The 60-day U.S.-Iran memorandum expired at midnight with no deal. The 10-year yield eased to 4.65% as September hike odds fell sharply. Home Depot, Target, Lowe’s and Walmart report this week after July retail sales fell 0.6%.
Asia opened the week cautious, not fearful.
Hong Kong led gains, with Hang Seng futures up 0.6%. Japan’s Nikkei edged higher, while the Topix slipped 0.45%. South Korea was closed for a holiday. Japan’s economy grew at a 1.1% annual rate last quarter, well below the 2.0% forecast.
Friday set the tone in the U.S. The S&P 500 fell 0.2% from its record to 7,785. The Dow lost 108 points to 53,732, while the Nasdaq 100 slipped 0.1%. The bigger problem was not Iran. It was the consumer.
July retail sales fell 0.6%, the steepest decline in more than a year. Consumer sentiment dropped to 51 from 55.2. Both landed after soft CPI and PPI data had already reduced pressure on the Fed to hike.
That puts the consumer at the center of this week.
Home Depot (HD) reports Tuesday, Target (TGT) and Lowe’s (LOW) Wednesday, and Walmart (WMT) Thursday. Empire State and NAHB data arrive today, followed by FOMC minutes Wednesday.
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The deadline expired. The dispute did not.
The 60-day U.S.-Iran memorandum lapsed at midnight without either side carrying out its terms. Iran disputes that there was a ceasefire clock to extend. Its foreign minister says the agreement covered an end to the war, not a temporary pause.
The language hardened over the weekend.
Trump said he would soon declare the Strait of Hormuz “United States territory.” Iran rejected that position and repeated that the strait remains Iranian. Israel also killed a senior Hezbollah commander and struck southern Lebanon Saturday, adding pressure to an already stalled process.
Washington is shifting toward economics.
Treasury Secretary Scott Bessent says the U.S. could announce unprecedented measures to isolate Iran as soon as this week. That follows warnings that the naval blockade can continue indefinitely.
Brent closed above $88 Friday and gained more than 5% for the week. The IEA has warned of the widest supply deficit in five years.
Energy Signal
The deadline ended without a deal. Washington’s next lever is economic pressure, while Iran still controls access through Hormuz.
Rate-hike fear collapsed in one week.
The 10-year Treasury yield eased to 4.65% Friday from a 19-month high near 4.75%. Markets now put the chance of a September Fed hold near two-thirds. Polymarket’s hike odds have fallen to roughly 25% from around 60%.
The data did most of the work. July CPI rose 0.1% on the month, with core up 0.2%. PPI was flat. Then retail sales fell 0.6% and consumer sentiment dropped to 51.
That combination gives Chair Kevin Warsh room to wait even with Brent above $88. The problem is that weak demand and expensive energy point in opposite directions. One argues against another hike. The other can restart inflation.
Wednesday’s FOMC minutes should show how deep that split runs. Three officials dissented for a hike at the July meeting. Jackson Hole follows August 27 to 29.
Macro Signal
Soft inflation and weaker spending reduced the need to hike. Oil keeps the argument alive.
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Wall Street is pricing one part of the economy two years ahead while another struggles today.
Anthropic is projecting 2028 revenue near $190 billion to $200 billion as bankers work on a possible IPO. That is more than four times the roughly $47 billion annual run rate disclosed in May.
Bankers are using high-growth AI names as valuation guides.
SpaceX (SPCX) and Cloudflare (NET) trade near 41.6 times estimated 2026 revenue, while Palantir (PLTR) is near 53 times. Applying even part of that premium could support an Anthropic valuation above $1 trillion. Some investors are pushing toward $2 trillion for an October listing.
The other side of the market reports this week.
Home Depot, Target, Lowe’s and Walmart will provide the first company-level read on consumers since Friday’s 0.6% retail-sales decline.
Capital Signal
AI investors are underwriting demand years into the future. Retailers have to prove demand exists today. The gap between those two trades is getting wider.
Crypto lost both routes to regulatory clarity in the same 48 hours.
The SEC pulled Friday’s planned vote on Regulation Crypto because of an “unforeseen scheduling issue.” No new date was announced. A separate tokenization exemption was also shelved.
Congress is waiting too.
The Senate left for a five-week recess without moving the CLARITY Act. Its next procedural test is expected September 15. That leaves agency rulemaking and legislation stalled at the same time.
Capital is also moving out unevenly.
Bitcoin ETFs lost about $385 million over the past week, while Ether funds shed just $3 million. Bitcoin traded near $63,000 Sunday, down roughly 2.8% for the week.
Infrastructure added another warning.
A routing failure at TeraSwitch knocked 28.8% of staked Solana offline on August 12. The network kept producing blocks, but it came within 4.5 percentage points of losing transaction finality. One provider hosting more than a quarter of staked SOL exposed a concentration problem beneath the network.
Tether provided the week's trust test. KPMG issued an unqualified opinion in its first Big Four audit, showing reserves exceeded liabilities by $6.8 billion at year-end. A later attestation showed that cushion had fallen to about $4.1 billion, a decline of roughly 40%.
The Verdict
Regulation stalled. Bitcoin ETF money left. Solana exposed an infrastructure weakness, while Tether passed its audit with a smaller reserve cushion afterward.
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Monday begins with three clocks running at different speeds.
The Iran deadline expired, but the conflict did not. Washington is moving toward sanctions and economic isolation while Hormuz remains the leverage point. Brent above $88 shows the market expects pressure before peace.
The Fed has the opposite problem. CPI, PPI, retail sales and sentiment all weakened the case for another hike. Wednesday’s minutes show whether the committee moved with the data.
Then comes the consumer. Home Depot, Target, Lowe’s and Walmart report across four days after retail sales fell 0.6%.
AI valuations are looking toward 2028. Crypto regulation is waiting for September. The American shopper has to answer this week.
The ceasefire clock ran out. Now the earnings clock starts.