Morning Wrap: ASX 200 to fall, S&P 500 and Nasdaq slide a fourth day as oil and yields surge

In a nutshell:

• Major US benchmarks slid again for a fourth consecutive session, as bond yields traded even more vertical, with US Treasury yields up 7-15 bps across the curve to fresh multi-year highs

• US Treasury underwhelmed after purchasing just US$5.19bn of 10-to-20-year debt, less than the US$6bn maximum announced earlier this week

• Brent posted its highest close since mid-May, with highs of US$109 a barrel, after Houthi fighters seized a Red Sea port near Bab al-Mandeb and Trump ruled out an Iran deal

• Money markets swung hard towards a Fed hike at next week's meeting after a hot August producer price report, while the ECB delivered its second increase since the Iran war began

Let's dive in.

• Major US benchmarks finished lower in a continued four session skid with the S&P 500 now down 2% over the last four sessions tot he lowest since 3 August

• Bond yields extended their climb to fresh multi-year highs, after the Treasury bought just $5.19bn of a possible $6bn of debt maturing in 10 to 20 years 

• VIX rose 8.69% to 17.89, but still well below 20, suggesting positioning stress rather than anything approaching panic in the options market

• Russell 2000 fell 1.11%, the worst performer among major indices for a third consecutive day as the rate-hike repricing hit small caps and growth names hardest 

• Treasury completed its buyback of US$5.19 billion of a planned US$6 billion in long-dated securities, an operation aimed at managing the curve as the energy shock feeds inflation (CNBC)

• BNP Paribas called the top in the corporate bond bull market, arguing technology and data centre borrowers will eventually saturate credit markets even if supply is absorbable for now (BBG)

• Truist Wealth chief market strategist said higher rates are already biting, pointing to the S&P Equal Weight down 4% from its 52-week closing high and the Russell 2000 off almost 5.5% (CNBC)

• Tiger Brokers strategist James Ooi said yields climbing despite the buyback shows markets read long-end pressure as a fundamental issue tied to inflation and heavy Treasury supply rather than liquidity (CNBC)

• UBS chief executive Sergio Ermotti said investors have grown complacent over the past few years even as geopolitical and economic risks have mounted (CNBC)

• Oracle Q1 FY27: revenue up 30% to $19.35bn against $19.14bn ests, cloud revenue up 62% to $11.61bn with infrastructure up 121%, adjusted EPS $1.92 beat ests by about 10%, remaining performance obligations up $209bn year-on-year to $664bn, shares up ~4% after hours (CNBC)

• Apple rose 3.5% a day after unveiling its foldable iPhone Duo, recovering from a muted response on Wednesday when the stock closed slightly lower (CNBC)

• Nvidia fell about 2.3% as the AI complex was hit by the jump in long-dated yields, with Micron down more than 4%, Vertiv and CoreWeave each off close to 5% and Lumentum down about 4% (CNBC)

• Meta Platforms drew a JPMorgan upgrade, the broker citing meaningful upside potential as the company rolls out its artificial intelligence models and products (CNBC)

• Novartis rose nearly 2% after a major shareholder called for a board overhaul to improve corporate governance, following three drug trial setbacks earlier in the week (CNBC)

• Macy's Q2: net sales up 1.1% to $4.87bn beating $4.81bn ests, adjusted EPS 63c against 37c ests, full-year EPS guidance lifted to $2.15 to $2.35 including $116m of tariff refunds, shares fell more than 3% on soft third-quarter guidance (TS)

• Trump said he does not expect oil prices to fall until right after the November midterms and that the war with Iran will end immediately after the election, remarks that helped drive Thursday's crude rally (AP)

• The US military said it destroyed 10 Iranian tankers in the past week, with Trump saying the attacks are caused by the US and that a lot more are coming (CNBC)

• Houthi fighters seized the Red Sea port city of Mocha and pushed toward the Bab al-Mandeb Strait, escalating the fight with Saudi-backed Yemeni forces at the southern end of the Red Sea (BBG)

• Yemeni government forces pulled back south to Dhubab, directly opposite Perim Island on the strait, with the Houthis also attacking the Hanish islands, four military sources said (RT)

