Markets This Week: August 31-06, 2026

31 August to 6 September 2026, BullWaves Market Research

Only a week ago, most investors expected the US Federal Reserve to keep interest rates unchanged in September. That outlook shifted sharply following the Jackson Hole gathering on Friday, where Fed Chair Kevin Warsh delivered a noticeably tougher message on inflation.

Within a single trading session, the market implied probability of a September rate increase climbed from roughly 35% to around 60%, according to Fed Funds Futures. Treasury yields moved higher, the US dollar strengthened, while gold and Bitcoin retreated from their recent highs.

The important point is that this repricing was driven largely by communication rather than fresh economic data. This week therefore becomes an important test of whether the market can justify that move once the numbers begin arriving.

US Jobs Take Centre Stage

Friday’s US employment report is likely to be the most important macroeconomic release of the week.

A stronger than expected labour market report could reinforce the case for higher interest rates, while weaker employment growth could give policymakers more reason to remain patient.

The labour market has already shown signs of losing momentum. The US economy recorded a decline of 23,000 jobs in July, while annual wage growth slowed to 3.2%.

For August, economists are expecting a relatively modest recovery of around 56,000 new jobs, with unemployment projected to remain close to 4.1% or 4.2%.

Markets will receive two important signals before Friday. The JOLTS job openings report arrives on Tuesday, followed by the ADP private sector employment report on Wednesday.

Together, these releases should provide investors with an early indication of whether Friday’s headline employment number is likely to support the Federal Reserve’s increasingly hawkish tone.

Crude Oil Rallies as Middle East Tensions Return

Oil prices moved sharply higher toward the end of last week and continued to attract attention at the beginning of this week.

US crude traded around $86 per barrel, while Brent approached $93 after gaining roughly 3% on Friday. The move followed renewed concerns surrounding energy flows through the Strait of Hormuz.

Over the weekend, the United States carried out its first attack on Iran in approximately one month, targeting rocket launchers located on Larak Island in the Strait of Hormuz.

Iran’s Islamic Revolutionary Guard Corps subsequently launched ballistic missiles toward the King Hussein and Al Azraq military bases in Jordan, both of which host US forces.

The renewed escalation has once again added a significant geopolitical premium to crude prices.

However, the situation remains highly sensitive to headlines. Reports suggesting the possibility of a ceasefire could quickly reverse part of the recent move, meaning oil currently faces meaningful risk in both directions.

The impact extends well beyond the energy market. Higher crude prices can feed directly into inflation, precisely when the Federal Reserve has returned its attention to persistent price pressures.

That creates an additional complication for policymakers, particularly if energy prices remain elevated while economic data continues to show resilience.

Broadcom Earnings Put the AI Boom Back in Focus

Broadcom is scheduled to report quarterly earnings this week, giving investors another important indication of the strength of spending across the artificial intelligence infrastructure market.

The semiconductor company plays a major role in AI data centres through its custom chips and networking technology.

Wall Street currently expects approximately $29.4 billion in third quarter revenue, but investors will likely focus just as closely on management’s forward guidance.

Broadcom sits directly within the infrastructure buildout supporting artificial intelligence, meaning its expectations for future demand can influence sentiment across the wider technology sector.

Hewlett Packard Enterprise and Dell will also be worth monitoring. Both companies supply servers and computing infrastructure designed for increasingly demanding AI workloads, leaving them exposed to many of the same investment trends.

Strong guidance from Broadcom would reinforce confidence that spending on artificial intelligence infrastructure remains robust.

A more cautious outlook could instead raise questions over whether expectations surrounding the AI investment cycle have moved too far ahead of underlying demand.

Bank of Canada Expected to Hold Rates

The Bank of Canada is widely expected to leave its benchmark interest rate unchanged at 2.25%.

Economic conditions have strengthened since the central bank’s previous meeting.

Canadian second quarter growth came in stronger, inflation remains near the upper end of the Bank of Canada’s 1% to 3% target range, while the economy added approximately 75,000 jobs during July.

With the Canadian dollar also facing pressure amid ongoing trade tensions with the United States, investors are likely to focus more heavily on the language accompanying the decision than on the rate announcement itself.

The key question will be whether policymakers continue to leave the door open to future rate increases.

Canadian employment figures arriving on Friday could provide another important signal and potentially reshape expectations for the next policy meeting.

US and China PMIs Offer a Factory Health Check

Manufacturing activity will also return to focus through a series of Purchasing Managers’ Index releases.

PMIs are monthly surveys designed to measure business activity across the manufacturing sector. A reading above 50 generally indicates expansion, while a figure below 50 points toward contraction.

The US ISM Manufacturing Index rose to 55.6 in July, signalling a relatively strong expansion.

One component deserves particular attention this week, the prices paid index. Because it tracks the costs manufacturers are facing, it can provide an early indication of inflationary pressure before those changes become visible in broader consumer price data.

China has already released its official manufacturing surveys on Monday, followed by the private Caixin manufacturing reading on Tuesday.

Both remained below the 50 level associated with expansion, although readings were close enough to that threshold to suggest that a return to manufacturing growth remains possible.

Viewed together, the US and Chinese numbers provide an important snapshot of industrial demand across the world’s two largest economies.

Also on the Radar

Corporate headlines surrounding a potential future leadership transition at Apple are also attracting attention.

For now, the story appears more relevant as something to monitor over the longer term rather than as an immediate market catalyst.

Investors will nevertheless continue watching developments closely given Apple’s importance within global equity markets and the technology sector.

Overall, the coming week is likely to be defined by whether economic data confirms the market’s post Jackson Hole shift.

Employment figures, inflation signals, oil prices, central bank communication and corporate guidance will all contribute to the same question.

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