IGA Capital – Weekly Macro Update

"Equity markets spent most of the week in freefall before clawing back ground to close modestly in the green, with the S&P 500 rising 1.0% to 7,490 and the Nasdaq Composite gaining 1.6% to 25,374 to cap off a choppy July, though that recovery obscured one of the most turbulent stretches for the AI trade in recent memory. Mid-week sentiment plummeted 1.5% for the S&P following the Federal Reserve’s rate hold, while the Nasdaq officially entered correction territory by dropping 11% from its early June record high before stabilizing. A powerful risk-on rebound was eventually catalyzed by institutional support and blockbuster tech earnings, highlighted by Microsoft disclosing gains on its Anthropic stake alongside strong cloud revenue growth, Amazon surging 15% in a single session on robust cloud results, and Citadel purchasing the public stock portfolio of Situational Awareness—an AI-focused fund that suffered a 67% loss in July—which removed a major forced seller and triggered a global relief rally in chipmakers. However, underlying market fragility persists, as evidenced by the Nasdaq 100 suffering its worst monthly performance in 22 years with an over 5% drop in July, suggesting risk appetite will remain highly selective moving forward amidst post-2007 highs in 30-year Treasury yields, three dissenting regional Fed presidents pressing for rate hikes, and ongoing Middle East escalations keeping energy prices elevated."

Key Macroeconomic, Commodity & Asset Snapshot

(Data as of August 3, 2026)

Asset / Benchmark	Current Level	1 Week Ago	1 Month Ago	1 Year Ago
S&P 500	7,490	7,412	7,483	6,339
Dow Jones Industrial Average	52,485	51,947	52,305	44,131
Nasdaq Composite	25,374	24,976	26,040	21,122
WTI Crude Oil	$79.18 – $79.63/bbl	$84.46/bbl	$67.62 – $68.02/bbl	$64.17 – $69.40/bbl
Gold	$4,034 – $4,052/oz	$4,078/oz	$4,030 – $4,123/oz	$3,290 – $3,345/oz
Silver	$56.62 – $57.94/oz	$58.73/oz	$59.15 – $61.38/oz	$36.71 – $37.02/oz
10-Year U.S. Treasury Yield	4.68% – 4.686%	4.651%	4.469% – 4.49%	4.22% – 4.257%
30-Year U.S. Treasury Yield	5.225% – 5.23%	5.127%	5.082%	N/A
U.S. Headline CPI (YoY)	3.50%	3.50%	4.20%	2.40%
U.S. Core CPI (YoY)	2.60%	2.60%	2.90%	3.10%
U.S. Real GDP Growth (YoY)	2.10%	2.10%	2.70%	N/A
U.S. Unemployment Rate	4.20%	4.20%	4.20%	N/A

Treasury Yields & Fixed Income Analysis

Treasuries had a fractured week, with the curve bear-steepening sharply as the bond market delivered its own verdict on the Fed's decision to hold rates. Bondholders scaled back near-term rate hike bets—rallying the 2-year yield down 5 bps following the Fed decision—while demanding higher payouts on longer-term bonds to compensate for inflation risks.  

• Long-End Yield Surges: The 10-year Treasury yield rose to 4.686%  (up 4 bps on the week and 22 bps on the month) , while the 30-year yield surged to 5.225%  (up 10 bps on the week) , touching 5.28% mid-week to mark its highest point since 2007.  

• Yield Curve Steepening: The drop in 2-year yields (currently at 4.24%) coupled with the surge in 30-year rates (5.23%)  produced one of the largest post-FOMC steepening of the yield curve since the mid-1990s.  

  • The 2s/10s Spread widened to +0.44% (+44 bps).  

  • The 5s/30s Spread widened to +0.84% (+84 bps).  

  • The Treasury options market saw investors aggressively pile into bearish put structures targeting a 10-year yield move toward 4.90%.

• Refunding Headwinds: The curve's message is clear: the long-end believes the Fed is not doing enough to contain long-term inflation. Front-end yields found a ceiling in the hold, while back-end rates drifted higher on energy prices, fiscal deficits, and policy uncertainty. All eyes now turn to the upcoming U.S. Treasury refunding announcements and auction demand.  
  

