Futures Tumble As Global Yields Hit Multi-Year HIgh, Oil Jumps On Iran Escalation

Futures Tumble As Global Yields Hit Multi-Year HIgh, Oil Jumps On Iran Escalation Stock futures are set to start the new month on the backfoot - having weathered a variety of challenges to post a gain for August - with tech lagging as a global selloff pushes yields to the highest level since 2008. As of 8:00am ET, S&P futures are down 0.6%, while Nasdaq futures slide 1.2% following a reports of a strike by Micron’s labor unions in Taiwan, sending the stock 2% lower in pre-market. Semis / Memory are down 1.4% and 2.2%, respectively, with neither Mag7 nor Software seeing a pre-mkt bid. Defensives and Energy are poised to outperform today as small-caps lead large-caps, despite the meltup in rates and oil. Treasury Yields are 2-4 bps higher as part of a general steepening of the curve which has sent US 10Y yield to 4.79% and 10Y JGBs above 3.00% for the first time since 1996. The Dollar is stronger, too. Reports of two supertankers being hit by projectiles are driving oil prices sharply higher and pushing WTI above $87, the highest since July 27. Metals are weaker with Precious metals lagging Base; gold is off ~6% from its Aug high and is 9% above its $4k major support. Ags remain bid after returning ~13% in Aug: the BCOMAG Index is making multi-year highs, last seen in 2022/23. Today’s macro data focus is on ISM-Mfg and JOLTS, with ISM the more important to make sure the growth story remains intact and supportive of the broadening trade. Keep an eye on the ISM Prices Paid as inflation is more critical to markets than growth, going into the Sep 16 Fed Mtg. In premarket trading, Mag 7 names are all lower (Apple -0.1%, Alphabet -0.7%, Amazon -1.3%, Meta -1%, Microsoft -1.1%, Nvidia -1.3%, Tesla -1.2% Capricor Therapeutics (CAPR) rises 4% after Piper Sandler upgraded the biotech company to overweight, optimistic about the prospects for deramiocel, a treatment for Duchenne muscular dystrophy Charter Communications (CHTR) inches 1% lower after the cable operator said CFO Jessica Fischer will step down in mid October to relocate for another professional opportunity. Duolingo (DUOL) is up 6% after Evercore ISI upgraded the language-learning software company to outperform, noting investor opportunity following severe weakness in the stock, which is down more than 70% off a peak hit in mid-2025. Fervo Energy (FRVO) jumps 13% on a Wall Street Journal report that the geothermal company has signed a deal to sell power to Alphabet’s Google. GoPro (GPRO) soars 76%, with the stock set to extend gains after rallying more than 46% Monday. Kroger (KR) slips 1% after Citi analyst Paul Lejuez cut his price target on the grocer to a Street-low $57 from $61, and adds a downside 30-day catalyst watch on the stock ahead of Kroger’s Sept. 11 earnings report. Medtronic (MDT) gains 4% after the medical device maker boosted its organic revenue forecast for the full year. Micron Technology (MU) dips about 2% after the Taipei-based Liberty Times reported that Micron will deliver its highest incentive pay plan to its Taiwan-based employees in response to a potential strike by its labor union. NIO ADRs (NIO) slip 1% after the carmaker reported vehicle deliveries for August that were largely flat from the previous month. Robinhood Markets (HOOD) rises 2% after Morgan Stanley raised its recommendation on the exchange to overweight on growth from prediction markets. In other corporate news, Western Union and its Australian division are being investigated by the country’s financial crimes agency over concerns about whether its anti-money laundering and terrorism financing controls are effective. Airbnb is testing taking a smaller cut of rental fees from hosts, seeking to fight back against a trend of customers booking directly outside of its platform. Apple claimed in a court filing that OpenAI is actively destroying crucial evidence in an escalation of its legal battle against the AI company. A global bond selloff has sent global yields to the highest level in years and was most pronounced in Asia, where 10-year Japanese yields hit the highest level this century. 3.001% https://t.co/GLLXT1fSYm pic.twitter.com/Vhbc0GlMBp — zerohedge (@zerohedge) September 1, 2026 The move came as US Treasury Secretary Scott Bessent pressed the Bank of Japan to tighten policy amid fresh weakness in the yen. US Treasuries also fell across the curve, with the 10-year rate touching its highest since January 2025. Thirty-year yields extended their stint above 5%, already the longest since 2006. UK gilts sharply underperformed in Europe. The bond selloff was further pressured by the ascent in energy prices: continued disruptions to energy flows through the Strait of Hormuz sent Brent crude above $92. In the latest escalation in the Middle East, two oil supertankers were struck by unknown projectiles in quick succession while transiting the waterway, according to maritime security consultants Marisks. Investors are demanding ever greater compensation to hold bonds as concerns about government spending, persistent inflation and surging corporate borrowing to finance the AI buildout intensify. Against this backdrop, traders now price the odds of a September Fed hike at around 70%. Equity investors “should be much more worried about rising long-term bond yields, particularly in the US,” said Joachim Klement, a strategist at Panmure Liberum. “Continued inflation pressures and the more hawkish stance of Kevin Warsh in Jackson Hole last week all point to continued increases.” The risk-off start to September doesn’t bode well for what is historically the year’s toughest month for the S&P 500. The index has lost 0.88% on average in September over the past three decades. Positioning, performance dispersion and seasonality make for a tricky setup in the weeks to come. Recent risk events including Nvidia earnings and the Fed’s Jackson Hole symposium kept market sentiment mixed and eroded breadth without derailing the