September S&P 500 E-Mini futures (ESU26) are down -0.22% this morning as escalating hostilities in the Middle East pushed oil prices higher, fueling inflation concerns and sapping risk appetite.
Oil prices climbed on Wednesday as fighting between the U.S. and Iran intensified, with no clear path toward de-escalation in sight. Brent crude rose above $100 a barrel for the first time since July, while WTI crude climbed above $95 a barrel. The U.S. military destroyed five Iranian tankers on Tuesday in retaliation for attempts to strike a U.S. Navy warship with ballistic missiles, according to Central Command. Iran responded by launching ballistic missiles at Jordan and issuing a warning to ships in the Persian Gulf.
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Treasuries fell across the curve on Wednesday amid inflationary pressures from higher energy costs. The 10-year T-note yield rose two basis points to 4.81%.
In yesterday’s trading session, Wall Street’s main stock indexes closed lower as higher oil prices fueled inflation concerns. Amgen (AMGN) slumped over -10% and was the top percentage loser on the Dow and Nasdaq 100 after Novartis said on Friday that its experimental cardiovascular drug pelacarsen failed to meet the primary endpoint in a late-stage trial. Also, software stocks slid, with Atlassian Corp. (TEAM) and Thomson Reuters (TRI) falling over -6%. In addition, Boston Scientific (BSX) declined over -5% after the medical device maker said it was unlikely to meet its quarterly and full-year guidance targets following a major cyberattack in late August. On the bullish side, chip and AI infrastructure stocks climbed, with Intel (INTC) jumping over +9% and Seagate Technology Holdings (STX) surging more than +6%.
Economic data released on Tuesday showed that U.S. consumer credit rose by $18.1 billion in July, stronger than expectations of $11.9 billion.
Meanwhile, Barclays lifted its year-end target for the S&P 500 Index to 7,950 from 7,800 on Wednesday, citing robust tech-driven earnings and resilient AI-fueled growth.
Today, all eyes are on Apple’s (AAPL) annual iPhone event, set to begin at 1 p.m. ET. The tech giant is expected to unveil the new iPhone 18 Pro, the iPhone 18 Pro Max, and the much-anticipated iPhone Ultra, its first foldable device. This will be John Ternus’s first launch event as CEO after succeeding Tim Cook on September 1st.
Investors will also watch the U.S. Treasury’s announcement of the size of Thursday’s buyback operation for outstanding 10-year and 20-year bonds.
The U.S. economic data slate is largely empty on Wednesday.
Investor attention for the remainder of the week is centered on U.S. inflation gauges for August. The Bureau of Labor Statistics will release the producer price index on Thursday and the consumer price index on Friday, providing the final piece of the puzzle for Fed officials ahead of their meeting next week.
“Brace for a turbulent week, with inflation data set to swing market expectations for a Fed hold or hike next week,” said Krishna Guha at Evercore.
U.S. rate futures have priced in a 60.4% chance of a 25-basis-point rate hike and a 39.6% chance of no rate change at the September 15-16 policy meeting.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.81%, up +0.42%.
The Euro Stoxx 50 Index is down -1.37% this morning as the escalating conflict in the Middle East pushed oil prices higher and dampened sentiment. Economically sensitive sectors came under pressure on Wednesday after Brent crude climbed above $100 a barrel. “Risk appetite remains weak as rising oil prices occupy the headlines—and investors’ minds,” according to Ipek Ozkardeskaya at Swissquote. Data released on Wednesday showed that France’s monthly industrial production unexpectedly fell in July, adding to signs of weakness in an economy already hovering near recession. Meanwhile, Eurozone government bond yields climbed on Wednesday as rising oil prices stoked inflation worries. Investor focus now shifts to the European Central Bank’s monetary policy decision. The ECB is widely expected to raise the deposit rate by 25 basis points to 2.50% on Thursday to curb energy-driven inflation, which would mark its second rate hike of the cycle. The key question for investors will be whether the ECB keeps the door open for a third rate hike later in the year. In corporate news, Fortum (FORTM.H.DX) jumped over +12% after the Nordic energy company reached an agreement with Google to supply power to data centers in Finland.
France’s Industrial Production data was released today.
The French July Industrial Production unexpectedly fell -0.4% m/m, weaker than expectations of +0.2% m/m.
