MARKET SNAPSHOT

U.S. stocks were mixed and Treasury yields fell to their lowest levels of the year as recession fears persisted ahead of Wednesday's consumer-price index report. The dollar was largely unchanged and gold was higher. Oil futures set new lows for the year on concerns about demand from China.

MARKET WRAPS

EQUITIES

U.S. stocks finished mixed ahead of August CPI data Wednesday that could impact a Fed decision on the size of a rate cut when policymakers meet next week.

The Dow Jones Industrial Average fell 0.2%, the S&P 500 gained 0.5%, and the Nasdaq Composite climbed 0.8%.

JPMorgan fell 5.2% and Goldman Sachs slid 4.4% after Goldman CEO David Solomon noted a drop in deal-making activity, and after a long-anticipated, revised set of capital requirements from the Fed finally took form.

Earlier Tuesday, Chinese shares closed higher. Software and hardware stocks led the losses. Real estate stocks fell broadly as well.

The benchmark Shanghai Composite Index ended 0.3% higher, the Shenzhen Composite Index was up 0.3% as well, and the ChiNext Price Index edged 0.1% higher. Hong Kong's Hang Seng Index edged 0.2% higher, led by auto and consumer stocks.

Japan's Nikkei 225 ended 0.2% lower, down for six consecutive sessions.

Australia's S&P/ASX 200 closed 0.3% higher, with nine of 11 sectors finishing higher. The heavyweight financials rose 0.6% while the materials sector slipped 0.3%.

New Zealand's NZX-50 closed 0.1% higher, supported by gains among financial and aged-care stocks. Property and utility stocks were mixed.

COMMODITIES

Oil futures settled at their lowest levels in more than two years, with concerns about demand from China back in focus after another round of lackluster economic data.

West Texas Intermediate crude for October delivery fell 4.3% to settle at $65.75 a barrel. Front-month prices settled at their lowest since Dec. 1, 2021. November Brent crude, the global benchmark, declined by 3.7% to settle at $69.19 a barrel.

The Organization of the Petroleum Exporting Countries trimmed its forecast for crude demand growth for 2024 and 2025, feeding losses for oil even as Francine, a storm strengthening in the Gulf of Mexico, threatens significant disruptions to energy output.

"On the seasonal, driving season is over, and the market expects a normal softening from here on out," said Peter McNally, global head of analysts at Third Bridge. "At the same time, weaker economic news, particularly in China, (has) pressured some of the more bullish demand outlooks. This is the cyclical issue facing oil."

Front-month September gold futures settled up 0.4% to $2,512.30 an ounce -- higher for two consecutive sessions.

TODAY'S TOP HEADLINES

Fed Backpedals on Plan to Increase Big Bank Capital

The Federal Reserve is walking back a plan to raise the amount of capital America's biggest banks are required to hold, after intense pushback from the banking industry.

The regulator plans to require big banks to increase the reserves they hold against losses by 9%, the Fed's Vice Chair, Michael Barr, said in a speech Tuesday. Earlier proposals, which came after three major banks collapsed last year, would have increased them by an estimated 20%.

Banks holding less than $250 billion in assets-meaning most banks in the country outside of the very biggest-won't be subject to most of the new capital rules, except for lenders with large trading operations. An additional capital charge for the biggest banks because of their size and systemic importance would also be recalibrated, he said.

JPMorgan, Goldman Sachs shares move sharply lower on Solomon's deal comments, revised capital requirements

JPMorgan Chase & Co. and Goldman Sachs Group Inc.'s shares led sharp losses for bank stocks Tuesday, after Goldman Chief Executive David Solomon noted a drop in deal-making activity, and after a long-anticipated, revised set of capital requirements from the Federal Reserve finally took form.

Additionally, JPMorgan Chase CEO Jamie Dimon said he wouldn't rule out "stagflation" for the U.S. economy down the road, while consumer-finance company Ally Financial Inc. warned of pressure on its credit quality as consumers continue to struggle with inflation.

JPMorgan Chase's stock JPM was moving lower by 6.8% in what would be its worst one-day drop since June 11, 2020, when it fell by 8.34%. Goldman Sachs shares GS were retreating by 4.9%.

Starbucks's New CEO Targets Hectic Stores, Overwhelming Menus

New Starbucks Chief Executive Brian Niccol said that improving the company's U.S. store operations is his first priority, saying cafes need to be more welcoming and avoid being overwhelmed with to-go orders.

Niccol said Tuesday in a letter to Starbucks employees, customers and shareholders that baristas need time to better serve customers and deliver orders on time-particularly in the morning. The chain's cafes, he said, need to delineate between speeding to-go orders and providing an appealing environment for customers who prefer to linger.

"In some places-especially in the U.S.-we aren't always delivering," said Niccol, who stepped into the CEO role Monday. "It can feel transactional, menus can feel overwhelming, product is inconsistent, the wait too long or the handoff too hectic."

Goldman's Credit-Card Exit Hampered by Lax Lending Standards

Behind Goldman Sachs's messy departure from credit-card lending: lax underwriting standards.

The bank is facing mounting losses-including a roughly $400 million pre-tax hit disclosed Monday-as it tries to offload the remaining pieces of its Main Street lending business.

Goldman Chief Executive David Solomon said Monday the bank expects to incur the loss on the eventual sale of its General Motors credit-card business and a smaller, unrelated business.

Southwest Airlines Overhauls Board Amid Activist Pressure

Southwest Airlines Executive Chairman Gary Kelly will step down next year in a big board shake-up as the airline faces pressure from an activist investor to overhaul its leadership and business strategy.

Kelly, who has worked at Southwest for nearly 40 years, said he would voluntarily retire after next year's annual meeting. He served as Southwest's chief executive for about 18 years and has been its board chairman since 2008. He left the CEO role in 2022 to become executive chairman.

Elliott Investment Management earlier this summer announced it had built a big position in Southwest with the aim of revamping what it said was the airline's entrenched leadership-including Kelly. Elliott has said the airline needs swift changes to address what it has said is an outdated strategy and lackluster results.

Apple Loses Court Battle Over $14 Billion Irish Tax Bill

Apple and Alphabet's Google lost attempts to overturn multibillion-dollar rulings in the European Union on Tuesday, marking a win for competition authorities in the bloc in their efforts to rein in alleged abuses by big tech companies.

The European Court of Justice, the bloc's highest court, upheld an order for Ireland to recoup up to 13 billion euros, equivalent to $14.35 billion, plus interest in taxes from Apple.

The European Commission, the EU's executive arm, said in 2016 that Ireland had granted Apple benefits in contravention of EU state-aid rules, allowing the tech giant to pay substantially less tax than it owed. The commission asked Ireland to retrieve the sum in allegedly unpaid taxes between 2003 and 2014, plus interest, an order that both Apple and the Irish government appealed.