Morning Briefing
Published
S&P 500 futures point to a slightly lower open, down about 0.4%, as a sharp jump in long-term Treasury yields overtakes the AI and nuclear-power rally that carried stocks through midweek. The 30-year yield rose to 5.70% overnight, its highest since 2002, pressuring rate-sensitive assets and reversing several of Wednesday's best performers.
Iran's rhetoric is hardening rather than easing. Tehran says the Strait of Hormuz will stay closed until its demands are met and that it will soon block what it calls illegal routes through the waterway, while a Revolutionary Guards adviser said weapons range can be extended as the battlefield requires. Iran's president called the situation "all-out war" and said the main obstacle to a deal is US maximalism, while a senior Iranian official told Reuters that Vice President Vance's comments on Iran's nuclear program reflect American demands rather than Iran's position. Secretary of State Rubio, in Greece, said Iran must not be allowed a nuclear program. Separately, the US mortgage rate jumped to 7.49% from 7.30%, and France's 10-year yield rose 15 basis points to 4.90% amid domestic political strain, with a euro zone official saying French yields have not spread contagion but that some political factions need to get serious about the budget.
Sector moves are split along the same lines as Wednesday night but in reverse. Technology is the weakest major group, dragged by chipmakers including Lam Research, Applied Materials, Micron and KLA, each down more than 2%, alongside Oracle. Energy is the lone sector holding gains, led by Exxon Mobil, Occidental and APA. Financials are soft, with Coinbase and Robinhood down more than 2% and the big banks broadly lower. Consumer Staples is higher even as Constellation Brands drops sharply, and Utilities slip as Constellation Energy gives back part of its nuclear-deal surge. Gold and silver-linked names are weak, with gold miners and the silver ETF each off more than 2%, as rising yields outweigh the safe-haven bid from the Hormuz standoff. Company News Constellation Brands guided fiscal 2027 adjusted earnings to $11.20-$11.90 per share and flagged organic sales growth of -1% to +1%, a soft outlook that is weighing on the stock. Lamb Weston beat first-quarter earnings estimates and raised its fiscal 2027 sales, EBITDA and EPS outlooks. McKesson and Clayton, Dubilier & Rice agreed to take Option Care Health private at $32.05 per share, an enterprise value of roughly $5.8 billion. Stryker's CEO Kevin Lobo will step down at year-end and move to Executive Chair, with President and COO Spencer Stiles taking over as CEO in January. Chevron agreed to divest its Hess Midstream stake and DJ Basin midstream assets for $200 million in cash plus improved Bakken terms, expecting a $3-4 billion after-tax loss and deconsolidation of about $3.7 billion in debt. Cintas confirmed its UniFirst acquisition remains on track for a year-end close after clearing FTC and Canadian antitrust reviews. Overseas Data
Germany's August industrial production rose 2% month-on-month, far above the 0.5% consensus and a sharp reversal from the prior 1.1% decline, a bright spot IMF chief Georgieva cited in calling Germany a "positive outlier."
Europe's Stoxx 600 is down 1% and French bond yields are climbing as political uncertainty in Paris persists. ECB officials Santos Pereira and Dolenc both said current policy leaves room for flexibility and that inflation remains well below 2022 energy-shock levels, while the EU set temporary import limits on Chinese hybrid vehicles, lifting European automakers.