The Treasury is now buying its own bonds to keep the long end quiet, and gold is having its best month since 1999. Good morning and welcome to today's market chronicle. It's Tuesday, August 25, 2026.
Yesterday's close was the kind of session that looks calm from a distance and is not. The S&P 500 slipped 0.28% to 7,653, the Nasdaq gave up 0.76% to 25,980, and the Dow actually rose 0.26% to 53,417, which is what happens when money leaves chips and hides in companies that make physical objects. Nvidia ($NVDA) fell 2.9% ahead of Wednesday's earnings, Micron ($MU) shed 5.8%, Broadcom ($AVGO) and Advanced Micro Devices ($AMD) came along for the ride. The stated reason is prudence before the print. Translation: nobody wants to be the manager who held the whole position into the one number that matters. Meanwhile Uncle Donald promised 50% tariffs on Canadian cars, trucks and parts from January 1 after weekend talks collapsed, and Ford ($F) and General Motors ($GM) dutifully fell. Scott Bessent rolled out the Iran sanctions package, styled "Operation Economic Outcast," which is a name somebody was paid to produce.
But here is the part everyone is pretending not to notice. The Treasury doubled its long bond buybacks last week, floated funding them out of a near trillion dollar cash account, and the rally that bought lasted roughly one afternoon before the 30-year climbed back toward 5.25%. Gold is up more than 15% this month, its strongest since September 1999. The official explanation is a soft dollar. Sure. And the smoke in the basement is the neighbor's barbecue.
Today brings Case-Shiller home prices, Richmond Fed manufacturing, July new home sales and August consumer confidence, the last expected around 90.8, a number that in a healthier decade would have been an emergency and today is just a Tuesday. Nine months of new home supply, and nobody will mention it. All of it is a placeholder until Nvidia reports tomorrow and Kevin Warsh speaks at Jackson Hole on Friday, at which point the same people currently ignoring the bond market will explain that they always cared about it.
The desk closed CF Industries ($CF) yesterday, up 9.0% over eight sessions, against an S&P 500 that lost 1.2% over the same stretch. Nothing changed about nitrogen. A bearish reversal was setting up in the candlestick, and the rule says you take the money when the chart stops agreeing with you. The position was always a spread wearing an equity costume, and spreads narrow. No further explanation available.
Levels into the open. Gold near $4,677, a three month high. WTI around $84.90 after a 2.5% pullback, still above $84.50 overnight despite the sanctions, because the oil market has decided the Strait of Hormuz is now simply weather. Bitcoin about $77,700, up 23% in a week and still nowhere near what its evangelists promised. S&P futures 7,672.50, up a shade. The 10-year at 4.71%, politely ignoring the buybacks.
The wonderful world of finance, where one chip company sets the mood and the sovereign debt of the United States is a footnote.
Have a good one.