of $0.81, both beating Wall Street estimates, while the company also raised its full-year sales and profit guidance. However, what drove pricing was US same-store sales excluding gasoline, which rose just 2.6%—the slowest pace since the early pandemic period in 2020—along with a softer-than-expected third-quarter outlook. Shares closed Thursday at $103.84, down 9.15%, with volume of about 83.15 million shares, marking the steepest single-day drop since May 2022 and the biggest drag on the Dow that day. This wasn't a "bad" earnings report, but one that laid bare the cracks in US middle- and lower-income consumer spending.
Citi's foreign exchange strategists have turned bearish on the dollar in the near term. The team believes markets are positioning for a less hawkish Federal Reserve, the US midterm elections, and an expanded Treasury buyback program. Strategists led by Daniel Tobon wrote in a Thursday research note that they have cut their three-month dollar index forecast from 102.12 to 98.34. This follows Citi's earlier warning that Treasury Secretary Scott Bessent's efforts to lower long-term borrowing costs by expanding repurchases of 10- to 30-year bonds could come at the dollar's expense. The dollar index stood at 98.9, roughly flat, after hitting its lowest level since May in the previous session.
The US Treasury suddenly announced Wednesday it would at least double the liquidity support repurchase cap for 10- to 30-year nominal bonds, aiming to stem a rise in long-end yields that had reached nearly 20-year highs. Markets initially sold off then rallied: the 30-year yield briefly fell about 9 basis points, but by Thursday nearly all of that decline was erased, with the 10-year yield back around 4.70%. JPMorgan's rates strategy team then issued a harsher assessment—the move only treats symptoms without addressing a fiscal deficit still near 6% at near-full employment; if interpreted as a departure from "regular and predictable" debt management, term premiums could actually rise.