• Presidential Leadership Council head Rashad al-Alimi said Bab al-Mandeb cannot become another Strait of Hormuz, calling for international intervention over the port and the waterway (AJ)

• Iran has no intention of backing down in the face of the US naval blockade and will escalate strikes if Washington keeps attacking its territory, according to a senior Iranian official (BBG)

• Trump said the war will end immediately after the November midterms and that negotiations with Tehran remain possible, even as Washington is not actively seeking a deal (AP)

• Trump warned the US may strike Iran's Pickaxe Mountain, the site near the heavily damaged Natanz enrichment facility, and said the war would likely run past the midterms (RT)

• Saudi Arabia told OPEC its crude output fell 1.9m barrels a day in August to 6.238m, the lowest since 1990, with observed exports down about a third to roughly 3m barrels a day (BBG) 

• China said negotiators are working to implement reciprocal tariff cuts on $30bn of goods from each side at an early date, ahead of a Trump and Xi meeting in Washington on 24 September (Fortune)

• Trump promised a $5,000 "Trump dividend" to every adult citizen if Republicans hold both chambers of Congress in November, a proposal that could cost $1tn or more and drew immediate bipartisan pushback (CNBC)

• Vice President JD Vance said the payments would be funded by tariff revenue and would exclude wealthy Americans, with receipts running at about $154.5bn in the first 10 months of fiscal 2026 through July (TIME)

• European Central Bank lifted its deposit rate 25 basis points to 2.50%, the second increase since the Iran war broke out, with the main refinancing rate at 2.65% and the marginal lending facility at 2.90% (BBG)

• Christine Lagarde called the hike a "no brainer", saying the Governing Council did not discuss future rate changes and would remain data dependent and meeting by meeting (BBG)

• Lagarde said significant financing needs from AI are a key driver of the outlook and that the ECB is monitoring the bond market attentively, particularly the long end (FXStreet)

• ECB staff projections put euro-area headline inflation at 3.0% in 2026, easing to 2.5% in 2027 and 2.1% in 2028, with energy prices flagged as the significant wild card (CB)

• Traders lifted odds of a Fed hike at next week's meeting to 70% after the producer price report and oil's move above $100, with a second increase before year-end now viewed as a possibility (CNBC)

• Markets price about a 75% chance the RBA raises the cash rate from 4.35% at its 29 September meeting, after Deputy Governor Andrew Hauser said the board will debate further tightening (ABC)

• US producer prices rose 0.4% in August, matching ests, with the annual rate accelerating to 5.4% from 4.8% in July and running 0.1 percentage point above ests (CNBC)

• Final demand goods prices jumped 1.1% in August with diesel up 24.1%, and more than three-quarters of the broad-based rise traced to a 4.2% increase in final demand energy (BLS)

• Initial jobless claims fell 1,000 to 206,000 in the week to 5 September against 205,000 ests, holding within the 189,000 to 212,000 range that has prevailed since mid-July (RT)

• China imported 8.93m barrels a day of crude in August, up 6.2% from July, as it restocked inventories run down since the start of the Iran war (TE)

• Alkane Resources lifts Tomingley Ore Reserves 3.2% to 641koz of gold at 30 June, net of 95koz depletion on record site production of 80koz, with Björkdal Reserves up 3.7% to 563koz net of 48koz depletion. Björkdal Resources now 1.5Moz M&I plus 0.61Moz Inferred on the Storheden addition and near-mine drilling. San Antonio and Peak Hill not updated (ALK)

• GQG Partners reports August FUM of US$149.2bn, down 4.6% on July's US$156.4bn after US$4.3bn of net outflows and US$2.9bn of negative investment performance. FUM has fallen 9.0% year to date from US$163.9bn, with US$23.9bn of net outflows partly offset by US$9.2bn of positive performance (GQG)

• Jupiter Mines loses MD Brad Rogers after four years, departing to take the CEO role at an unrelated non-ASX listed company. Rogers stays as MD until end-November 2026 and remains available in a consultancy capacity to February 2027, with Johannesburg-based mining engineer Matthew Jarvis appointed interim CEO effective immediately (JMS)

• Vulcan Energy granted its second lithium production licence for the Lionheart Project in Germany's Upper Rhine Valley Brine Field, covering the already-producing Landau geothermal permit area. Valid to September 2032 and to be combined with the LiThermEx licence into a 30-year permit, with construction on track for first production in 2028 (VUL)

