PPI lands with Brent above $101 and yields highest since 2023

The bond market is the story this morning. On Wednesday the 10-year Treasury yield touched its highest level since November 2023 and Brent crude settled above $101 a barrel, and the first of two August inflation reports lands at 8:30 a.m. ET, less than a week before a Fed meeting that markets have been treating as a live chance of a rate hike.

Rates did the damage, and rate-sensitive stocks paid for it

Wednesday was the third straight losing session. The S&P 500 fell 0.48% to 7,636.36, the Dow Jones Industrial Average lost 405.41 points, or 0.77%, to 52,380.66, and the Nasdaq Composite fell 0.64% to 26,253.34.

Treasuries were as much the trigger as oil. The yield on the 10-year note touched 4.857%, its highest since November 2023, after the Treasury announced a buyback of up to $6 billion in 10- to 20-year bonds that some investors had hoped would be larger, Reuters reported. Yields came off that high after strong demand at the $39 billion 10-year note auction. TLT, the long-bond fund, fell 0.57% to $81.73.

Our feed shows who felt it. Across the 100 stocks and funds we track, 75 of the 100 fell, 24 rose and one finished unchanged. IWM, the Russell 2000 proxy, fell 1.37%, a steeper loss than any of the big index funds. The stocks investors own for steady income fell together: T-Mobile (TMUS) lost 2.39%, AT&T 1.76%, Verizon (VZ) 1.33%, Prologis (PLD) 2.04%, NextEra Energy (NEE) 1.41% and Procter & Gamble (PG) 2.02%. Those are the names that compete most directly with a rising bond yield. XLY, the consumer discretionary fund, was the weakest sector fund, down 1.34%, with Amazon (AMZN) down 1.78%, Nike (NKE) 1.97% and Starbucks (SBUX) 1.93%.

Energy was the exception. XLE rose 0.83% to $65.31, the only one of the five sector funds in our feed to finish higher. Exxon Mobil (XOM) gained 2.22% to $164.23 and Chevron (CVX) 1.91% to $213.81. Gold turned too: GLD rose 0.91% to $403.35, a day after it fell on the Middle East headlines.

Oil is now a supply story with a political timeline

Brent rose 3.4% on Wednesday to settle above $101, the Associated Press reported, as US–Iran hostilities and Houthi attacks on Saudi energy facilities continued. The AP describes the conflict that began in February as having essentially shut down traffic through the Strait of Hormuz, and reports that President Trump said Wednesday that oil prices likely won’t fall until after the midterm elections. Early Thursday, Brent quotes ranged from about $100.40 to $101.25 depending on source and time, so the level is holding rather than extending.

Asia took the handoff badly. As of the AP’s 2:25 a.m. ET update, Hong Kong’s Hang Seng was down 1.5%, Australia’s S&P/ASX 200 was down 1.2% and the Shanghai Composite 0.4%, while Tokyo’s Nikkei 225 was 0.1% lower and South Korea’s Kospi was nearly unchanged. In the US, MarketWatch reported Dow and S&P 500 futures pointing higher and Nasdaq futures flat early Thursday as oil eased slightly.

This morning’s PPI and Friday’s CPI both measure August, before crude crossed $100, so neither can show this week’s move in oil. What they can do is confirm or undercut the inflation trend the Fed was already worried about. Since Fed Chair Kevin Warsh’s Jackson Hole speech, CNBC and others have described the September decision as close to a coin flip, with CME FedWatch odds of a quarter-point hike above 50% in late August. Those odds were set before oil crossed $100. The Fed announces its decision on September 16.

The AI trade moved one company at a time

The biggest gains on Wednesday came from specific product launches, not from a sector-wide bid.

Cloudflare (NET) rose 10.51% to $314.18, the best performer in our feed, after announcing an AI security product built with OpenAI that scans for software vulnerabilities and generates fixes. Meta (META) rose 6.55% to $653.69 on 35.8 million shares after launching Muse, a personal AI agent that can shop online, book flights and manage calendars, with a free tier alongside paid subscriptions. Its closest ad peer went the other way: Alphabet (GOOGL) fell 2.28% to $330.65. Datadog (DDOG) rose 7.15% to $225.27; we could not confirm a company-specific reason.

Application software did not recover from the selloff that followed OpenAI’s GPT-6 Astra launch. ServiceNow (NOW) fell 2.31% to $131.11 and Salesforce (CRM) 1.99% to $244.16. Shopify (SHOP) fell 5.45% to $126.79, tied for the worst performer in the feed with Affirm (AFRM), which also fell 5.45%, on a day when consumer fintech was weak across the board. Oracle (ORCL) slipped 0.55% to $161.63 and Adobe (ADBE) 0.93% to $254.86, both ahead of tonight’s results.

Semiconductors repeated Tuesday’s pattern. AMD rose 3.04% to $521.10, Micron (MU) 2.75% to $1,027.77 and Intel (INTC) 1.69% to $106.24 on 96.6 million shares, the most of any name in the feed. Nvidia (NVDA) fell 0.91% to $223.67 and Broadcom (AVGO) 1.13%. That is the second straight session in which money moved toward Nvidia’s challengers while Nvidia itself fell. Add up the winners and losers and the technology fund went nowhere: XLK finished flat, 0.00%, at $187.87.

Signet shows what a beat looks like when consumers are squeezed

The biggest move among established companies came from a jeweler. Signet Jewelers closed at $102.41, up 23.74% from $82.76, after second-quarter results and a higher profit forecast. Adjusted earnings came to $2.19 a share, ahead of the $1.74 analysts expected. Revenue was flat at about $1.5 billion and missed estimates, and the company raised its full-year adjusted earnings forecast to a range of $10.45 to $12.15 a share, from $9.20 to $11.

The gain came from margins and cost control, not from more sales. On a day when the consumer discretionary fund was the weakest sector fund on the board, that distinction matters. Investors rewarded a retailer for protecting profit on flat revenue, which says more about what they expect from consumers than a headline sales beat would have.

What to watch today

August Producer Price Index, 8:30 a.m. ET. The consensus is a 0.4% monthly rise in headline wholesale prices, after 0.0% in July.
Weekly initial jobless claims, 8:30 a.m. ET.
Treasury buyback of up to $6 billion in 10- to 20-year bonds, the operation whose size disappointed the bond market on Wednesday.
EIA weekly petroleum inventories, 12:00 p.m. ET, a day later than usual because of Labor Day.
30-year Treasury bond auction, 1:00 p.m. ET. The previous 30-year auction cleared at 5.216%.
Oracle fiscal first-quarter results after the close, with the call at 5:00 p.m. ET. The consensus is about $1.74 a share in earnings on $19.13 billion in revenue.
Adobe fiscal third-quarter results after the close, with the call at 5:00 p.m. ET.
August CPI, Friday at 8:30 a.m. ET. The FOMC decision follows on September 16.

Not financial advice. iTrading Buddy summarizes publicly available market data and news; every figure above is sourced from the reporting available before the US open on the date shown. Verify anything you act on.