Midday Mashup
Published
The tension between cooling inflation data and a still-unsettled Middle East is defining the session. Core PCE for the second quarter came in at 3.3%, below the 3.6% expected, gross domestic product grew 2.2% versus 1.5% expected, and September nonfarm payrolls rose 90,000, well above the 75,000 estimate. Traders have pared bets on an October Fed hike in response, even as the 30-year Treasury yield sits near multi-decade highs and mortgage rates remain elevated.
Geopolitics has not cooperated with the calmer data. Israeli officials, including Netanyahu and Defense Minister Katz, describe a security incident on a flydubai flight from Dubai as an attempted jihadist hijacking. Separately, President Trump announced the last American forces are leaving Iraq, ending Operation Inherent Resolve, while NATO's Rutte said there is no imminent threat to alliance territory despite a Russian letter warning on nuclear issues. Gold extended gains after the PCE data, last up 0.6% at $4,206.29 an ounce, a sign investors are not fully discounting the risk.
Europe's fiscal strains are widening in parallel. Italy's bond risk premium topped 100 basis points for the first time since March, and France's premium hit 120 basis points, a level last seen in 2012, after ECB President Lagarde called France's debt position, at 120% of GDP, "serious" with no clear path lower. She also ruled out a French presidential run.
Energy markets are reacting sharply to supply data: diesel futures jumped 4.5% after the EIA report even as US crude production hit a record and Cushing inventories rose 553,000 barrels.
Stock moves reflect the same split. HP Enterprise rose 5.4% on its networking guidance raise, Gen Digital gained 6.3%, Cboe Global Markets climbed 5.3%, Enphase Energy added 4.2%, and AST SpaceMobile rose 4.1%. On the downside, Jabil fell 8.9% despite beating estimates, Moderna dropped 6.0% after naming a new COO, Fidelity National Financial slid 4.5%, Constellation Energy lost 4.4%, and Fair Isaac fell 4.3%.
Elsewhere, Skyworks Solutions confirmed regulatory clearance to close its Qorvo merger around October 5, and Lockheed Martin struck a new Black Hawk production deal with the US Army. Corteva's Vylor subsidiary extended its debt exchange deadline tied to the planned corporate separation.