Stock Market Update

Equity futures point to a firmly lower open this morning amid renewed upward pressure on Treasury yields and oil prices. Crude oil is currently up $3.95 (+4.5%) to $92.22 per barrel amid reports that tanker traffic through the Strait of Hormuz has been reduced significantly as Iran increases attacks. Additionally, President Trump has signaled in recent interviews that he does not necessarily want to reach a deal with Iran and is considering a massive bombing campaign against the country.

The 10-year note yield is currently up five basis points to 5.33%, reversing much of yesterday's afternoon retreat following a strong 10-year note reopening. Stocks recovered substantially from their morning lows yesterday as yields eased, although the rebound was concentrated in mega-cap and technology stocks while smaller companies and other rate-sensitive areas remained under considerable pressure.

The renewed rise in oil prices and Treasury yields threatens to undermine that recovery, with higher energy costs adding to inflation concerns and elevated borrowing costs continuing to weigh on the broader market.

Initial and continuing jobless claims are due at 8:30 ET, followed by August wholesale inventories at 10:00 ET.

Today's remaining economic calendar:

• 8:30 AM ET: 10/03 Initial Claims; Briefing.com consensus 200K; prior 197K
• 8:30 AM ET: 09/26 Continuing Claims; prior 1701K
• 10:00 AM ET: August Wholesale Inventories; Briefing.com consensus 0.7%; prior 1.3%
• 10:30 AM ET: 10/03 EIA Natural Gas Inventories; prior +64 bcf

In corporate news:

• Broadcom (AVGO 370.63, -5.88, -1.6%) is seeking $50 billion in financing for OpenAI’s custom chips, according to The Wall Street Journal,
• PepsiCo (PEP 126.45, +2.72, +2.20%) topped third-quarter earnings and revenue expectations. Its fiscal 2026 EPS outlook was below consensus, while its revenue guidance was above consensus.
• Taiwan Semiconductor Manufacturing (TSM 465.04, -7.16, -1.52%) reported that September revenue increased 54.6% from a year ago and decreased 0.6% from August.

Reviewing overnight developments:

According to Nikkei, Asian markets finished broadly lower as investors considered the Fed's hawkish message, elevated oil prices and Treasury yields, and the prospect of further Bank of Japan tightening.

In news:

• Mainland Chinese markets reopened after the National Day holiday, with attention turning to next week's inflation and trade data following Beijing's recently announced stimulus measures.

In economic data:

• Japan's August Current Account JPY4.062 trln (expected JPY3.194 trln; prior JPY2.989 trln) and Adjusted Current Account JPY2.98 trln (expected JPY2.14 trln; prior JPY2.52 trln); September Economy Watchers Current Index 47.0 (expected 46.7; prior 46.4)
• Hong Kong's September S&P Global PMI 49.2 (prior 49.5)
• Australia's October MI Inflation Expectations 5.3% (prior 4.9%)
• South Korea's August Current Account $46.11 bln (prior $42.08 bln)

Equity Markets:

• Japan's Nikkei: -1.4%
• Hong Kong's Hang Seng: -1.4%
• China's Shanghai Composite: -0.8%
• India's Sensex: -1.4%
• South Korea's Kospi: -2.6%
• Australia's All Ordinaries: -0.8%

European markets are broadly lower amid rising oil prices, renewed selling in sovereign bonds, and persistent inflation and interest-rate concerns.

In news:

• Middle East tensions remain in focus following reports that the White House requested options for potential strikes on Iran.
• Tesco raised its full-year guidance and increased its share repurchase plan after reporting higher first-half adjusted operating profit.

In economic data:

• Germany's August Trade Balance EUR19.5 bln (expected EUR19.0 bln; prior EUR21.6 bln); Exports -0.8% m/m (expected 0.8%; prior -0.5%) and Imports 0.9% m/m (expected 2.8%; prior -5.5%); September Car Registrations 9.0% yr/yr (prior 2.6%)

Equity Markets:

• STOXX Europe 600 : -1.0%
• Germany's DAX : -1.0%
• U.K.'s FTSE 100 : -0.4%
• France's CAC 40 : -0.9%
• Italy's FTSE MIB : -1.4%
• Spain's IBEX 35 : -1.2%