US-Canada Trade War Erupts as Fed Turns Hawkish, Bitcoin Hits $81K
thePropTrade Week – Sunday 30th August 2026
5 min read
- August 30, 2026
Hi Traders,
Four key events characterised the final full trading week of August – a shock trade war, sticky inflation, blockbuster earnings, and the most hawkish Fed speech in months.
Missed last week’s action? Catch up on last week’s recap, where a failed Treasury bond buyback and Bitcoin’s 26% breakout dominated the headlines.
US-Canada Trade War Erupts, Rattling Markets
The surprise trade war which has erupted between the US and Canada caught the market and commentators on the back foot. Talks collapsed last Friday, and President Trump immediately announced new $20 million tariffs on Canadian imports. September 8th marks the start of Prime Minister Carney’s “dollar-for-dollar tariffs on US imports” between the once-cosy neighbours. The tit-for-tat hit a new low as President Trump signed an executive order renaming Lake Ontario to Lake America! A trade war is not good for either side and can weigh heavily on market sentiment.
Core PCE Confirms Sticky US Inflation
The Fed’s preferred measure of prices, the Core PCE Price Index, confirmed the stickiness of US inflation. The headline came in at 0.2% for July, annualised at 3.6%, with the Core reading at 3.3% – still some distance from the FOMC’s 2.0% target, a level Fed Chair Warsh is committed to and has stated on several occasions he is determined to achieve. See below for more.
Nvidia Earnings Beat as AI Boom Continues
Blockbuster Nvidia earnings suggested the AI boom is far from over, with forecast sales growth of 70% for the next financial year. Its shares added only 2% over the week, following a big move on Thursday of +8.74% but a decline of -4.59% on Friday. Other big movers this week were in the software sector, as Salesforce surged +22% and CrowdStrike +20%.
Hawkish Fed Chair Warsh Lifts September Rate Hike Odds to 60%
In his first keynote speech from Jackson Hole, Fed Chair Kevin Warsh was more hawkish than many had expected and spoke for much longer (3,600 words) than expected, reemphasizing that the 2% inflation target was “firm and fixed.” He also said the Fed “had work to do” if progress toward the 2% inflation target was not made with “sufficient speed” – though there was little indication of how this was to be achieved.
Yields across the curve remain elevated, particularly at the long end, with the US 30-year closing at 5.21% and the benchmark 10-year higher at 4.72%. The Dollar had a good week again as expectations of a September interest rate hike moved to 60%, from around 34% on Thursday, following a more hawkish Chair Warsh.
Stocks Higher, Gold Pulls Back, Bitcoin Tops $81,000
Stock markets moved higher following the Nvidia results but closed down on Friday as higher interest rates look more likely. Over the week, however, all three major markets inched higher – the biggest winner was the NASDAQ at +0.85%. Spot gold markets hit $4,700 this week but, following the Warsh speech, declined to $4,450 by Friday’s close. The benchmark oil market, Brent, declined into the $86.00 zone on Wednesday before reversing above $90.00 on Thursday, as the war stalemate – now six months old – dragged on, and closed the week at $89.75. Bitcoin continued its rapid rise from the $62,000–$65,000 channel it had spent most of the summer occupying, breaking $80,000 and hitting a weekly top of $81,300 on Friday, before declining to $77,300.
The Week Ahead: Jobs Day, Central Bank Decisions, and PMI Data
Next week, the new season and new month kick off, with the data topped by US (and Canadian) Jobs Day on Friday. Ahead of NFP on Friday, there’s JOLTS on Tuesday, ADP Private Payrolls on Wednesday, and Weekly Claims on Thursday. There are also interest rate decisions from the BOC and RBNZ, and a raft of global PMI data.
Trade Safely!