General Market News

The August Consumer Price Index (CPI) met expectations with year-over-year inflation holding steady at 3.4% (core at 2.4%), following yesterday's higher-than-expected Producer Price Index of 5.4%. The 200+ basis point gap between wholesale and retail inflation suggests retailers are absorbing significant costs. These figures increase odds to 88% that the Fed will raise interest rates by 0.25% at next week's FOMC meeting.

• CPI rose 0.4% month-over-month in August (0.3% core), with year-over-year inflation flat at 3.4% and core inflation declining to 2.4%, the lowest of 2026
• Wide 200 bps gap between PPI (5.4%) and CPI (3.4%) indicates retailers are absorbing wholesale price increases rather than passing them to consumers
• Bond yields jumped to multi-year highs with the 10-year reaching 4.97% and 30-year hitting 5.32%, while oil prices rose 7.5% week-over-week to $99/barrel WTI

The federal budget deficit reached $2 trillion in the first 11 months of fiscal year 2026, according to the Congressional Budget Office. While the deficit is $6 billion lower than the same period last year, this is due to payment timing shifts; adjusted figures show the deficit would be $82 billion higher. The Committee for a Responsible Federal Budget warns that borrowing this year has already exceeded all of last year's total.

• Federal spending increased $147 billion (2%) year-over-year, driven by mandatory programs: Social Security rose $78 billion (5%), Medicare increased $73 billion (8%), and interest on the national debt jumped $111 billion (12%)
• Tax receipts increased $154 billion (3%) overall, with individual income taxes up $189 billion (8%), but corporate income taxes fell $96 billion (25%) due to the One Big Beautiful Bill Act tax reforms
• The gross national debt has surpassed $40 trillion, with annual interest costs now exceeding military spending and debt held by the public exceeding the entire size of the U.S. economy

Dutch private equity firm Waterland has ended its partnership with UK-based Giacom regarding a potential acquisition of British telecom company Gamma Communications. Waterland is continuing to evaluate its interest in Gamma independently, though no firm offer is certain. This follows Gamma's agreement to a 1,120 pence per share takeover by Epiris earlier this month, valued at £1.08 billion ($1.46 billion).

• Gamma Communications agreed to a £1.08 billion takeover by Epiris at 1,120 pence per share in early September, after months of negotiations
• Multiple private equity firms have pursued Gamma this year, including Oakley Capital and Providence Equity Partners, both of which withdrew bids in June
• Waterland was previously planning to act in concert with Giacom, which would have acquired certain Gamma business units as part of the deal structure

QatarEnergy is negotiating multi-year U.S. LNG contracts through 2031 with producers including Venture Global, Cheniere, and Woodside to replace capacity lost from Iranian attacks on its Ras Laffan facility in March 2026. The strikes damaged two of 14 LNG trains and a GTL facility, sidelining 12.8 million tons per year of capacity for three to five years. This marks a shift from spot cargo purchases to longer-term solutions as the Strait of Hormuz remains closed.

• QatarEnergy Trading is seeking 2-3 million metric tons per annum through 2031, with force majeure notices extended monthly through November and potentially beyond
• The damaged infrastructure has taken out 12.8 million tons per year of LNG capacity, affecting deliveries to Asian clients who comprise about 80% of Qatar's typical LNG exports
• Analysts interpret the long-term contract pursuit as signaling that Qatar expects the Strait of Hormuz disruption to be longer-lasting and infrastructure damage more extensive than initially anticipated

Wall Street rebounded Friday with the Dow gaining 400 points as inflation data met expectations and oil prices retreated from recent highs. US consumer prices rose 3.4% year-over-year in line with forecasts, while Brent crude fell 3% to $104.42 per barrel. The rally helped major indexes break a four-day losing streak, their longest since June.

