Morning Wrap: ASX 200 to tumble, S&P 500 on a three-day losing streak as oil crosses US$100

In a nutshell:

• Wall Street fell for a third straight session as Brent crude broke through US$100 a barrel and the US 10-year Treasury yield pushed to its highest level since Oct-23, leaving energy and rates in charge of equities

• The US escalated on two fronts, banning a broad swathe of Canadian imports from later this month while Trump conceded the Iran war and higher petrol prices will likely run past November's midterms

• Apple delivered the session's big corporate set piece, unveiling a US$1,999 foldable iPhone Duo in John Ternus's first outing as chief executive, with tonight's ECB expected hike and US producer prices the next catalyst

Let's dive in.

• Major US benchmarks finished lower and near session lows for a third straight day of declines

• S&P 500 now down 1.4% in the last three sessions, trading breakeven for the past week

• Energy was the only sector to finish higher, while the Equal-weight S&P 500 (-0.96%) underperformed the cap-weighted index by 48 bps

• Consumer-facing and yield sensitive sectors like Discretionary, Utilities, Real Estate and Staples led the declines

• US 10-year yield climbed to 4.84%, its highest since Nov-23, after the Treasury Department said it would triple its buyback of longer-dated government debt to US$6 billion

• RBC turned more cautious, with Lori Calvasina flagging rising odds of a 5% to 10% pullback on September seasonality, midterm volatility and the Iran war, while keeping a 12-month target of 8,150 (BBG)

• JPMorgan took the other side, with strategist Mislav Matejka arguing downside risk should be easing as indices hold near record highs and the momentum unwind nears completion (CNBC)

• Global credit markets reopened with force after more than US$70 billion priced on Tuesday in the busiest session since June, and Amazon launched its debut sterling bond sale to fund AI spending (BBG)

• Equity inflows stayed heavy, with Bank of America's Jill Carey Hall noting last week ranked as the sixth-largest weekly inflow since 2008, driven by institutional and hedge fund buying (CNBC)

• Apple unveiled its first foldable, the US$1,999 iPhone Duo, alongside the iPhone 18 Pro and a Gemini-powered Siri AI in John Ternus's debut as chief executive, with shares slipping on the day (CNBC)

• Meta Platforms rallied more than 5% after launching Muse, an autonomous personal AI agent for over-18s that handles scheduling and shopping through its own app and WhatsApp (TS)

• Samsung Electronics is deepening its OpenAI partnership on next-generation chip production and research, with ChatGPT Enterprise users at South Korean firms up 28-fold year on year to end-August (RT) 

• Trump said the Iran war will only end after November's midterm elections and conceded meaningful petrol price relief will not arrive before then, a scenario that raises political risk for Republicans (BBG)

• US Central Command destroyed five Iranian oil tankers, sinking one, in response to Iranian attempts to strike a US Navy warship with ballistic missiles over the preceding days (BBG)

• Brent crude topped US$100 a barrel for the first time since July and traded above US$101, as fresh US-Iran hostilities heightened concerns over energy flows through the Strait of Hormuz (BBG) 

• The EIA now forecasts Brent to average around US$90 a barrel in the second half of 2026 before easing to US$74 in 2027, with global inventories down 400 million barrels so far this year (EIA) 

• The White House will ban imports of most Canadian alcohol, some dairy products and larger-capacity motorcycles from 29 September, measures that largely replace existing tariffs of 50% on those goods (CNBC)

• Tariffs on other Canadian products will be modified and extended from 15 September, adding all-terrain vehicles and animal hides while removing rock salt and cement from the schedule (CNBC)

• Trump also moved to shut Canadian products out of long-term US government contracts, directing the General Services Administration to bar them until Ottawa allows full reciprocity for American goods (AP) 

• ECB is expected to lift rates 25 basis points to a 2.50% deposit rate on Thursday, a level most policymakers view as the upper end of neutral, with the decision fully priced (BBG)

• Bessent dared currency traders to bet against him, saying he is now the house, after Treasury bought yen so the Bank of Japan would not have to sell its US$1.1 trillion of Treasuries (CNBC) 

