European markets finish higher, led by France's CAC 40 as weekly losses halved

European major indices ended the session higher as London and European traders headed for the exit. The CAC in France led the advance, rising 0.98%, marking a reversal from the index's performance earlier in the week. Ironically, the index had closed the week down -0.98%, meaning the decline was cut in half during today's trading. A summary of daily index performance follows:

• German DAX: +0.81%
• France's CAC 40: +0.98%
• UK's FTSE 100: +0.29%
• Spain's Ibex: +0.81%
• Italy's FTSE MIB: +0.67%
• Euro Stoxx 50: +0.77%

For the trading week, major indices delivered a mixed finish:

• German DAX: +1.66%
• France's CAC 40: -0.98%
• UK's FTSE 100: +0.07%
• Spain's Ibex: +0.40%
• Italy's FTSE MIB: -0.10%

In the European debt market, benchmark 10-year yields rose across the board, led by France and Italy:

• Germany: 3.280%, +1.3 basis points
• France: 4.127%, +2.9 basis points
• UK: 5.069%, +2.9 basis points
• Spain: 3.732%, +2.5 basis points
• Italy: 4.102%, +2.5 basis points

In U.S. markets, major indices are trading mixed following Fed Chair Kevin Warsh's speech at Jackson Hole. Warsh adopted a hawkish tone at the event, offering no explicit guidance on the next interest-rate decision but making clear that inflation remains the Fed's primary focus. He described the economy as resilient and strengthening, with solid consumer spending, strong AI-related business investment, historically low unemployment and financial conditions that are difficult to characterize as restrictive. At the same time, PCE inflation remains well above the Fed's firm 2% target, and recent encouraging readings have not convinced him that underlying inflation is improving sufficiently. Warsh said the Fed must see inflation moving toward its objective clearly and at an adequate pace, signaling a high bar for near-term easing while stressing that he remains committed to policy discipline rather than any predetermined rate decision. The expectation for a September hike now stands near 59%.

U.S. markets are reacting to Fed Chair Kevin Warsh's hawkish Jackson Hole message with a clear rise in Treasury yields and growing pressure on interest-rate-sensitive stocks. Warsh's emphasis on persistent inflation, resilient growth and relatively easy financial conditions is prompting markets to scale back expectations for near-term rate cuts.

U.S. stocks are mixed:

• Dow Jones: 53,689.36, up 115.01 points or 0.21%
• S&P 500: 7,730.76, virtually unchanged at -0.00%
• Nasdaq Composite: 26,484.51, down 0.21%
• Russell 2000: 2,983.32, down 1.03%
• Nasdaq 100: 29,508.00, down 0.45%

The Dow is holding up, but technology shares and small-cap stocks are underperforming. Both groups are more sensitive to higher borrowing costs and reduced expectations for Fed easing.

Treasury yields are higher across the curve:

• 2-year: 4.3289%, up 9.7 basis points
• 3-year: 4.3874%, up 9.1 basis points
• 5-year: 4.4683%, up 7.2 basis points
• 7-year: 4.5804%, up 5.8 basis points
• 10-year: 4.712%, up 4.0 basis points
• 20-year: 5.1983%, up 1.2 basis points
• 30-year: 5.1962%, up 0.5 basis points

The larger rise at the front end is flattening the yield curve, reflecting a more hawkish reassessment of near-term Fed policy. The market takeaway is that Warsh has set a high bar for easing: inflation must show clearer and more sustained progress before the Fed is likely to consider lowering rates.