• Resource carnage: A sea of red across the commodity complex, with the NYSE-listed Global X Copper Miners ETF down 7%, VanEck Rare Earth and Strategic Metals down 5.1% and most other resource ETFs finishing 2-4% lower. Copper tumbled after the White House said no decision has been made on tariffs for refined copper, citing affordability concerns for US manufacturers (via Reuters). Tariff expectations underwrote most of the recent momentum, so the unwind tanked both the metal and the miners. NYSE-listed BHP tanked 5.3%, Alcoa tumbled 4.7%, Newmont fell 2.0% and TSX-listed Capstone Copper dropped 9.3%. It's going to be ugly.

• Even energy faded: Brent surged around 7% to US$109.30 a barrel, yet the S&P 500 energy index finished the session down 0.4%. Three things to note. The macro backdrop of higher yields, tightening financial conditions and thinner liquidity is offsetting an otherwise favourable oil price. Energy equities are reluctant to underwrite a rally built on geopolitics rather than fundamentals. And prices at these levels, with jet fuel and diesel even more extreme, eventually destroy the demand holding them up.

• Flight to safety: Communication services and consumer staples were the only two S&P 500 sectors to finish higher, the classic pivot/resilience for defensives.

Stocks trading ex-dividend: 

• Fri 11 Sep: Ariadne Australia (ARA) – $0.005, CAR Group (CAR) – $0.435, Cleanaway Waste Management (CWY) – $0.035, Joyce Corporation (JYC) – $0.17, PM Capital Global Opportunities Fund (PGF) – $0.075, WiseTech Global (WTC) – $0.123

• Mon 14 Sep: Chorus (CNU) – $0.256, Credit Corp Group (CCP) – $0.455, Glennon Small Companies (GC1) – $0.02, Kelsian Group (KLS) – $0.1, Saunders International (SND) – $0.01, Virgin Australia Holdings (VGN) – $0.076, WCM Global Growth (WQG) – $0.024

• Tue 15 Sep: Data#3 (DTL) – $0.182, Duratec (DUR) – $0.025, Guzman y Gomez (GYG) – $0.406, Lovisa Holdings (LOV) – $0.33, Neuren Pharmaceuticals (NEU) – $0.15, Plato Income Maximiser (PL8) – $0.006, Qantas Airways (QAN) – $0.198, Ramelius Resources (RMS) – $0.03, Spheria Emerging Companies (SEC) – $0.011, Westgold Resources (WGX) – $0.1

• Wed 16 Sep: Auckland International Airport (AIA) – $0.056, Aurelia Metals (AMI) – $0.01, BKI Investment Company (BKI) – $0.02, Capricorn Metals (CMM) – $0.05, IMDEX (IMD) – $0.018, Inghams Group (ING) – $0.061, PWR Holdings (PWH) – $0.05, Servcorp (SRV) – $0.16, Service Stream (SSM) – $0.035

• Thu 17 Sep: a2 Milk Company (A2M) – $0.067, EDU Holdings (EDU) – $0.03, Embelton (EMB) – $0.2, Flight Centre Travel Group (FLT) – $0.3, Lycopodium (LYL) – $0.37, SKS Technologies Group (SKS) – $0.065, Solaris Australian Equity Income Plus (SET) – $0.005, South32 (S32) – $0.075, Supply Network (SNL) – $0.44, Tourism Holdings Rentals (THL) – $0.063, WAM Income Maximiser (WMX) – $0.007

Other ASX corporate actions today:       

• Dividends paid: Acumentis Group (ACU) – $0.0045, Heartland Group Holdings (HGH) – $0.028, JB Hi-Fi (JBH) – $1.27, REA Group (REA) – $1.73, SRG Global (SRG) – $0.04

• Earnings: Argosy Minerals (AGY), Beetaloo Energy Australia (BTL), Benz Mining (BNZ), Blue Star Helium (BNL), Evion Group (EVG), Genmin (GEN), Kingston Resources (KSN), Titan Minerals (TTM)

• IPOs: None

• AGMs: None

Economic calendar (AEST):

• 4:00 pm: UK GDP

• 10:30 pm: US CPI