Dow sheds 400 points as Brent crude crosses $100

Today’s headlines

What’s happening: US stocks closed lower on Wednesday amid sharp gains in crude oil prices.

What happened: US Treasury yields moved higher during the session, weighing on consumer demand and corporate margins.

Gains in shares of chipmakers limited the overall decline as investors await key inflation data today.

Why it matters: Brent crude prices surged past the key $100 per barrel resistance level amid concerns over supply disruptions due to rising tensions between the US and Iran.

The ongoing US-Iran war has entered the seventh month, raising concerns over broader regional tensions.

Concerns around inflation due to surging oil prices raised speculations of the Federal Reserve hiking its benchmark interest rate this month.

The yield on 10-year ⁠US Treasury note surged to its highest level since November 2023 after the Treasury Department announced plans to increase its bond buybacks to up to $6 billion, lower than market expectations of $8-$10 billion. Higher yields on government bonds lowers the demand for equities.

All major sectors recorded losses on Wednesday, with industrials and consumer discretionary among the top losers. The energy sector bucked the market trend, gaining more than 1%.

Shares of Apple settled lower on Wednesday after the company launched its first smartphone under new CEO John Ternus. Alphabet’s stock fell over 2% after Google announced plans to invest €13 billion to expand its AI infrastructure in Finland.

Meta Platform’s shares surged more than 6% after the company launched its Muse personal AI agent. Gains in chipmakers stocks supported the Nasdaq 100, with Micron gaining around 2.8% and AMD rising 3% on Wednesday.

The Dow Jones index lost 405.41 points, or 0.77%, to close at 52,380.66, while the S&P 500 fell 0.48% to 7,636.36 points and the Nasdaq 100 declined 0.29% to settle at 29,421.55.

What to watch: Investors will keep an eye on developments in the US-Iran conflict.

Data on US Producer Price Index (1630 UAE Time) due to be released on Thursday and Consumer Price Index scheduled for Friday will remain in focus. US producer prices, which came in unchanged in July following a 0.1% decline in the previous month, are expected to surge by 0.4% in August. Analysts expect the US CPI to rise by 0.4% in August following a 0.1% gain in July.

Investors also await data on initial jobless claims (1630 UAE Time), existing home sales (1800 UAE Time) and wholesale inventories (1800 UAE Time) from the US today.

The markets today

The British pound in focus today ahead of some major economic releases

Context: The British pound gained versus the US dollar this morning as investors monitored the Bank of England’s monetary policy outlook.

Details: The British currency traded higher as renewed inflationary concerns sparked more speculations of the BoE raising its benchmark interest rates by 25 basis points (bps) by December. Markets are also pricing in two further rate hikes in 2027.

Rising tensions between the US and Iran stroked crude supply concerns, sending Brent crude prices past the $100 per barrel level. Natural gas prices in the UK jumped to their strongest since late 2022.

Data released this morning showed that UK’s house price balance rose to -28% in August from a reading of -29% in the previous month, hitting a five-month high amid signs of stabilisation in the housing market.

Weakness in the US dollar lent support to the GBP/USD forex pair. The US dollar index, which measures the greenback’s performance versus a basket of major peers, fell around 0.1% to 98.77 this morning.

The GBP/USD forex pair rose around 0.1% to 1.3556 this morning.

What to watch: Data on GDP (1000 UAE Time), industrial production (1000 UAE Time) and balance of trade (1000 UAE Time) from the UK will be released on Friday. UK’s economy, which grew by 1.1% year-over-year in June, is expected to expand by 1.2% in July. Analysts expect industrial production to grow 0.2% year-over-year in July following a 0.2% decline in the previous month.

UK’s trade deficit, which widened to £5.54 billion in June from £3.46 billion in the previous month, is expected to narrow to £4 billion in July.

Other Markets: Asian indices traded lower this morning, with the Nikkei 225, Hang Seng Index and CSI 300 Index down by 0.85%, 1.19% and 0.19%, respectively.

The news shaping the markets

US President Donald Trump said Russian President Vladimir Putin was keen to reach an agreement with Ukraine to end the war. The news sent the USD/RUB pair lower in forex trading this morning.

Australia’s consumer inflation expectations remained elevated at 4.9% in September, unchanged from August’s pace. Continued inflationary concerns exerted pressure on the AUD/USD forex pair.

US crude oil inventories declined by 300,000 barrels in the week ended September 4, compared to a drawdown of 2.6 million barrels in the previous week, which sent the WTI crude oil prices lower this morning.

France’s industrial production declined 0.4% in July, following a 0.1% contraction in the previous month. The latest reading coming in short of market estimates of 0.3% growth exerted pressure on the EUR/USD forex pair.

Taiwan’s trade surplus widened to $22.3 billion in August from $16.8 billion in the year-ago period. Despite this being the largest surplus since October 2025, the USD/TWD pair rose in forex trading this morning.

What else to watch today

• European Central Bank’s Interest Rate Decision (1615 UAE Time)
• US Continuing Jobless Claims (1630 UAE Time)
• US EIA Natural Gas Stocks Change (1830 UAE Time)
• US EIA Crude Oil Stocks Change (2000 UAE Time)
• US EIA Gasoline Stocks Change (2000 UAE Time)
• US EIA Cushing Crude Oil Stocks Change (2000 UAE Time)
• US EIA Distillate Stocks Change (2000 UAE Time)
• US EIA Heating Oil Stocks Change (2000 UAE Time)