Dollar Weakness Returns as Tech Stocks Hit Resistance

The US dollar's weakness returned last week, as technology stocks hit resistance. The S&P 500 fell 1.4 percent between August 14 and August 21, marking its first drop after three positive weeks. Tech companies associated with AI datacenters were particularly hard hit, including Jabil (JBL) and Flex (FLEX), which contract manufacture servers and power systems.

U.S. Treasury Secretary Scott Bessent's decision to increase purchases of long-dated U.S. Treasury debt on Tuesday pushed the US dollar to a three-month low, boosting gold, silver, and Bitcoin. This move also led to significant gains in cryptocurrency names like Coinbase (COIN) and copper miner Freeport McMoRan (FCX), which broke out to a new all-time high.

Other potential catalysts for the dollar's weakness include a collapsed trade deal with Canada and Bessent's expected announcement of sanctions against Iran, which could also target China. The Federal Reserve chairman Kevin Warsh is set to speak in Jackson Hole on Friday, which may further impact market sentiment.