CNBC

Lead Story

Federal Reserve Chairman Kevin Warsh used his keynote address at Jackson Hole to deliver an unexpectedly hawkish warning that stubborn inflation leaves the central bank with “work to do,” discarding forward guidance and signaling that interest rates may need to head higher. The remarks rattled bond markets, sending the 2-year Treasury yield surging over 6 basis points to 4.298% as traders pushed the implied odds of a September rate hike from 35% up toward 60%.

Markets & Economics

Major equity indexes wrapped up a winning week on a subdued note, with the S&P 500 shedding roughly 0.3% and the Nasdaq Composite slipping 0.4% as the Cboe Volatility Index (VIX) touched a year-to-date low of 14.1. Treasury yields moved higher across the short end of the curve following Warsh’s speech, while the benchmark 10-year Treasury yield held steady near 4.676% and the 30-year yield eased 2 basis points to 5.168%. Persistent price pressures remained top of mind as July PCE figures showed headline inflation at 3.7% and core prices up 3.3% annually, backing Warsh’s point that 54% of PCE subcomponents are still rising faster than a 3% annualized clip. Meanwhile, commodity markets saw front-month Brent crude oil futures settle roughly a third below their April peak of $126.41 per barrel despite the protracted Iran conflict, while corn futures gained 0.6% to 536.5 cents per bushel to mark multi-year highs on tightening U.S. crop projections.

Business & Earnings

Affirm Holdings rallied after delivering fiscal fourth-quarter revenue of $1.17 billion and gross merchandise volume of $14.1 billion, though CEO Max Levchin warned on “Squawk Box” that national average gasoline prices at $4.09 per gallon continue to squeeze consumers. Marvell Technology slumped 8% to 10% despite a 37% revenue jump to $2.7 billion and accelerating AI data center demand, as its fiscal 2028 sales guidance of roughly $18 billion failed to satisfy expectations inflated by its recent $12.2 billion Google partnership. Salesforce gained another 3% following Thursday’s 23% surge on a beat-and-raise report and its new “Claudeforce” Anthropic tie-up, with CEO Marc Benioff dismissing software obsolescence fears by highlighting $1.5 billion in annualized Agentforce revenue. Retailer Gap Inc. jumped roughly 15% after appointing former Target executive Michael Francis as the new CEO of Old Navy alongside second-quarter adjusted earnings of 52 cents per share that beat Street forecasts. Dealmaking saw sharp reversals elsewhere as PayPal tumbled nearly 16% when buyout firm Advent and Stripe halted buyout considerations, and Solstice called off its $14.5 billion merger with Element Solutions.

Investing & Commentary

On CNBC’s “Morning Meeting,” Jim Cramer observed that he is warming back up to the AI infrastructure buildout after labor unions backed data center construction, though he recommended against immediately rebuilding positions in suppliers like Broadcom and Corning ahead of next week’s earnings. On “Mad Money”, CrowdStrike CEO George Kurtz highlighted how generative AI models are dramatically compressing exploit times, arguing that enterprise reliance on legacy tools has created structural demand for advanced cyber defense platforms. In addition, fund managers on “ETF Edge” emphasized that large-cap international equities remain positioned to outpace the S&P 500, citing discounted forward price-to-earnings ratios of 10 to 12 times and potential U.S. dollar softness favoring global materials and industrial producers.

Also Worth Watching

• Gen Z Sports Betting vs. Investing (CNBC Video): A Betterment survey found 52% of Gen Z investors have redirected funds originally earmarked for long-term investments into sports betting accounts.
• Pentagon Blacklist of Anthropic Overruled (CNBC Article): A federal judge struck down the Defense Department’s designation of Anthropic as a supply chain risk, ruling the blacklist violated the First Amendment.
• GTA 6 Preview Strains Streaming Platforms (CNBC Article): Massive traffic for the gameplay debut caused temporary outages on Netflix and Twitch, driving shares of Take-Two Interactive higher ahead of the game’s November release.
• U.S. Navy Blockade Slashes Iranian Oil Exports (CNBC Video): Iranian crude loadings dropped over 80% year over year to 260,000 barrels per day as Washington steps up maritime economic enforcement.

💡 Would you like a detailed breakdown comparing Big Tech’s ballooning AI capex and balance sheet debt levels ahead of next week’s Broadcom earnings?