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Briefing.com Summary:

*Crude oil rally sends WTI past $100/bbl while Brent overtakes $105/bbl

*Hawkish rhetoric from Bank of Japan and rate hike from European Central Bank

*Little relief in August PPI data

The stock market has had a rough go so far during this holiday-abbreviated week, and things don't look much better this morning with futures on the S&P 500 and Nasdaq pointing firmly to the downside.

Rising oil has acted as a headwind this week, and that remains the case today as WTI crude rises past $100/bbl while Brent crude has overtaken $105/bbl. Conversely, Treasury yields have been pushed higher, producing a fresh round of 2026 highs for yields on all notes and bonds.

The rise in U.S. Treasury yields has been accompanied by similar moves in other bond yields, and not without reason. Overnight, Bank of Japan policymaker Masu said that the central bank needs to pull real rates out of negative territory, adding that accelerating inflation could force additional rate hikes. Meanwhile, this morning, the European Central Bank moved forward with a 25-basis point increase to its interest rate corridor. The move was widely expected, but it remains to be seen if the ECB sets the stage for another increase later this year.

Back on the home front, the PPI report for August has done little to allay rate hike concerns, as total PPI was up 0.4% month-over-month in August (Briefing.com consensus 0.4%) after a revised 0.1% increase (from 0.0%) in July. Core PPI, which excludes food and energy, was up 0.2% month-over-month (Briefing.com consensus 0.3%) after increasing a revised 0.3% (from 0.2%) in July. Total PPI was up 5.4% year-over-year, up from 4.8% in July. Core PPI was up 4.6% year-over-year versus 4.3% in July.

The key takeaway from the report is that while the slightly cooler-than-expected core PPI was a positive sight, it was essentially masked by the upward revisions to readings for July, so this report reinforces the market's expectations for a rate hike as early as next week.

Separately, initial jobless claims for the week ending September 5 decreased by 1,000 to 206,000 (Briefing.com consensus 208,000) from last week's revised total of 207,000 (from 206,000). Continuing jobless claims for the week ending August 29 also decreased by 1,000 to 1.774 million from last week's revised total of 1.775 million (from 1.779 million).

The key takeaway from the report is that initial claims remain locked in a narrow range right on their four-week moving average, signaling little overall change in layoff activity.

Treasuries have widened their starting losses in reaction to the PPI report, sending the 30-yr yield to its highest level since June 2007 ahead of today's $22 bln 30-yr bond reopening. The 30-yr yield is up five basis points at 5.34% while the 10-yr yield is up seven basis points at 4.90%, approaching its peak from 2023 (4.997%).

Lastly, President Trump appeared at the Republican midterm convention last evening, where he promised to cut $5,000 checks to all adult citizens if Republicans maintain control of Congress after the midterms. Fulfilling this pledge would cost over $1 trillion, so understandably, there are questions about the impact of such a move on an already-strained budget and elevated inflation.