uptrend. Citadel Securities’ Scott Rubner notes near-term asymmetry for US equities has changed into September. He describes a summer characterized by exceptional earnings, a clean up of leverage and positioning, a collapse in volatility, the return of retail investors and systematic investors rebuilding exposure. Rubner views the month ahead as an opportunity to reduce exposure and add cheap protection, but not the beginning of a broader bearish tilt. Short-term S&P 500 option volatility has fallen to near the lows of the past year. Meanwhile longer term contracts are signaling a bit more concern, with the spread on 1-year and 1-month volatility widening to the 96% percentile over the past year. Ahead of Friday’s US payrolls report, job openings data for July due later Tuesday are expected to reaffirm the picture of a stable labor market, with limited layoffs. Next week’s inflation data will be more significant for the Fed’s next steps after Warsh made clear that the central bank’s focus for now is on the price-stability side of its mandate, according to Laura Cooper at Nuveen. The rise in real yields has “a little bit more room to run,” Cooper told Bloomberg TV. “The key catalyst going forward will be that August inflation print. Payrolls are less of a concern.” Elsewhere, companies are rushing to file for IPOs before Anthropic’s megadeal, which is expected to absorb market attention in coming weeks. Sticking with Anthropic, it’s said to have agreed to a $35 billion computing deal with Lambda, a cloud provider backed by Nvidia, part of an effort to quickly expand its AI capacity. Inflationary pressures continue to surface - “foodflation” as measured by the Bloomberg Agriculture Spot Index just posted the biggest monthly gain since July 2012. Goldman Sachs’s Robert Kaplan says he would be raising interest rates in September assuming there aren’t any surprises, though he would strive to keep an open mind. Trump called for a federal tax credit to benefit the movie and television industry, saying it would help bring the production of Hollywood blockbusters back to the US. Tuesday’s weakness extended to Europe, where declines in auto stocks and mining shares put the Stoxx 600 on course for its lowest close since July. Euro-area inflation quickened to the highest level in almost three years, cementing the case for a rate hike next week. Here are the biggest movers Tuesday: Novartis gains as much as 5.6%, the most since April 2025, after the Swiss drugmaker showed positive trial data for its experimental multiple sclerosis pill, which analysts say holds blockbuster potential if other trials play out well Drax Group shares rally as much as 5.6% after securing their second upgrade in a week as Goldman Sachs raises its recommendation to buy from neutral, citing “an attractive cash generation story with options for upside” Reckitt Benckiser rises as much as 5.9% after a US jury sided with the company’s Mead Johnson unit in a bellwether trial among a group of cases alleging that formula for premature babies is linked to a deadly bowel disease Air Liquide shares gain as much as 4.2% after activist investor Elliott Investment Management built a stake in the industrial gas supplier as it pushes the firm to improve margins, according to people familiar with the matter Technip Energies shares rise as much as 9.2%, the most since March, after a report said the French engineering group is taking part in a tender organized by SpaceX to build a rocket fuel production plant in Louisiana DFDS rises as much as 6.6%, the most since mid-August, as RBC sets a new Street-high price target on the shipping and logistics firm and says there’s “further recovery potential ahead” Dormakaba shares rise as much as 6.4%, briefly hitting their highest level since April, after the maker of security systems reported results and outlined plans to simplify the group’s ownership structure Bodycote shares rise as much as 4.8% and trade at their highest level in five years after Veritas agreed to buy the company with a bid that surpassed a rival offer from CVC. Shares are trading above the latest offer price Partners Group shares fall as much as 8.6% after the private markets company lowered its FY26 guidance for performance income and appointed Roberto Cagnati and Juri Jenkner as co-CEOs, effective Jan. 1, 2027 Ashtead Technology drops as much as 4.9%, to the lowest since mid January, after the oil field services provider releases first-half resultsn which Panmure Liberum says confirm issues raised in recent profit warning Standard Life drops as much as 3.7% after being downgraded to neutral at UBS following what the broker says has been a “justified” period of outperformance versus UK life peers and the wider European insurance sector Asian stocks rose, poised for their longest daily winning streak since January, as MediaTek climbed on a new investment deal with Nvidia. The MSCI Asia Pacific Index advanced as much as 0.6% before paring more than half of its gains. It’s still on track to rise for a sixth straight day. MediaTek shares jumped by about 10% after Nvidia announced a $3.5 billion investment in the Taiwanese chip designer. TSMC, SK Hynix and Toyota also helped boost the regional gauge. Taiwan’s Taiex climbed 1.8%. Japan’s Topix also rose, along with key indexes in the Philippines and Indonesia. Stocks slumped across rest of the region with global bond yields climbing back to the highest level in almost two decades on inflation concerns and bets on Federal Reserve rate hikes. Renewed fighting in the Middle East has driven oil prices higher again and weighed on sentiment. Traders have boosted the odds of a September Fed rate hike to 66% from just 34% after Fed Chair Kevin Warsh spoke about reining in inflation on Friday, according to data compiled by Bloomberg based on swaps. Japan’s Finance Minister Satsuki Katayama played down reports of Bessent’s pressure on the BOJ. In FX, the Bloomberg Dollar Spot Index is up 0.1% with the greenback firmer versus almost all…