• The S&P 500 gained 0.9% and Nasdaq rose 1%, ending a four-day decline as oil pulled back from near $110 per barrel overnight
• Two-year Treasury yield rose to 4.57% while the 10-year yield fell to 4.92%, suggesting bond markets expect Fed rate hikes will control long-term inflation
• Oracle climbed 2.6% and Kroger rose 4.2% on better-than-expected earnings, while ACV Auctions soared 44.3% on a $10.50 per share acquisition offer from Copart

Major U.S. stock indices rebounded on Friday as oil prices retreated from elevated levels, with the Nasdaq, Dow Jones, and S&P 500 all posting gains. Markets looked past a hotter-than-expected 0.3% month-over-month core CPI reading, focusing instead on falling energy prices that could ease inflationary pressures. Key technical support levels held across all three indices despite elevated U.S. interest rates.

• The S&P 500 bounced from the critical 7,600 level, which coincides with its 50-day EMA, with the previous resistance now acting as support
• Oil price declines drove optimism particularly for industrial stocks in the Dow Jones 30, offsetting concerns about the 0.3% monthly core CPI increase
• All three indices are hugging their 50-day exponential moving averages, suggesting consolidation patterns remain intact despite high U.S. interest rate environment

US stocks rebounded Friday with the Dow surging 520 points after four straight sessions of losses, driven by a retreat in oil prices from their weekly highs. Despite the rally, investors now price in a 90% chance of a Fed rate hike next week after core CPI came in 0.1 percentage point above expectations at 0.3% monthly. Energy prices remain elevated for the week, with both WTI and Brent crude still up approximately 8% despite Friday's pullback.

• Oil prices fell 3% on Friday (WTI to $99.28, Brent to $104.32) but remained on track for 8% weekly gains amid ongoing US-Iran tensions and Middle East supply concerns
• August core CPI rose 0.3% monthly (above 0.2% forecast), pushing Fed rate hike probability to ~90% for next week's meeting and pressuring rate-sensitive growth stocks
• Gasoline jumped 3.9% and accounted for over one-third of overall CPI gains, with the broader energy index up 16.3% year-over-year

Fed Chairman Kevin Warsh faces a critical test at the September 15-16 Fed meeting after August CPI data showed core inflation rising 0.3% monthly and headline inflation at 3.4% year-over-year, both above expectations. Warsh has repeatedly warned that inflation remains above the Fed's 2% target and should be the central bank's main focus, but other Fed officials like Governor Waller have signaled willingness to wait for more data. If Warsh doesn't raise rates after his hawkish rhetoric, he risks undermining his credibility and raising questions about who is truly driving Fed policy.

• Core CPI rose 0.3% in August (above expectations) with headline inflation at 3.4% year-over-year, creating pressure on Warsh to act after repeatedly emphasizing price stability as the Fed's 'predominant focus'
• Fed Governor Waller and NY Fed President Williams have taken a more data-dependent approach, with Waller stating he would support holding rates steady if disinflation continues, creating potential internal Fed divisions
• Market speculation questions whether political considerations from President Trump or other figures like Treasury Secretary Bessent may be influencing Warsh, though there is no evidence of this; failure to act could fuel these theories and cause markets to price in Fed leadership uncertainty

Over 20 members of Congress called for stronger AI regulation this week after Anthropic researcher Jacob Coxon quit his job, warning that AI companies are 'gambling with our lives' and that AI could cause human extinction by decade's end. His post garnered over 150 million views on X, prompting bipartisan lawmakers to push for action, though Congress is mostly out of session until midterms.

• Multiple AI bills have been introduced, including the 'AI Kill Switch Act' requiring shutdown capabilities and legislation to temporarily pause advanced AI development until federal safety rules are established
• Sen. Ruben Gallego proposed creating a bipartisan Senate Select Committee on AI, noting that current jurisdiction is 'scattered across multiple Senate committees' with no unified oversight
• More than half of Americans are now more concerned than excited about AI use in daily life, up from 37% in 2021, with growing associations between AI and job loss

Germany's largest power producer RWE signed preliminary agreements with UAE entities to cooperate on offshore wind projects and LNG supplies, strengthening ties between the two countries amid geopolitical uncertainty. The deals include a potential €3 billion investment in German offshore wind auctions in 2027 with UAE's Masdar and LNG supply agreements with ADNOC starting in the early 2030s.

