All three main equity indexes opened lower and stayed in the red through the last trading session of August amid a re-escalation of war in the Middle East. Crude oil spiked and the 10-year Treasury yield hit its highest level since January 2025 after the U.S. attacked Iran for the first time in a month, and the Islamic Republic responded by striking its neighbors Jordan and the United Arab Emirates.
The yield on the 10-year Treasury rose to 4.744% from 4.722% on Friday, reaching a 19-month intraday high of 4.768%. The 30-year Treasury yield (+4.1 bps, 5.249%) was up, too, but the 2-year Treasury yield (-0.1 bps, 4.339%) ticked lower. The front-month West Texas Intermediate crude oil futures contract added 3.0% to $85.92 per barrel.
“With traders tracking geopolitical volatility as well as potential seasonal volatility,” E*TRADE from Morgan Stanley Managing Director Chris Larkin writes, “it will be interesting to see which market impulse from last week might carry over to this week — the S&P 500’s net gain, or its Friday weakness following comments from Kevin Warsh.”
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The Fed chair reiterated his commitment to price stability during his keynote speech at the Jackson Hole Economic Symposium, saying the central bank would “have work to do” should inflation not move toward its 2% target “clearly and at sufficient speed.”
In addition to weighing the impact of escalating war in the Middle East, the Fed will take account of the August jobs report on Friday. “Unexpectedly strong labor-market data this week might be taken as bad news by the market, since it could reinforce expectations for a rate hike,” Larkin observes.
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CME FedWatch shows a 66.1% probability of a 25-basis-point increase to the federal funds rate at the conclusion of the September 15-16 Federal Open Market Committee meeting, up from 57.0% on Friday.
At the closing bell, the Dow Jones Industrial Average was down 0.7% at 53,185, but the blue-chip index ended the month with a gain of 1.3%. The broad-based S&P 500 shed 0.3, but it was up 2.6% for August at 7,686. The tech-heavy Nasdaq Composite ended the day lower by 0.1% and the month higher by 3.9% at 26,370.
Another legendary Apple CEO steps aside
Apple (AAPL, -0.9%) wasn’t among the handful of Dow Jones stocks posting gains today. But the iPhone maker is up about 2,740% over the trailing 15 years to August 24, 2011, the day Tim Cook took over from Steve Jobs as CEO of the iconic technology company.
Cook is stepping down from that role effective tomorrow but will remain as executive chairman.
“If there was one picture to define Tim Cook’s legacy, it would be a stock chart during his tenure,” Freedom Capital Markets Chief Market Strategist Jay Woods writes. “Started at the bottom left and ended at the top right. A long-term uptrend with higher peaks and lower valleys along the way.”
In addition to the total return, Woods notes that AAPL executed 7-for-1 and 4-for-1 stock splits, was added to the Dow, was the biggest stock in Warren Buffett‘s Berkshire Hathaway (BRK.B, -0.2%) equity portfolio and was, indeed, the biggest company in the world by market cap for a long stretch under Cook’s leadership.
Succeeding Cook (and Jobs) is John Ternus. “At 50, Ternus is roughly the same age Cook was when he replaced Jobs,” Woods observes, “but his engineering and product background offers Apple something different as it searches for its next big innovation and plays catch-up in AI. Cook proved you could successfully replace a legend, now Ternus gets the unenviable task.”
California wildfire law doesn’t protect EIX, PCG
Edison International (EIX, -22.9%) and PG&E (PCG, -20.0%) were the two worst S&P 500 stocks on Monday after the California State Assembly passed an amendment to wildfire legislation that doesn’t include liability protection for utilities.
Gov. Gavin Newsom wanted to limit what utilities had to pay to insurance companies, some survivors, local governments and businesses claiming damages from wildfires caused by their electricity infrastructure.
According to CalMatters, the governor and leaders of California’s legislature agreed on a final bill that leaves out all of Newsom’s proposals. Newsom had been concerned about the impact of rising costs on investor confidence in the utility stocks.