Federal Reserve Policy & FOMC Outlook

The FOMC voted 9-3 on Wednesday to hold the federal funds effective rate in a range of 3.50%–3.75% (currently effective at 3.63%)  for a fifth consecutive meeting.  

• Significant Hawkish Dissent: Dallas Fed President Logan, Cleveland's Hammack, and Minneapolis's Kashkari dissented in favor of a 25 bp hike—forming the largest hawkish dissent bloc since September 2016. JPMorgan noted this signals the committee is migrating meaningfully toward tightening.

• Chair Warsh's Strategy: Chair Warsh described the meeting as a "good family fight," insisting the hold was not inertia and pointing out that higher market yields are performing part of the tightening work. Reports indicate Warsh has discussed reducing the number of annual FOMC meetings from eight to fewer scheduled sessions to reduce market front-running.
  

  
  

  

• Rate Hike Probabilities: Rate swaps reflect a 64.0% to 62.7% probability of a 25 bp rate hike at the September 16 meeting , with the October 28 meeting implying a 55.4% probability of a 3.75%–4.00% target range. 

Implied Fed Funds Rates & Schedule:

• Current Implied Overnight Rate: 3.634%   

• September 16, 2026 Meeting: 3.79% (Implied Rate Change: +0.16%)   

• October 28, 2026 Meeting: 3.97% (Implied Rate Change: +0.35%)   

• December 9, 2026 Meeting (Year-End): 4.07% (Implied Rate Change: +0.44%)   

• June 9, 2027 Meeting (Mid-Year 2027): 4.20%   
  

Commercial Real Estate & Agency Debt Pricing

Commercial debt pricing shifted higher over the past week alongside the 10-year and 30-year Treasury yield increases:  

• Benchmark Rates (as of Aug 3, 2026):

  • 30-Day Avg SOFR: 3.621%  | 1M Term SOFR: 3.657%   

  • 5-Year Treasury: 4.401%  | 7-Year Treasury: 4.541%  | 10-Year Treasury: 4.686%    

• Fannie Mae DUS (Fixed Rate Indicative Gross Rates):

  • Tier 2 (1.25x DSCR / 80% LTV): 5-Yr: 5.83%  | 7-Yr: 5.81%  | 10-Yr: 5.85%   

  • Tier 3 (1.35x DSCR / 65% LTV): 5-Yr: 5.48%  | 7-Yr: 5.56%  | 10-Yr: 5.65%   

  • Tier 4 (1.55x DSCR / 55% LTV): 5-Yr: 5.38%  | 7-Yr: 5.46%  | 10-Yr: 5.55%   

• Freddie Mac (Fixed Rate Indicative Gross Rates):

  • 1.25x DSCR / 65% LTV: 7-Yr: 5.87%  | 10-Yr: 5.84%   

  • 1.30x DSCR / 60% LTV: 7-Yr: 5.82%  | 10-Yr: 5.79%   

  • 1.35x DSCR / 55% LTV: 7-Yr: 5.72%  | 10-Yr: 5.69%   

Economic Calendar

This Week

• Monday, August 3: ISM Manufacturing (10:00 AM)   

• Tuesday, August 4: Trade Balance (8:30 AM)   

• Wednesday, August 5: ADP Payrolls (8:15 AM); ISM Services (10:00 AM)   

• Thursday, August 6: Jobless Claims; ISM Services (8:00 AM); Wholesale Inventories  

• Friday, August 7: Nonfarm Payrolls / Unemployment Rate (8:30 AM)   

Next Week

• Wednesday, August 12: Consumer Price Index (CPI) (8:30 AM); 10-Year U.S. Treasury Auction (1:00 PM)   

• Thursday, August 13: Producer Price Index (PPI) (8:30 AM)   

• Friday, August 14: Retail Sales (8:30 AM)   

• Friday, August 21: Manufacturing PMI (9:45 AM)   
  

If you have any questions or would like to discuss a loan request, please reach out to me using the contact information below. joshua@iga.capital +971 50 764 0788