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Briefing.com Summary:
*Interest rates are rising around the globe.
*Oil prices are up again amid continued military/diplomatic tension between the U.S. and Iran.
*The August ISM Manufacturing PMI at 10:00 a.m. ET has market-moving capability.
The equity futures market is under pressure to start the month of September. That disposition naturally elicits reference to the fact that, on average, September is historically the worst month of the year for the stock market.
Today's weakness, however, isn't so much about seasonality as it is about shifting fundamentals, namely rising interest rates around the globe.
Currently, the S&P 500 futures are down 52 points and are trading 0.8% below fair value, the Nasdaq 100 futures are down 396 points and are trading 1.3% below fair value, and the Dow Jones Industrial Average futures are down 317 points and are trading 0.6% below fair value.
Along with the "scary September" references, morning reports also feature attention to sovereign bond yields hitting their highest level in many years. Japan's 10-yr JGB (currently 2.99%) reached 3.00% for the first time since 1996; the UK's 10-yr gilt yield (currently 5.14%) reached its highest level since 2008; and the 10-yr German bund yield (currently 3.36%) reached its highest level since 2011.
The 10-yr note yield, for its part, climbed as high as 4.80%. That is up 63 basis points year-to-date and the highest it has been since January 2025.
The jump in sovereign bond yields has been linked to concerns about inflation, deficits, and supply concerns, each of which has unique pull on any given day but all of which are in the trading mix every day. The result has been a steady uplift for sovereign bond yields that has stirred competition concerns for stocks, as well as general growth concerns.
Inflation concerns are at the fore today, with oil prices continuing to rise in the face of ongoing military/diplomatic tension between the U.S. and Iran. WTI crude futures are up 2.3% to $87.72/bbl, and Brent crude futures are up 1.7% to $92.04/bbl.
The interesting component behind the rise in oil prices today is that Iran's president said Iran is willing to return to the memorandum of understanding with the U.S., provided the U.S. lives up to its commitments in that regard as well. In the past, that offer would have sent prices lower, yet the oil market—at least for now—doesn't appear sold on this offer, waiting most likely for President Trump's take on matters.
There isn't much in the way of corporate news to distract from these macro matters, not even the news from The Wall Street Journal that Anthropic agreed to a $35 billion cloud computing deal with NVIDIA (NVDA) supported Lambda.
NVDA is down 1.6% in pre-market trading, reacting in part to the higher interest rates that create headwinds for growth stocks.
The economic calendar will feature some insights this morning for Q3 growth prospects. The final reading for the August S&P Global U.S. Manufacturing PMI (prior 53.2) will be released at 9:45 a.m. ET. That report will be followed by the July Construction Spending report (Briefing.com consensus: 0.2%; prior -0.1%), the July JOLTS - Job Openings report (Briefing.com consensus: 7.390 million; prior 7.359 million), and the August ISM Manufacturing PMI (Briefing.com consensus: 55.3%; prior 55.6%) at 10:00 a.m. ET.
The most important component in that economic lineup will be the prices paid index for the August ISM Manufacturing PMI, as it is clear that sovereign bond markets have inflation and the specter of more rate hikes on their mind.
