Morning Briefing, September 18, 2026

S&P 500 futures are flat, masking a genuinely complex risk environment where an escalating Strait of Hormuz crisis and a hawkish Bank of Japan move are pushing against the AI-driven optimism that carried equities higher through yesterday's session.

The geopolitical picture darkened materially overnight. Iran's IRGC struck the Togo-flagged tanker Trend in the Strait of Hormuz, which caught fire and stopped, and a second tanker was struck by an unknown projectile per UK Maritime Trade Operations, which has separately classified threat levels in the Strait as severe. Warning sirens sounded in Jeddah and flights at Jeddah Airport halted after a projectile was reportedly fired at the city. Saudi Arabia has informed European oil refiners they will receive no crude next month after last week's drone strikes hit three pump stations on the kingdom's east-west pipeline. Trump told Axios he is at a turning point on whether to resume large-scale attacks on Iran, adding that Iran wants a deal but is not ready. Pakistan has declared emergency measures including early market closures, a 50% fuel consumption reduction, and restrictions on foreign travel, a direct signal of regional energy stress translating into economic disruption. Brent settled at $104.82 and WTI at $101.91 on Wednesday, though supply risk remains elevated.

The Bank of Japan raised its overnight call rate to 1.25%, and Governor Ueda kept markets uncertain during his press conference, ruling out no further options, declining to commit to a pace, and noting the bank can act without a long observation period. The yen fell 1% against the dollar following those remarks, a reaction markets interpreted as more cautious than hawkish. Citigroup now forecasts additional BOJ hikes in December, March, and July. JPMorgan has also pulled forward its ECB call, expecting a 25 basis point hike in December followed by another in March 2027. Standard Chartered shifted its Fed forecast to a 25 basis point hike in December, adding a third major central bank to the hawkish pivot column. ECB President Lagarde said the bank sees no second-round inflation effects and will respond meeting by meeting, while eurozone three-year inflation expectations ticked up to 2.9% from 2.7% in August.

The growth and momentum trade that drove semiconductors yesterday is holding into the pre-market. Technology leads sectors at +0.2%, with Corning and Intel the standouts, and the semiconductor ETFs adding around 0.5% to 0.9%. Alphabet is the clearest single-name mover, up 2.4% across both share classes. Momentum and growth factors lead, with value and dividend ETFs flat to negative. Energy is the weakest sector at -0.5%, consistent with the supply disruption dynamic. Robinhood gains 2.7% and Coinbase 1.6%, tracking a broader crypto bid after the SEC rolled out a five-year exemption for tokenized stock trading. Silver is up more than 3% to above $67 per ounce, functioning as both a safe-haven and inflation hedge in the current environment.

Company News

Nvidia's chief executive says the company will sell twice as many chips next year as this year. Nvidia also commits $2 billion to the Brookfield AI Fund. Nvidia is up 0.2% pre-market.
Texas Instruments raises its quarterly dividend 7% to $1.52 per share, marking 23 consecutive years of increases. Texas Instruments is up 0.7% pre-market.
Philip Morris International raises its quarterly dividend 8.8% to $1.60 per share, the company's annual increase since going public in 2008. Philip Morris is down 0.7% pre-market.
Lockheed Martin and the Pentagon agreed to accelerate production of a new missile system. The company's CFO warned that Q3 may show lower program risk retirements than Q2 and some margin lumpiness.
Northrop Grumman's chief executive says the company plans its first Sentinel missile test in 2027, earlier than previously anticipated.
General Motors will produce Patriot missile parts as the US faces a reported arms shortage.
CoreWeave increased its convertible senior notes offering to $3.7 billion from $3.0 billion.
Aon priced $13.5 billion in senior notes across seven tranches to fund its acquisition of USI Advantage Corp.
Berkshire Hathaway appoints Warren Buffett as chairman emeritus.
Netflix is down 3.2% pre-market, the sharpest single-stock decliner in the session.
The US administration announces most-favored-nation drug pricing for Medicaid across all 50 states, a development with broad implications for pharmaceutical sector margins.
Caesars Entertainment and Fertitta Gaming Holdco each received a Second Request from the FTC in connection with their pending merger, extending the HSR waiting period.
Rexford Industrial completed the sale of a 22-property industrial portfolio to an EQT Real Estate affiliate for approximately $1.2 billion, part of its $2.0 billion non-core portfolio realignment.

Overseas Data

The Bank of Japan raised its overnight call rate to 1.25%. Governor Ueda said no policy options are off the table and the bank can act without a long observation period, though he cautioned that large or repeated hikes risk overshooting. The yen fell 1% against the dollar following his remarks. Citigroup now expects further BOJ hikes in December, March, and July.

European equity futures are soft, with the Eurostoxx 50 down 0.3%, the DAX down 0.5%, and the FTSE 100 down 0.2%. The French 10-year bond yield premium over German bunds widened to 100 basis points. France's prime minister warned that without corrective measures the 2027 budget deficit would exceed 6.5% of GDP. Eurozone three-year inflation expectations rose to 2.9% from 2.7% in August. ECB President Lagarde said the bank sees no second-round effects and will proceed meeting by meeting. JPMorgan now expects the ECB to hike 25 basis points in December and again in March 2027. Saudi Arabia informed European refiners they will not receive crude next month, adding a supply shock dimension to the region's already elevated energy costs. The Eurogroup is considering an emergency meeting in response to rising energy prices.