Finance Evening | Fed Chair Warsh signals hawkish stance; gold tumbles, stocks slip

📊 North American Markets Today

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1. Fed Chair Warsh signals hawkish stance; gold and silver tumble

Source: Sina Finance

On Aug. 28, spot gold fell 1.24% to $4,544.50 per ounce, while spot silver dropped 1.08% to $68.50 per ounce. The slide in precious metals was closely tied to hawkish signals from Federal Reserve Chair Warsh the same day.

Warsh said the U.S. economy is performing strongly overall and the labour market is stable, but inflation remains well above the Fed's 2% target, so monetary policy should focus on price stability. He noted that the personal consumption expenditures (PCE) price index rose 3.7% over the past 12 months and 4.1% on an annualized basis over the past six months, indicating inflation remains elevated.

Warsh also said business capital spending is growing rapidly, with more than half of this year's growth likely tied to AI buildout; real consumer spending has grown more than 2% over the past four quarters, and the unemployment rate is 4.1%, consistent with full employment. He stressed the Fed should reduce its reliance on forward guidance and make rate decisions based on the latest accurate data, adding that "the 2% price stability target is a firm and fixed target."

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2. Cleveland Fed President Hammack: "now is the time to act"

Source: CNBC

Cleveland Federal Reserve President Beth Hammack on Thursday repeated her call for higher interest rates, saying recent inflation data shows the central bank is still too far from its goal. A report released Wednesday showed inflation running around 3% on an annualized basis.

"I don't want to prejudge anything. But I believe now is the time to act," she said in a live CNBC interview from the Fed's annual symposium in Jackson Hole, Wyoming. She said the U.S. has been in an inflationary situation for more than five years, and she sees no restriction in policy when she looks at financial conditions.

Hammack is a voting member of the Federal Open Market Committee this year. At the July meeting, she was one of three dissenters against holding the policy rate in a range of 3.5%-3.75%, preferring a quarter-point hike. Market pricing, however, indicates the Fed will stay on hold in September and October and wait until December for the next hike.

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3. Nvidia pulls back a financing program right after blowout earnings

Source: Yahoo Finance

Nvidia confirmed on Aug. 27 it had paused parts of a financing program built to help AI cloud companies afford its chips, according to a Wall Street Journal report cited by Reuters. Days earlier, Nvidia posted one of the biggest quarters in corporate history, with revenue jumping 106% and profit surging 126%.

Revenue for Nvidia's fiscal second quarter, which ended July 26, came in at $96.2 billion, up 106% from a year earlier and ahead of both its own targets and Wall Street estimates. Gross margin expanded to 75% from 72.4%, operating income climbed 124% to $63.7 billion, and adjusted earnings per share rose 120% to $2.22. Guidance for the current quarter points to $108 billion in revenue, an 89.5% year-over-year increase.

The paused program, announced less than two months ago, offered credit support to small AI cloud firms in exchange for a cut of their revenue. Some Nvidia employees reportedly worried the arrangement could draw antitrust scrutiny. This month, Nvidia helped arrange $500 billion in financing and agreed to guarantee up to $105 billion to help OpenAI lease data centre capacity.

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4. Salesforce rockets 22% for its second-best day ever

Source: CNBC

Shares of Salesforce jumped 22% Thursday after the company reported a beat on second-quarter earnings and announced an expanded partnership with AI startup Anthropic. It was the stock's second-best day ever, trailing only August 2020, when shares jumped roughly 26%.

CEO Marc Benioff and Anthropic CEO Dario Amodei unveiled the "Claudeforce" effort, which brings Salesforce into Claude with a plug-in to help salespeople access critical data. The AI expansion lifted Adobe, Palantir, ServiceNow, Autodesk and Figma, and the iShares Expanded Tech-Software ETF climbed roughly 5%.

Salesforce posted revenue of $11.35 billion, versus the $11.32 billion analysts expected, up 11% year over year. Adjusted earnings per share came in at $5.90, sailing past estimates of $3.27. Net income rose 87% to $3.53 billion. The company also booked a $2.6 billion gain on its Anthropic investment, whose valuation has grown to $965 billion.

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5. Micron's rally vanishes as memory scarcity cuts both ways

Source: Yahoo Finance

Micron Technology flipped from a 3.6% premarket surge to roughly 2.0% lower at $919.105 Thursday. The memory shortage is minting money for Micron, but it could also choke Nvidia's accelerator shipments and delay the AI infrastructure spending feeding that boom.

Micron's numbers are staggering: its latest quarter delivered $41.46 billion in revenue, an 84.6% gross margin and $18.3 billion in adjusted free cash flow, versus just $9.3 billion in revenue a year earlier. AI demand did not simply improve the cycle — it blew the old economics apart.

