Chip selloff dents Wall Street; gold and crypto run as Fed cut nears

Wall Street closed mixed on Monday and the split told the story. The S&P 500 slipped 0.3% to 7,652.86 and the Nasdaq shed 0.8%, dragged by chipmakers, while the Dow eked out a 0.3% gain to 53,417 as money rotated into defensives. That is last night's close — the only live read on the American day is futures, which point higher (S&P +0.2%, Nasdaq +0.5%).

Asia is mostly firmer this morning: the Nikkei is up 0.5% and the Kospi 0.4%, and Taiwan finished 0.9% higher, though the Hang Seng is a touch lower and Shanghai barely changed.

The overnight weakness was concentrated, not broad. Chip stocks led the Nasdaq lower after a weekend report that Nvidia plans to raise prices on some of its AI servers, with memory names such as Micron among the hardest hit; across our US technology cohort the median stock fell about 1.4% on the day. Layered on top were fresh US sanctions on Iran — Treasury Secretary Bessent's 'Operation Economic Outcast' — and renewed US-Canada tariff friction. Yet the Dow rose and consumer staples and financials gained, so this reads as rotation out of crowded AI and speculative trades rather than a wholesale de-risking.

The bigger backdrop is the Fed. After Powell used Jackson Hole on Friday to open the door to a September cut, markets now price the move at better than nine-in-ten, and the Treasury curve is grinding lower — the 10-year eased 3.4 basis points to 4.70%. That same conviction, reinforced by Bessent's expanded buyback operations in longer-dated Treasuries, is lighting a fire under risk plays on the fringe: bitcoin jumped 3.8% overnight and is up roughly 17% over five days, while gold added 1.4%, extending a climb of more than 15% over the past month — though it still sits well below its January peak.

The tape is cautious rather than fearful. The VIX rose 4.8% but at 15.85 remains deep in calm territory, less than half its 52-week high. Breadth was negative — advancers trailed decliners across our US universe — and dispersion was stark, with our US consumer-staples median up 1.1% against technology down 1.4%. Lower yields, firmer gold and a flat dollar complete a defensive lean beneath the placid volatility reading.

The domestic slate is light this morning, with no major UK release to trade. The day's macro test is American and lands this afternoon UK time: US consumer confidence for August, new home sales for July, the Richmond Fed manufacturing gauge and the Case-Shiller house-price index, clustered around 2pm-3pm BST (9-10am ET). With a September cut all but priced, any surprise on the consumer or housing will be read straight through the Fed lens.

Little of consequence for our readers has printed this morning; the Australian grocers Woolworths and Coles were the main names out in the Asian session. The weightier reports are US- and Canada-skewed and arrive later — Canadian lenders Bank of Montreal and Bank of Nova Scotia before the US open, then software and industrial names after the close.