US Markets: Selling AI to Buy Fear of Iran and Canada
On August 24, the Nasdaq plunged 0.76–0.8%, the S&P 500 lost 0.28%, and the Dow alone managed to stay in the green at 0.26%, as Bessent announced "Operation Economic Outcast" — a new package of sanctions against Iran — while US-Canada trade talks collapsed for good, resulting in 50% tariffs on 20 billion dollars' worth of Canadian goods. The direct conclusion: the elites are simultaneously locking in profits in the overheated AI segment and hedging against the fact that Washington is opening two economic war fronts at once — against Iran and against its own ally. This is an admission that the elites' list of enemies is expanding faster than the market's tolerance for risk is growing.
Oil: The Relief Lasted Less Than a Day
Brent crude collapsed from a peak of 95 to 91–92 dollars on August 24, losing 1.76–3.58%, after the sanctions package against Iran turned out to be softer than the market had priced in, and by August 25 WTI continued its decline to 83.75. This is not de-escalation — it is disappointment with inertia: the elites expected a harder blow, got a compromise instead, and immediately stopped paying the war premium, showing that oil prices react not to the fact of the conflict itself, but exclusively to the sharpness of Washington's rhetoric.
Defense Sector: Europe Bought Relief Instead of Fear
On August 25, the European STOXX 600 rose 0.3%, with the defense sector leading the gains, adding around 1%, precisely on the back of the news that sanctions against Iran turned out to be "not the harshest possible." The direct link: as soon as the market saw that Washington was holding back rather than escalating, money flowed not into defensive assets but into defense stocks preemptively — a bet that the current pause is temporary and that the next round of escalation is inevitable, just a little later than feared the day before.
Overall Backdrop: US National Debt Is No Longer Subtext — It's a Direct Market Theme
Against the backdrop of all this geopolitics, the US national debt has crossed 40 trillion dollars, the Treasury is ramping up bond buybacks to keep yields in check, and gold and materials continue to rise as safe-haven assets. In this episode, the elites are voting with utmost clarity: confidence in the stability of the American financial system itself is becoming a risk no less significant than any single war.
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