• RWE and UAE's Masdar signed an MOU for possible joint participation in German offshore wind auctions in 2027, representing potential investment exceeding €3 billion ($3.5 billion)
• RWE signed a letter of intent with ADNOC for up to two LNG offtake agreements to supply German, European, and Asian markets from the early 2030s
• The cooperation builds on Germany-UAE trade relations worth $15.5 billion annually as both countries seek closer ties amid growing political uncertainty including the war in Iran

Inflation held steady at 3.4% annually in August, matching July's rate and expectations, but core CPI rose 0.3% monthly—hotter than the 0.2% forecast. The mixed data leaves uncertainty about the Federal Reserve's upcoming interest-rate decision next week, as inflation remains above the Fed's 2% target.

• Core CPI increased 2.4% year-over-year and 0.3% monthly, exceeding the expected 0.2% monthly rise
• Gasoline prices surged 3.9% and accounted for over one-third of the overall inflation rate
• Overall CPI remains at 3.4% annually, significantly above the Fed's 2% inflation goal

US consumer prices remained elevated in August with inflation at 3.4%, driven by higher energy costs stemming from conflict with Iran. Core inflation rose to 2.4%, while diesel prices exceeded $6 per gallon for the first time and gas averaged $4.29 per gallon. The Federal Reserve faces a critical decision on whether to raise interest rates at its upcoming meeting to combat persistent inflation.

• Diesel prices surpassed $6 per gallon for the first time ever, while gas prices averaged $4.29, up $1.10 from a year earlier
• The Fed's board meeting next week will decide on interest rates, with three members dissenting at the July meeting for the first time in a decade
• Consumer sentiment has dropped to record lows as Americans struggle with affordability, creating political pressure ahead of midterm elections

Consumer prices rose 0.4% in August on a monthly basis, with annual inflation at 3.4%, matching economist expectations ahead of the Federal Reserve's next meeting. Core inflation, excluding food and energy, increased 0.3% monthly and 2.4% annually, slightly hotter than July's monthly reading. The elevated inflation data will factor into the Fed's decision on potential interest rate changes next month.

• Headline CPI increased 0.4% month-over-month in August, up from 0.1% in July, while year-over-year inflation held steady at 3.4%
• Core CPI rose 0.3% monthly (above July's 0.2%) but annual core inflation cooled slightly to 2.4% from 2.5% the previous month
• The mixed inflation signals come as the Federal Reserve weighs potential interest rate adjustments at its upcoming September meeting

Consumer prices increased 0.4% in August, meeting expectations, but core inflation (excluding food and energy) came in higher than the 0.2% forecast. The report is significant for monetary policy decisions as it shows inflation persisting above target levels.

• The all-items consumer price index rose 0.4% month-over-month in August, matching Dow Jones consensus estimates
• Core inflation exceeded the expected 0.2% monthly gain, suggesting underlying price pressures remain elevated
• Annual inflation projections stood at 3.4% for headline CPI and 2.4% for core CPI

U.S. wholesale prices rose 0.4% in August 2026, driven by diesel costs, exceeding the Federal Reserve's 2% annual inflation target. The Fed faces a critical interest rate decision next week before receiving its preferred inflation gauge, the PCE index. Retirees on fixed incomes are particularly vulnerable as rising costs erode purchasing power while wages remain essentially flat.

• Consumer Price Index reached 333.918 in July 2026, up from 323.048 a year earlier, with headline PCE inflation at 3.7% year-over-year and energy prices 15.31% higher
• Real average hourly earnings remained flat at 11.31 in July 2026 versus 11.32 a year earlier, meaning paychecks are losing the inflation race while gasoline hit $4.16 per gallon
• Retirees are most at risk as 57% cite inflation as their top obstacle, with fixed pension and annuity payments losing purchasing power while they cannot negotiate raises like working households

US stock futures rose on Friday morning, with Dow, S&P 500, and Nasdaq futures up 0.5-0.6%, as investors awaited key August inflation data ahead of a potential Federal Reserve rate hike. The uptick offered relief after major indexes suffered four consecutive days of losses, putting them on track for weekly declines.

