PANews said a combination of higher oil prices, firmer inflation readings and rising Treasury yields cooled risk appetite across markets overnight. Oil moved above $100 a barrel as conflict tied to Red Sea shipping routes escalated, U.S. August PPI came in hotter than expected, and the 10-year Treasury yield moved close to 5%, pushing the implied probability of a 25-basis-point Federal Reserve hike next week to about 72.4%.
Oil, inflation and Treasury yields rose at the same time
According to the report, conflict in the Middle East spilled into the Red Sea shipping lane and sent crude above the $100 mark. WTI crude futures jumped 7.5% to around $104 a barrel, while Brent crude futures rose 6.6% to about $104 a barrel. Both contracts climbed above $100, hit their highest levels since mid-May and posted their biggest one-day gain in nearly two months.
PANews said Houthi forces took control of Yemen’s Mokha port and deployed across the Hanish Islands, sharply raising shipping risks in the Red Sea and the Bab el-Mandeb Strait. Transit through the Strait of Hormuz remained constrained, while Iran-related conflict continued. Energy trader Rebecca Babin said the market was repricing both the intensity and the duration of geopolitical risk.
Diesel added to the inflation story. The report said diesel prices broke above $6 a gallon for the first time, up nearly 60% since late February. Inventories were 13% below the five-year seasonal average, and the diesel crack spread moved above $110 a barrel to a record high, adding pressure to broader inflation expectations.
U.S. August PPI rose 5.4% from a year earlier, slightly above expectations, while core PPI rose 4.6%. CME data showed the probability of a 25-basis-point Fed rate increase next week climbing to roughly 72.4%. Ray Remy of Daiwa Capital Markets said, 「The bond market has made it very clear that the Fed is going to raise rates. It is not waiting for CPI to make that call.」
Stocks, bonds and gold all came under pressure
U.S. equities fell for a fourth straight session, the longest losing streak since June. The Dow Jones Industrial Average dropped 0.60%, the S&P 500 fell 0.58%, and the Nasdaq Composite lost 0.65%.
The U.S. Treasury had planned to repurchase as much as $6 billion of 10-year to 20-year bonds, but bought only $5.187 billion, below the cap, against about $10.5 billion in bids. Treasury Secretary Bessent said the Treasury market was 「very healthy」 and that buybacks would take place only when prices were cheap enough. He said bondholders’ reluctance to sell at lower prices showed continued confidence in long-duration Treasuries.
Even so, long-end yields kept climbing. The 10-year Treasury yield rose to 4.975%, close to the 5% psychological threshold and the highest level since October 2023. The 30-year yield climbed to 5.381%, the highest since June 2007, while the 2-year yield reached its highest level of 2024.
Sam Stovall, chief investment strategist at CFRA, said a break above 5% on the 10-year would not be positive because investors treat that level as a major psychological line. Mark Hackett, chief market strategist at Nationwide, said the bigger risk now was whether a clearly stronger-than-expected CPI print would push stocks into a more lasting decline.
The U.S. dollar index edged up about 0.3%. Spot gold fell 1.93%, dropping below $4,400 an ounce and briefly testing the area around $4,310. Industrial metals also weakened. London copper fell 4.25% and New York copper dropped 5.26%. Among related names, Taseko Mines fell 10.19%, Ero Copper lost 8.55%, Southern Copper dropped 7.23%, Freeport-McMoRan fell 6.59%, and Alcoa declined 4.79%.
Fxstreet said a hotter-than-expected CPI print could push both the dollar and Treasury yields higher, adding more downside pressure on gold. A softer CPI reading, by contrast, could challenge the market’s current tightening pricing and help stabilize precious metals.
AI trades pulled back as yields neared 5%
With the 10-year yield close to 5%, the relative valuation appeal of stocks versus bonds fell to its lowest level since 2002, the report said. That hit long-duration, high-capex and high-expectation assets first. Semiconductor, memory and optical networking names led the retreat.
The Philadelphia Semiconductor Index dropped 2.66%, with 25 of its 30 components in the red. The DRAM storage ETF fell 4.9%. Lumentum, Astera Labs, CRDO and AAOI all moved lower with the broader optical communications group.
PANews said demand in AI remained strong despite the market pullback, even running into physical supply constraints. OpenAI paused new subscriptions to its $200-a-month Pro 20X plan because GPT-6 Astra proved too popular. Morgan Stanley had argued that GPT-6 Astra mattered because it shifted the AI bottleneck from how much infrastructure existing demand required to how much new workload better model intelligence could create.
At Goldman Sachs’ technology conference, Jensen Huang defended AI capital spending again. He said cybersecurity could become one of AI’s next major application areas because AI speeds up code generation and can also accelerate exploitation of vulnerabilities, forcing companies to deploy AI tools to handle larger security workloads. Responding to criticism about 「circular financing,」 he said, 「If you invest $1 and get back $100, how can that be circular?」
At the same time, BIS General Manager Agustín Carstens warned that the world’s five largest technology companies were expected to spend more than $1 trillion on AI between 2025 and 2026, with growing reliance on debt and private credit. With Treasury yields close to 5%, the financing cost and return profile of those commitments face a tougher test.
Apple stood out, while Oracle and Adobe pointed in different directions
Apple was one of the few bright spots among major technology stocks. After unveiling the foldable iPhone Duo, the market repriced Apple’s role as an AI-device entry point and the prospects for a premium handset replacement cycle. The stock rose 3.56%. TrendForce estimated iPhone Duo shipments at about 5 million units this year, giving it roughly 24.8% of the global foldable smartphone market, close to Huawei and behind only Samsung.
