Market Wrap
Published
The S&P 500 slipped 0.2%, caught between a bond market that kept pushing long-end yields to multi-decade highs and an oil market that reversed hard on signs the Strait of Hormuz standoff is easing. The 30-year Treasury yield touched 5.61%, its highest since 2002, and the 10-year traded near 5.28%, as Fed officials pushed back on the idea of looking through the energy-driven inflation shock even as consumer confidence fell to 81.9 versus 89.0 expected and August JOLTS job openings missed at 7.079 million.
Fed Governor Barr said the Fed won't hit its 2% inflation target without adjusting policy, and Chicago's Goolsbee called five and a half years of above-target inflation "playing with fire." But New York Fed President Williams said there is no urgency to act after September's hike, and traders responded by cutting the odds of an October increase to roughly 50-50 from 70% and pricing only one more hike this year. Brent crude settled down 2.56% at $102.59 a barrel as mediators reported progress on a framework in which Iran would allow free passage through Hormuz in exchange for the US easing its port blockade, and OPEC+ delegates signaled steady quotas for November. The US also offered up to 40 million barrels from the Strategic Petroleum Reserve, and Washington pressed Europe to draw down diesel reserves. Energy stocks fell 0.9% (XLE) as crude reversed, with SLB down 3.1%, Halliburton down 2.8% and NOV down 2.7%. Utilities were the strongest sector, up 1.2%, alongside a drop in yields' inflation premium being offset by defensive positioning. Financials fell 0.3% even as Cboe Global Markets rose 3.9% and AIG gained 3.5%, while FactSet Research dropped 2.3%. Materials fell 0.8%, led down by Olin (-3.7%) and Nucor (-3.3%). Consumer Discretionary was roughly flat as cruise operators surged on easing fuel-cost fears, with Carnival up 13.5%, Royal Caribbean up 7.5% and Norwegian Cruise Line up 3.6%. Chip-equipment names lifted Technology modestly, with Applied Materials up 5.0%, Corning up 4.9% and Oracle up 4.0%, while Apple fell 2.7%.
Company News
- Fair Isaac collapsed 26.9% on the session.
- Carnival reported Q2 EPS of $1.43, topping estimates, and raised its full-year 2026 adjusted net income outlook by more than $150 million.
- CarMax posted EPS of $1.16, well above expectations, with revenue of $7.88 billion versus $7.05 billion expected.
- AMD agreed to acquire World Labs for $8.2 billion to bolster its AI hardware roadmap.
- Jefferies Financial Group beat on EPS and revenue on record investment banking and equities results, with SMBC raising its stake to roughly 20%.
- Summit Therapeutics secured a $2.0 billion strategic equity investment from AstraZeneca.
- Wells Fargo Investment Institute cut its 2027 gold target to $5,200-$5,400 an ounce and raised its 10-year Treasury yield forecast to 5.25%-5.75%.