• August Consumer Price Index data is expected to show inflation at 3.4% year-over-year, unchanged from July and well above the Fed's 2% target
• Traders are pricing in a 72% probability of a Fed rate hike this month, with concerns heightened by rising oil prices
• Oracle shares jumped over 5% in premarket trading following strong cloud computing growth driven by AI data center investments

Global shipments of sub-$100 smartphones fell nearly 60% year-over-year in Q2 2026, with 173 million such devices shipped in 2025. The decline is driven by soaring memory costs as chipmakers prioritize higher-value AI infrastructure products over smartphone components. Chinese manufacturers like Xiaomi are abandoning the low-end segment as these devices become uneconomical to produce.

• Memory now represents almost 60% of the bill of materials for smartphones priced below $200, making low-end phones 'uneconomic to manufacture' according to IDC.
• Xiaomi's average selling price has risen approximately 30% since 2023 to $197, while Oppo's has increased similarly to $300, with less than 20% of Xiaomi's China volume now below $200.
• Analysts expect prices will not return to 2024-2025 levels as memory manufacturers have little incentive to add capacity for the low-end market, even if supply constraints ease.

The International Energy Agency warned that global oil refining systems are 'stretched to the limit' due to ongoing conflicts in Iran and Ukraine. The IEA cut its 2026 global oil supply forecast by 6% and expects demand to fall by 2.5 million barrels per day in 2026, significantly more than previously projected. Shrinking inventories and strained refineries threaten to further tighten already disrupted oil markets.

• Global oil supply is expected to decline by 5.7 million barrels per day in 2026, a 6% drop from 2025 levels, worse than the previously forecast 4% decline from August
• Oil demand forecast was cut to a decline of 2.5 million bpd this year, significantly higher than the 1.6 million bpd drop predicted in August
• Oil prices traded above $100 per barrel for the first time since mid-May, with Brent at $104.44 and WTI at $99.86, as conflicts disrupt flows through key choke points like the Strait of Hormuz and Bab el-Mandeb

Escalating U.S.-Iran tensions have pushed crude oil prices above $100/barrel for the first time since July, driving global borrowing costs higher and raising inflation concerns. The 10-year U.S. Treasury yield is approaching 5% as markets await the August CPI report and next week's Federal Reserve meeting, where rate hike uncertainty is at multi-year highs.

• Brent crude spiked 6% to nearly $108/barrel on Thursday amid Iranian military strikes, Houthi advances threatening the Bab el-Mandeb Strait, and U.S. seizures of Iranian tankers, creating supply uncertainty and a sustained risk premium
• U.S. Treasury yields surged across the curve: the 10-year hit 4.9%, the 30-year reached a nearly two-decade high above 5.38%, and the 2-year climbed to 4.6%, its highest in 14 months
• Fed funds futures traders are pricing in over 65% probability of a quarter-point rate increase at next week's meeting, with today's August CPI report expected to be pivotal in determining the Fed's decision

Global bond yields are surging as oil prices near $100 per barrel fuel stagflation concerns—the combination of weak economic growth and high inflation. German 10-year bond yields hit 3.5%, the highest since April 2011, while energy costs soar amid shipping disruptions in the Strait of Hormuz and Red Sea. Central banks, including the ECB, may need to maintain restrictive monetary policy if energy pressures persist.

• German 10-year bond yields crossed 3.5% for the first time since 2011, with yields rising across Asia Pacific markets (Australia up 12 basis points, South Korea up 8 basis points)
• Brent crude futures trading at $105.4/barrel could rise to $120 if Strait of Hormuz disruptions persist, according to HSBC analysts, with prices potentially remaining elevated until Q3 2027
• France downgraded its 2026 growth forecast to 0.4% from 0.7%, while Germany's Bundesbank indicated the ECB may need to move rates into 'mildly restrictive territory' to combat inflation