• China's producer price index rose 3.8% year-on-year in August, ahead of ests of 3.6% and July's 3.5%, on higher global commodity costs and surging high-tech demand (CNBC)

• China's consumer price index climbed 0.8% year-on-year in August from 0.5% in July, matching ests, with core CPI excluding food and energy up 1% from 0.9% (CNBC)

• US petrol prices jumped 7.3 cents a gallon to a US$4.22 national average, the largest one-day rise since May, while diesel hit a record US$5.94 a gallon on AAA data (CNN)

• Danske Bank cut its 2026 China growth forecast to 4.6% from 4.8% on disappointing consumer data, and trimmed its consumer inflation forecast for the year to 0.8% from 1% (CNBC)

A very quiet morning so far for corporate updates (only 11 market sensitive announcements across the entire market)

• West African Resources delivers H1 CY26 revenue of $1.46bn and NPAT of $437m on operating cash flow of $690m, with 232,905oz produced at US$1,823/oz AISC and 214,883oz sold at a realised US$4,744/oz. Declares a 20c special dividend and will accelerate debt repayments over the next 12 months, holding $876m cash plus 42,453oz of unsold bullion (WAF)

• Uh oh. Well … the path of least resistance remains firmly lower after that overnight session. Bond yields keep blowing out to fresh highs, with the US 10-year up 5 bps to 4.84%. That's despite the US Treasury tripling its next long-term debt buyback to US$6bn, which is supposed to suppress yields. But against a backdrop of ~$2tn US deficits, surging oil prices and some 60 months of >2% inflation, it's going to take a lot more than that to tame them. Brent rose 2.3% overnight to US$101.74 a barrel and, worse, US diesel futures surged 5.1% to fresh all-time highs. September Fed hike bets firmed slightly to 60.2% from 59.4% a day ago, while year-end expectations were little changed. Markets have held up well through (all things considered) and are still pricing a goldilocks outcome. But the landing zone is getting pretty small.

• Resources strength: On the flip side, copper rose 1.1% to US$6.86/lb, now up 5% across the last five sessions to fresh all-time highs. Aluminium, gold, platinum and zinc were also firmer overnight. Mining equities were a little more cautious, with the NYSE-listed VanEck Gold Miners ETF up 1.0% and Global X Copper Miners ETF up 0.9%, as declining equity risk premiums offset strength in the underlying commodity prices. US-listed BHP also up 0.3% and Rio Tinto down 0.1%. The S&P 500 energy sector (+0.8%) closed at record highs, while the blowout in diesel futures will likely drive some positive flows for local names like Ampol and Viva Energy.

Stocks trading ex-dividend: 

• Thu 10 Sep: AMA Group (AMA) – $0.005, Breville Group (BRG) – $0.19, CTI Logistics (CLX) – $0.08, Freightways Group (FRW) – $0.199, Globe International (GLB) – $0.13, Infragreen Group (IFN) – $0.005, Kogan (KGN) – $0.08, McMillan Shakespeare (MMS) – $0.7, Naos Ex-50 Opportunities Company (NAC) – $0.016, Naos Small Cap Opportunities (NSC) – $0.013, Nine Entertainment (NEC) – $0.03, NZME (NZM) – $0.025, Perpetual (PPT) – $0.63, Regis Resources (RRL) – $0.2, Sandfire Resources (SFR) – $0.35, SGH (SGH) – $0.32, Sky Network Television (SKT) – $0.141, Spark New Zealand (SPK) – $0.061, Thorney Opportunities (TOP) – $0.017, Venus Metals Corporation (VMC) – $0.17, XRF Scientific (XRF) – $0.045

• 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

Other ASX corporate actions today:       

• Dividends paid: None

• Earnings: Centaurus Metals (CTM), Myer (MYR)

• IPOs: None

• AGMs: None

Economic calendar (AEST):

• 10:15 pm: ECB Interest Rate Decision (Ests: 25 bp hike to 2.65%)

• 10:30 pm: US PPI