US Market Wrap 28 August: Two Year Yield Jumps 14 Basis Points as Warsh Puts September in Play

By The Edge Research Team

The two year Treasury yield rose 14 basis points to 4.34 percent on Friday, the largest move at any point on the curve on our calculation, after Federal Reserve Chairman Kevin Warsh used his Jackson Hole keynote to say the Fed’s predominant focus right now should be on prices. The S&P 500 slipped 0.25 percent to 7,711.76, and the odds of a quarter point rate increase at the September meeting jumped to 57.5 percent from 35.4 percent a day earlier on the CME FedWatch tool, per CNBC’s market coverage, which noted the index still closed out a positive week.

The curve reprices a September increase

All 11 Treasury maturities we track moved higher on the day, on our reading of the Treasury’s own table, and the shape of the move carries the message. The rise was led by the front end and belly of the curve: the two year rose 14 basis points to 4.34 percent and the one year and three year each rose 11 basis points, while the extremes barely moved, with the one month up 3 basis points and the thirty year up 3 basis points to 5.22 percent.

That pattern flattened the curve. The gap between the two year and the ten year narrowed to 39 basis points from 47 a day earlier, on our calculation, as the ten year rose 6 basis points to 4.73 percent. A move concentrated in the one to five year sector, with the long end nearly still, is more consistent with a repricing of near term policy expectations than with a broad repricing of long run inflation risk, on our reading.

The repricing followed the speech, in which Warsh said the Fed has work to do on inflation, kept the 2 percent objective as a firm, fixed target, and closed by saying he stands committed to a discipline, not to a decision. The July vote to hold the target range at 3.50 to 3.75 percent had already drawn three dissents in favor of a quarter point increase. The rise in the FedWatch probability, 22.1 percentage points in a single day on our calculation, is the market’s translation of that language into September odds.

US Department of the Treasury, official daily par yield curve rates. The curve is derived from indicative bid side quotations at or near 3:30 pm each trading day, which is 19:30 GMT in summer. Changes are computed by us by subtraction.

Five sectors rise as technology gives back Thursday’s lead

The index moves were small against the repricing underneath. The Dow Jones Industrial Average slipped 9.45 points, or 0.02 percent, to 53,559.99, the Nasdaq Composite fell 0.52 percent to 26,402.42, and the Russell 2000 dropped 1.39 percent to 2,972.37, underperforming the S&P 500 by 1.14 percentage points on our calculation, on a day short yields jumped.

Five of the 11 S&P 500 sectors closed higher and six fell, a reversal of Thursday’s board, on which technology rose alone, per our 27 August wrap. Technology fell 1.29 percent on Friday, handing back a little over a third of Thursday’s 3.40 percent advance on our calculation, while consumer discretionary led at 1.69 percent and communication services followed at 1.56 percent. The 2.98 percentage point spread between the best and worst sector, on the same calculation, sits with the buying in the consumer and communication groups: Amazon rose 3.97 percent, Alphabet 1.74 percent and Meta Platforms 1.21 percent.

The CBOE Volatility Index eased 0.55 percent to 14.43. The decline in the VIX suggests equity hedging demand remained contained despite the sharp repricing in short term rates, on our reading.

Closing levels for the 28 August 2026 session, basis the 20:00 GMT close. Ranked by change. Per CNBC.

S&P 500 GICS sector indices at the 28 August 2026 close. Ranked by change. Per CNBC.

PayPal and Marvell slide while Workday and Gap jump on earnings

PayPal fell 12.71 percent to 53.66 dollars after Bloomberg reported that Advent International and Stripe had decided not to pursue a buyout of the company, a report CNBC said it had not independently confirmed. Marvell Technology fell 10.28 percent to 216.62 dollars: the chipmaker raised its fiscal 2028 revenue outlook to around 18 billion dollars, growth of about 50 percent year on year on the company’s projection and above its prior 16.5 billion dollar forecast, but investors judged the raised outlook insufficient against expectations that had built around its recent artificial intelligence chip agreement with Google, per the same coverage. Nvidia fell 4.57 percent to 217.55 dollars, giving back part of the near 9 percent jump that followed its results on Thursday, covered in our 27 August wrap.

