Wall Street closed with a subdued tone on August 25, as technology shares weighed on the broader market, with the Nasdaq Composite falling 0.76%. Investor attention is now squarely fixed on the upcoming earnings report from Nvidia, which could set the near-term direction for the chip sector.

Most US-listed Chinese stocks declined during the session, with Taiwan Semiconductor Manufacturing Co dropping more than 2%. On the turnover leaderboard, memory chip stocks faced renewed selling pressure, while Nvidia extended its losing streak to a seventh straight session.

In commodities, crude oil prices retreated from recent highs, while London copper surged to a fresh record peak. Gold prices climbed to their strongest level in over three months, reflecting cautious investor sentiment amid geopolitical uncertainty.

European equity markets opened the week on a largely flat note, with traders shifting their attention to upcoming economic data releases that could influence central bank policy expectations.

On the macro front, the US government announced new economic sanctions against Iran, intensifying pressure on Tehran. Treasury Secretary Bessent has demanded that allied nations sever commercial ties with Iran, warning that failure to comply would result in unilateral US penalties. He further stated that any entity found laundering money for Iran would be removed from the dollar-based financial system.

The US Vice President indicated that trade negotiations with Canada remain ongoing, even as tensions escalate. President Trump has threatened to double tariffs on Canadian automobiles to 50%, deepening the trade dispute between the two neighbors. US officials also confirmed that the government is preparing to revoke up to 200,000 business and tourist visas.

Iranian officials responded defiantly to the US threats. The Supreme Leader's advisor vowed that any response to American threats would be more resolute than ever, while President Pezeshkian asserted that US bullying tactics would not resolve any issues. Iran's Economic and Finance Minister stated that the country is fully prepared to withstand American sanctions, and the Parliamentary Speaker dismissed the threats, saying nobody believes Washington's rhetoric.

Meanwhile, Canadian Prime Minister Trudeau said his country would return to trade negotiations if the US adopts the "right attitude." In other developments, the OECD reported that G7 economic growth slowed to 0.3% in the second quarter. Israel's Prime Minister claimed that Iran attempted to assassinate his son, while Pakistan's Army Chief of Staff met with the Iranian Parliamentary Speaker to discuss regional security.

In corporate news, Nvidia announced that Groq racks will go live later this year, following its $20 billion acquisition of the AI startup. XPeng held its Q2 earnings call, revealing that its humanoid robot Iron will enter mass production by year-end, with the G9L model launching next month. PDD Holdings executives expressed confidence in the long-term prospects of its branded self-operated business during the earnings call. Bloom Energy drew significant market attention during the session.

Financial disclosures revealed that President Trump purchased shares in Elon Musk's SpaceX in June. Billionaire investor Ron Baron made a massive $24.9 billion bet on a controversial conglomerate. Meanwhile, the CEO of Trump Media defended the company's decision to sell prioritized post access to the President, noting that the number of signed clients continues to grow.

In the bond market, US Treasuries rallied toward session highs late in the day, supported by falling oil prices and reports of cash reserve buybacks. Wall Street institutions including Goldman Sachs and Wells Fargo argued that Treasury buybacks are unlikely to push long-term yields lower. The Treasury Department may utilize cash reserves for bond purchases, though Bessent has not signaled any shift in debt management strategy.

Germany's Finance Minister attributed the surge in bond yields to President Trump's war against Iran. Prediction market traders remain skeptical that Bessent's intervention in the bond market can successfully drive yields down. A Goldman Sachs partner warned of the "significant dangers" in replacing bankers' reasoning capabilities with AI, while Citadel Securities noted that Treasury buybacks resemble financial repression, with potential pressure transmitting to the dollar and inflation.

In other news, the US court ruling against Trump has not stopped his administration from expanding the proposed $100,000 H-1B visa fee to include domestic applicants. Bessent's successive moves have rattled markets, prompting Wall Street to refocus on the "devaluation trade" narrative.