Stocks Climb as Brent Below $90 Gives Bonds a Lift: Markets Wrap

(Bloomberg) — Global stocks rose as chipmakers rebounded, with falling bond yields adding support after Brent crude slid below $90 a barrel.

S&P 500 futures climbed 0.5%, while those for the Nasdaq 100 advanced 0.9%. Nvidia Corp. was poised to break its longest losing streak since 2022. Gold snapped a four-day run of gains, while the dollar held steady. The yield on 10-year Treasuries declined three basis points.

Brent oil fell to its lowest level in a week. The New York Times reported the US is preparing to send diplomats back to embassies in the Middle East, suggesting Washington doesn’t anticipate a renewal of a full-scale conflict with Iran.

Technology shares remained in the spotlight, with chip stocks firming in the run-up to earnings from Nvidia, which has for years been a bellwether for the artificial-intelligence trade. More recently, it has also become involved in orchestrating funding for projects across the technology’s ecosystem.

“Nvidia needs to give investors a reason to raise forward numbers,” said Amanda Lyons at Energy Group Capital. “The fundamental debate has shifted from whether AI demand exists to whether the extraordinary infrastructure buildout can continue generating sufficient economic returns.”

Traders are also looking out for the US Treasury’s next moves, with long-dated yields still trading near multi-decade highs. A slate of economic data and a key speech by Federal Reserve Chair Kevin Warsh at the end of the week will further shape the direction of bonds and expectations for interest rates.

Warsh’s first major speech as Fed chief will be a trial of his pared-back communications style. His challenge is to address criticism that he hasn’t been forthcoming about his views on the economy without compromising his resolve not to spoon-feed traders clues about future policy moves.

Investors are awaiting key events “that could define the direction of markets heading into September,” said Laura Cooper, global investment strategist at Nuveen. “From clarity on the Fed’s reaction function and the potential need for a September hike to whether AI earnings can revive tech enthusiasm, there is plenty for investors to digest.”

Bitcoin briefly surged past $80,000 before paring its advance. The cryptocurrency is benefiting from a return of optimism to the sector after Treasury Secretary Scott Bessent’s intervention in the bond market last week fueled demand for dollar alternatives.

Stanley Druckenmiller, the billionaire investor who mentored Bessent in his early career as a hedge fund trader, suggested his former pupil was making a mistake by wading into the bond market.

“Governments defending prices against fundamentals always lose,” Druckenmiller wrote in a Wall Street Journal opinion column.

What Bloomberg Strategists Say:

“The story at the end of July was that speculative excess in tech had been flushed out, with retail investors reducing risk and a significant deleveraging taking place. The more recent rebound in positioning suggests the market is moving beyond those downside concerns, while capital remains on the sidelines ready to be deployed.”

Corporate Highlights:

Bank of Montreal topped estimates on better-than-forecast results at its US banking and capital-markets divisions, and across the company, as it pushes to improve profitability after streamlining operations and reworking the balance sheet. Bank of Nova Scotia topped estimates on better-than-expected results at its capital-markets unit as it continues to benefit from elevated market volatility, while also outperforming in its international division and across the rest of its businesses. Volkswagen AG Chief Executive Officer Oliver Blume told workers that roughly half of the carmaker’s additional job cuts will need to happen in Germany. Oura Healh Oy, a maker of smart rings that track health, fitness and sleep, and some of its backers are seeking to raise as much as $3 billion in a US IPO, according to people familiar with the matter. Some of the main moves in markets:

Stocks

S&P 500 futures rose 0.5% as of 8:25 a.m. New York time Nasdaq 100 futures rose 0.9% Futures on the Dow Jones Industrial Average rose 0.5% The Stoxx Europe 600 rose 0.4% The MSCI World Index was little changed Currencies

The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1663 The British pound was unchanged at $1.3632 The Japanese yen was little changed at 159.25 per dollar Cryptocurrencies

Bitcoin fell 0.2% to $78,806.95 Ether fell 0.3% to $2,467.6 Bonds

The yield on 10-year Treasuries declined three basis points to 4.67% Germany’s 10-year yield declined three basis points to 3.22% Britain’s 10-year yield declined four basis points to 5.01% Commodities

West Texas Intermediate crude fell 2.9% to $82.54 a barrel Spot gold fell 0.4% to $4,634.80 an ounce This story was produced with the assistance of Bloomberg Automation.

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