But the stock already carries heavyweight expectations. At $919.105, Micron trades 52.17% above its $604.01 GF Value estimate, signaling investors have priced in years of tight supply and monster cash generation. Thursday's reversal was a reminder that even a historic boom can trigger selling when perfection is priced in.

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6. Canada's economy grew 3.3% in Q2, fastest since 2023

Source: CBC News

Canada's economy grew at an annualized rate of 3.3% in the second quarter, according to Statistics Canada, with June GDP up 0.3%. The growth was slightly below economists' expectations but well above the Bank of Canada's forecast of 2.5%.

Exports rose 3.6%, largely on higher auto exports, while residential investment was boosted by stronger home resale activity in Ontario, B.C. and Quebec. Business capital investment grew 2.3%, with computer and peripheral investment jumping 16.7% on data-centre processing units. Household spending rose 0.8%.

Earlier data suggested the economy shrank marginally in the first quarter, raising debate over whether Canada was in a technical recession. But Statistics Canada revised Q1 GDP to a slightly positive 0.3% annualized, prompting BMO economist Doug Porter to say the "so-called technical recession has been sent to the trash bin." Initial July estimates, however, point to flat growth amid U.S. tariff headwinds.

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7. Meta pays $17 billion settlement, adds safeguards for kids

Source: CNBC

Meta and 52 U.S. attorneys general settled on Wednesday, with the Facebook and Instagram parent company agreeing to pay about $17 billion over allegations that it knowingly designed products that were harmful and addictive to kids.

California Attorney General Rob Bonta said it is the highest amount ever paid in a case like this, but stressed the core is not the financial penalties — it is the business practices Meta will change to help protect kids' mental health.

The settlement requires Meta to enforce a series of safeguards and parental controls for users under 18, with most terms in place for 10 years. Measures include daily time limits, the ability to disable autoplay, an independent research foundation and an independent auditor. Meta's market capitalization is about $1.47 trillion.

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8. Walmart settles U.S. government's opioid lawsuit

Source: CNBC

Walmart has settled a U.S. government lawsuit accusing the largest U.S. retailer of fueling the opioid epidemic by unlawfully dispensing prescriptions from its pharmacies. The Justice Department and Walmart confirmed the settlement Friday without disclosing terms.

In a 2020 complaint, the Justice Department accused Walmart of repeatedly violating the federal Controlled Substances Act since 2013. More than 905,000 people in the U.S. died from opioid overdoses between 1999 and 2025, according to the CDC.

The lawsuit was among the most significant Justice Department cases against a single company over the opioid epidemic. In 2022, Walmart agreed to pay $3.1 billion to settle thousands of state and local lawsuits. Walmart shares rose 0.5% in morning trading.

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9. Bessent attacks Warren over yen intervention

Source: CNBC

Treasury Secretary Scott Bessent unleashed a scathing personal attack on Sen. Elizabeth Warren Friday, accusing her of misunderstanding foreign exchange markets while leaving several questions about a rare U.S. intervention in the Japanese yen unanswered.

Bessent wrote on X that Warren "knows even less about foreign exchange markets than she does about banking" and offered a "Foreign Exchange for Dummies" tutorial. Warren fired back that his effort "to prop up a foreign currency hasn't worked," and criticized Trump's economy.

The dispute stems from Warren's Aug. 13 letter seeking details on Treasury's sale of euros to buy yen after the currency fell to a 40-year low. Bessent said Treasury exchanged existing Exchange Stabilization Fund assets for yen, with no new appropriation and no credit to Japan, though he did not disclose how much yen was bought. It was the first coordinated U.S.-Japan yen intervention since 1998; Japan spent 15.4 trillion yen (about $96.5 billion) supporting its currency between July 30 and Aug. 26.

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10. 52% of Gen Z investors redirect money to sports bets

Source: CNBC

Since the Supreme Court lifted the federal ban in 2018, sports betting has become fairly ubiquitous in the U.S. A survey finds 52% of Gen Z investors — those born between 1997 and 2007 — have redirected money intended for investing to sports bets, according to a Betterment survey of 1,000 investors.

Professionals say the concern is when gambling starts competing with money intended for long-term wealth building, and entertainment starts masquerading as an investment strategy. About a quarter of Gen Z investors believe sports bets should be part of their long-term financial strategy.

Bookmakers hold an edge over bettors through the "vig" — on a bet with a nominal 50/50 outcome, you typically risk $110 to win $100. By contrast, the stock market has averaged roughly 10% annual returns over the past century. Research has also tied legalized sports betting to rising delinquency and bankruptcy rates.

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