Among other mega-cap names, Google rose 0.61%, Meta fell 1.42%, Tesla lost 1.16%, and Amazon slipped 0.20%. Microsoft gained 0.16%. The report said Microsoft was pursuing a more aggressive data center expansion plan, aiming to lift global capacity from about 12 gigawatts to more than 38 gigawatts by 2032, with planned capex of $145 billion this fiscal year.
NVIDIA fell 2.26% as the broader semiconductor group cooled, yields moved higher and regulatory noise weighed on sentiment. PANews said the U.S. Department of Justice was reportedly examining technology licensing and talent arrangements between NVIDIA and Groq, raising concern that the company’s AI ecosystem expansion could face antitrust scrutiny.
Chip and semiconductor equipment stocks broadly fell. AMD lost 3.36%, Intel dropped 5.57%, Lam Research fell 5.65%, Arm declined 3.80%, ASML ADR slipped 2.43%, Broadcom lost 0.97%, and the Philadelphia Semiconductor Index fell 2.66%.
Memory shares were hit by concentrated selling. The report said high AI valuations were being discounted again as Treasury yields approached 5%, while the market also debated whether the pace of NAND price increases had become too steep. Kioxia’s CEO publicly said memory prices had already risen enough, weakening the momentum behind the price-hike trade. Micron fell 4.90%, SK Hynix ADR lost 5.20%, Western Digital dropped 4.43%, SanDisk fell 4.06%, Seagate declined 2.66%, and the Roundhill storage ETF fell 4.90%.
Optical networking names also retreated across the board. Lumentum fell 5.39%, Astera Labs lost 5.33%, CRDO dropped 4.53%, Applied Optoelectronics fell 4.30%, Marvell declined 3.43%, Coherent lost 3.40%, and Corning fell 3.17%.
SpaceX rose 0.43%. Its CFO said newly signed AI compute hosting agreements would contribute about $1.1 billion in monthly revenue starting in December, or about $13.3 billion annualized. The company expects deployed ground compute capacity to exceed 2GW by year-end and expand to 5GW-10GW next year. PANews said SpaceX planned to launch its first orbital computing satellites next year to connect rockets, satellite communications, AI compute and orbital computing into a new growth line.
Tesla fell 1.16%, mainly under pressure from valuation compression in growth stocks. The report noted that orders in China stores had recovered after Tesla introduced cash incentives for in-stock Model 3 and Model Y vehicles. For deliveries completed by Sept. 30, cash incentives were set at RMB 5,000 across all in-stock Model 3 vehicles and RMB 10,000 across all in-stock Model Y vehicles. NIO fell 3.24%, Li Auto lost 2.18%, and XPeng dropped 2.18%.
Oracle became an after-hours standout and at one point rose nearly 9%. The company reported first-quarter revenue of about $19.3 billion, up 30% year over year. Adjusted earnings per share came in at $1.92, above expectations. Cloud infrastructure revenue was about $7.4 billion, up 121%, and remaining performance obligations reached $664 billion, pointing to a very large backlog of contracted but unrecognized revenue. PANews said Oracle had eased funding pressure through customer prepayments or bring-your-own-hardware arrangements, but quarterly capex still reached $28.5 billion, far above $8.5 billion a year earlier, and the company plans to spend about $70 billion in fiscal 2027 to expand data centers.
Adobe, by comparison, cooled enthusiasm around software AI trades. Third-quarter revenue was $6.76 billion, up 13% year over year, and adjusted EPS was $6.13, both above expectations. Annual recurring revenue for AI-first products rose more than 150%, and monthly active users topped 1 billion. Even so, fourth-quarter revenue guidance of $6.8 billion to $6.85 billion came in with a midpoint slightly below expectations, and the stock fell about 2% more after hours. Adobe closed down 2.37%, while Palantir lost 2.16%, Meta fell 1.42% and Microsoft finished modestly higher by 0.16%.
What the market is watching next
The report listed several near-term events on the market calendar.
- On Sept. 11, CME’s 100-ounce silver futures move to 24-hour trading. PANews said longer hours could improve Asian and weekend liquidity, make precious-metals price discovery more continuous, and increase silver volatility and cross-market arbitrage opportunities.
- From Sept. 11 to Sept. 13, the 2026 China Computing Power Conference opens in Langfang, with a focus on computing infrastructure and AI buildout. The report highlighted servers, data centers, liquid cooling, optical modules, switches, power supplies, domestic chips and compute leasing as areas that could see event-driven interest.
- At 20:30 on Sept. 11, the U.S. will release August CPI and core CPI, the last major inflation report before the Fed’s Sept. 15-16 meeting. A hotter print, especially in core CPI, could push rate-hike odds higher and send the 10-year yield into a direct test of 5%, while putting more pressure on U.S. growth stocks and gold. A softer reading could unwind the latest repricing around another rate increase.
- On Sept. 12, Elon Musk said the release window for Grok 4.7 would open. The market is watching the capability jump, inference cost and pricing strategy of its 2.1 trillion-parameter model.
- The 18th BRICS leaders’ meeting is also on the radar, with attention on emerging-market cooperation, energy settlement, trade arrangements and de-dollarization topics. PANews said any discussion involving gold reserves, cross-border payments or commodity settlement mechanisms could affect sentiment around the dollar, gold and emerging-market assets.
- Shipping developments in the Red Sea, the Bab el-Mandeb Strait and the Strait of Hormuz remain central to whether oil can hold above $100. The report said the key question is whether Houthi forces further threaten commercial shipping and whether attacks on Gulf tankers intensify.