The US stock rally stalled after the producer price index showed a 0.9% increase in July, the largest in more than three years, raising concerns about the Federal Reserve's interest rate policy. Major indexes finished near the flatline, with the S&P 500 eking out a small gain, while the Nasdaq and Dow Jones Industrial Average dipped.

US stocks could decline if the Federal Reserve signals a dovish stance at the Jackson Hole economic symposium after a record rally, Bank of America strategists say. Investors have moved into risky assets, anticipating rate cuts, but a "buy the rumor, sell the fact" reaction could lead to a market drop, according to the strategists.

ETF issuers are taking a page from private wealth playbooks, rolling out strategies that sidestep taxes on bond coupon payments by selling holdings just before their ex-dividend dates. The approach -- available only to high-net-worth clients -- converts taxable interest into unrealized capital gains, boosting after-tax returns. While ETFs have long used in-kind redemptions to avoid capital gains taxes, this pre-dividend rotation tactic now extends that advantage to fixed income, and could spread to other asset classes as issuers cater to investors seeking "frictionless" total returns.

Analysts warn that a booming stablecoin market -- now over $250 billion and dominated by Tether and Circle -- could divert funds from bank deposits into US Treasury bills, potentially shrinking bank lending capacity. Fed research suggests a $900 billion market could mean a $325 billion drop in bank loans, while Moody's flags risks to money market funds, commercial paper, and short-term debt demand. Heavy reliance on Treasuries for reserves may lower sovereign borrowing costs in the near term but raises concentration risk if diversification doesn't occur.

Treasury Secretary Scott Bessent said the US will not purchase Bitcoin for its Strategic Bitcoin Reserve, instead relying on $15-$20 billion in seized assets, but later left the door open to "budget-neutral" acquisitions. The reserve, created by President Trump in March, will be built from forfeited Bitcoin that can no longer be sold, removing a potential $10B supply overhang from the market. While fresh sovereign buying could have signaled strong institutional support, the plan remains largely symbolic until new funding mechanisms emerge.

The Federal Reserve's overnight reverse repurchase agreement facility usage has dropped to $28.8 billion, the lowest level since April 2021, as the Treasury Department issues more short-term debt. This shift could lead to a reduction in bank reserve balances, a critical measure for market stability.

Wholesale prices in the US surged by 0.9% in July, the sharpest monthly increase since March 2022, according to the Bureau of Labor Statistics. This jump was broad-based, with both goods like food and tires and business-to-business services posting notable gains. The latest data highlights how ongoing tariffs are impacting costs at the producer level, sparking concern that these increases could eventually be passed on to consumers.

Cross-border bank credit reached a record $34.7 trillion in the first quarter, driven by a $678 billion surge in lending to nonbank financial institutions, according to the Bank for International Settlements. The majority of the lending went to NBFIs in advanced economies, with the Cayman Islands and Japan seeing the largest increases.