Nasdaq Snaps Slump; Bessent’s Bond Move Rattles Markets

This week’s most consequential market stories all converge on one fault line: confidence in U.S. fiscal management and the dollar assets that underpin global finance.

Bessent’s Bond Buyback Rattles Treasuries. Treasury Secretary Scott Bessent moved to ramp up buybacks of long-dated U.S. government debt — a step sources describe as an attempt to stabilize the $32 trillion market held by outside investors. Bond traders are ending the week cautiously, with one turbulent stretch prompting Wall Street observers quoted by the Financial Times to call the intervention a “band-aid on a bullet hole.” A former Treasury official, Nellie Liang, framed Bessent’s goal as signaling that high long-term rates are a concern. The week closed with traders on pause, watching for his next move.

Bitcoin and Gold Surge as Dollar Weakens. Gold was on track for a third consecutive weekly gain, driven directly by the Treasury’s buyback announcement and the fiscal concerns it underscored. Bitcoin simultaneously posted what Bloomberg and the Financial Times described as its best weekly performance in more than three years. Both moves reflect a rotation away from dollar-denominated assets as confidence in U.S. fiscal management wavers — a theme amplified by the news that the national debt crossed $40 trillion this week, having grown by $3 trillion in the past year alone, according to Axios.

Nasdaq Looks to Snap Five-Day Losing Streak. U.S. stock futures rose in early Friday trading, putting the Nasdaq 100 on course to break a five-session slide. Yields held broadly steady heading into the session, providing modest relief for rate-sensitive technology shares. The reprieve arrives against a backdrop of broader concern: York Space Systems — once a high-profile space-sector name — saw Wall Street analysts slash price targets after a 73% share-price rout, citing supply chain troubles and a slower pace of government contracts.

Stagflation Risk Returns to the Conversation. Commentary across financial media is revisiting the question of whether the U.S. economy risks a stagflationary episode — slow growth paired with persistent inflation — echoing the pressures of the 1970s. Meanwhile, an Axios analysis of 269 Truth Social posts between late February and mid-August found that oil-market sensitivity to presidential commentary on the Iran conflict and the Strait of Hormuz has diminished significantly over time, with traders increasingly discounting social-media signals in favor of observable supply data.

European Divergence: Germany Gains, France Feels the Heat. On the European side, German manufacturing showed signs of a boost, while French businesses reported disruption from an extended heatwave — a divergence that underscores the uneven footing of the eurozone recovery. Separately, the UK posted an unexpected budget deficit of £1.8 billion in July, complicating the fiscal calculus for new Chancellor John Healey ahead of his first Budget and prompting warnings to limit additional borrowing amid an ongoing bond sell-off. HSBC disclosed spending $68 million on its largest cull of senior bankers since the financial crisis, the largest reduction of highly paid staff across major European lenders since 2020.