On the other side, Workday rose 5.76 percent to 204.72 dollars after second quarter adjusted earnings of 2.75 dollars a share on revenue of 2.65 billion dollars, both ahead of consensus. Gap jumped 12.94 percent to 23.48 dollars after raising its earnings outlook, reporting adjusted earnings of 52 cents a share against a 48 cent estimate, and naming Michael Francis to lead its Old Navy brand from 2 November. Salesforce added 1.57 percent, a day after the earnings beat covered in our 27 August wrap.

Metals slump as the dollar firms

The dollar index rose 0.51 percent to 99.667 at the 20:23 GMT capture, and the metals took the other side. At the same capture, COMEX gold was down 3.33 percent at 4,508.60 dollars an ounce and silver down 4.31 percent at 66.44 dollars, a decline 1.3 times gold’s in percentage terms on our calculation. Bitcoin fell 3.22 percent to 77,480.28 dollars. Our Asia Market Wrap of 28 August had the dollar index at 99.163 at its 11:02 GMT capture, so the dollar’s gain was in place within hours of the speech and held through the New York afternoon, on our reading.

Crude barely moved, with Brent down 0.37 percent at 89.37 dollars a barrel and West Texas Intermediate down 0.17 percent at 83.39 dollars. The session’s larger commodity story was in the grains: wheat touched 7.725 dollars a bushel and corn 5.4125 dollars, both the highest since late July 2023, and soybeans 12.795 dollars, the highest since January 2024, with wheat up 10 percent on the week, per the same market coverage, which carried Reuters reporting that attacks in the Black Sea had halted nearly all grain shipments through ports that had accounted for about 70 percent of Russian grain exports.

Quotes captured at 20:23 GMT on 28 August 2026, ranked by change. WTI, gold, silver and Brent are shown after their NYMEX, COMEX and ICE settlement windows; the levels are the vendor’s post window quotes rather than the exchanges’ official settlements, and the changes are measured against the prior session’s settlement, so they are settlement to post window quote. The dollar index, the currency pairs, the VIX and bitcoin are continuously quoted. Contract months are those quoted at capture; vendors roll to the next active month at different times.

Middle East, 27 August session, for reference

Carried verbatim from our Middle East Market Wrap for the 27 August session, the most recent completed regional session; Gulf and Egyptian markets do not trade on Friday. Boursa Kuwait, The Egyptian Exchange and the Muscat Stock Exchange were closed on 27 August for the Prophet’s Birthday.

Europe, 28 August close, for reference

Carried verbatim from our Europe Market Wrap of 28 August 2026.

Asia, 28 August close, for reference

Carried verbatim from our Asia Market Wrap of 28 August 2026.

Why it matters: The 14 basis point rise in the two year yield, the 22.1 point jump in September hike odds and the metals selloff are one trade read three ways: the market took Warsh’s speech as raising the probability that the next move in US rates is up. For US equities the message sits in the composition rather than the level, since the S&P 500 lost only 0.25 percent while the small cap Russell 2000, whose smaller constituents tend to be more exposed to financing conditions, fell 1.39 percent, and the sector that led Thursday’s advance fell the furthest. A repricing this size that leaves the thirty year yield nearly unchanged is, on our reading, more consistent with a repricing of the near term policy path than with a wholesale repricing of long run inflation expectations.

Outlook: The August employment report lands next week, per the same market coverage, ahead of the Federal Open Market Committee meeting of 15 to 16 September, and after Friday’s repricing it carries the burden of confirming or undoing a September increase that the FedWatch tool now prices as more likely than not. The two year yield at 4.34 percent and the gap to the ten year at 39 basis points are the levels to watch into that meeting, on our reading. Monday’s session will also show whether Friday’s rotation out of technology extends or reverses, and whether the metals find a floor once the dollar’s move settles.

Sources: CNBC, index and sector closes, quotes captured at 20:23 GMT on 28 August 2026, and market reporting, including its reporting of the CME FedWatch tool and of Bloomberg’s PayPal report; US Department of the Treasury, official daily par yield curve; Federal Reserve, Chairman Kevin Warsh’s Jackson Hole remarks of 28 August 2026; Reuters, as carried in the grain market coverage; The Edge, US and Middle East Market Wraps of 27 August 2026 and Europe and Asia Market Wraps of 28 August 2026. Calculations described as ours are computed from the published levels shown.

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