Asian stock markets today settled mixed. China’s Shanghai Composite Index (SHCOMP) closed up +0.28%, and Japan’s Nikkei 225 Stock Index (NIK) closed down -0.19%.
China’s Shanghai Composite Index closed higher today, buoyed by gains in stocks benefiting from disruptions caused by the Middle East conflict, while investors also digested the latest inflation data. Coal, defense, and shipping-related stocks climbed on Wednesday amid escalating hostilities in the Middle East and higher oil prices. However, the benchmark index’s gains were limited as investors digested the latest producer and consumer inflation data, which showed a clear divergence across sectors, reflecting the broader economy’s uneven momentum. The National Bureau of Statistics said on Wednesday that China’s consumer inflation picked up in August for the first time since April and factory-gate prices rose more than expected, as higher food and energy costs revived price pressures. Meanwhile, Bloomberg reported on Wednesday that China intends to allow its $568 billion social security fund to purchase offshore bonds through an investment link with Hong Kong, the latest move to bolster demand for yuan-denominated assets in the Asian financial hub. Elsewhere, The Information reported that Chinese regulators stepped up scrutiny of humanoid robotics startups seeking IPOs following a volatile market debut by industry leader Unitree Robotics. In corporate news, Excelland Robotics surged over +153% in its Hong Kong trading debut after raising $82.9 million in its initial public offering.
The Chinese August CPI rose +0.4% m/m and +0.8% y/y, compared with expectations of +0.3% m/m and +0.8% y/y.
The Chinese August PPI rose +3.8% y/y, stronger than expectations of +3.6% y/y.
Japan’s Nikkei 225 Stock Index reversed earlier gains and closed lower today as sentiment soured after escalating tensions in the Middle East drove oil prices higher. The Nikkei initially rose as much as 0.8% as chip-related stocks tracked overnight gains in their U.S. peers, but later turned lower as most chip-related shares gave up earlier gains, with weakness in financial and healthcare stocks adding further pressure on the benchmark index. Still, gains in machinery, energy, and mining stocks helped limit the Nikkei’s losses. Meanwhile, the yen advanced for a third consecutive day on Wednesday after U.S. Treasury Secretary Scott Bessent challenged traders to bet against the Japanese currency. “I am the house now, so when we intervene with the Japanese yen, I have pretty good insight into what the Japanese, what the Bank of Japan is going to do, what Japanese policymakers are going to do,” Bessent said. The stronger yen prompted traders in the bond market to scale back bets on aggressive rate hikes by the Bank of Japan, pushing Japanese government bond yields lower. On the economic front, private-sector data showed on Wednesday that business confidence among large Japanese manufacturers rose in September to its highest level since December 2021, supported by strong semiconductor and data-center-related demand. In corporate news, Asics gained over +1% after announcing plans to repurchase up to 70 billion yen worth of its own shares by the end of March 2027. Investor focus is now on a speech by BOJ board member Kazuyuki Masu on Thursday, the final scheduled appearance by a policymaker before the BOJ’s September meeting. With markets almost fully pricing in a rate hike by the BOJ next week, investors will watch for signals on the pace of further moves. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed down -1.56% to 31.55.
Pre-Market U.S. Stock Movers
Chip and AI infrastructure stocks edged lower in pre-market trading, with Intel (INTC) falling over -2% and Marvell Technology (MRVL) dropping more than -1%.
ServiceTitan (TTAN) tumbled over -17% in pre-market trading after the software company issued below-consensus Q3 revenue guidance.
Thermo Fisher Scientific (TMO) rose more than +1% in pre-market trading after UBS upgraded the stock to Buy from Neutral with a price target of $730.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Wednesday - September 9th
Sunbelt Rentals Holdings (SUNB), The Cooper Companies (COO), SailPoint (SAIL), Chewy (CHWY), Core & Main (CNM), AeroVironment (AVAV), Jersey Mike’s Subs (JMKE), Navan (NAVN), Korn Ferry (KFY), American Eagle Outfitters (AEO), Academy Sports and Outdoors (ASO), Wealthfront (WLTH), Caleres (CAL), J.Jill (JILL), Gloo Holdings (GLOO), Limoneira Company (LMNR), Perma-Pipe International Holdings (PPIH), Optical Cable (OCC), Lakeland Industries (LAKE).
On the date of publication, Oleksandr Pylypenko did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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