Stocks Steady as US Data and Micron Pose Key Tests: Markets Wrap
(Bloomberg) — US stocks paused with the Federal Reserve’s favored inflation gauge and earnings from Micron Technology Inc. due, updates that are key respectively to interest rates and the artificial-intelligence trade.
S&P 500 futures were flat ahead of the latest release of the personal consumption expenditures price index. At a time when stubbornly high oil prices have stoked price pressures and driven bond yields to their highest in decades, the gauge is expected to show inflation quickened in August.
Treasuries steadied a day after 30-year yields hit their highest since 2002. Brent rose modestly above $103 a barrel, up about 14% for the month despite signs that crude flows from the Middle East are returning to pre-war levels. The dollar held near its highest level since July.
Markets are nearing the end of a tumultuous month in which a bruising selloff in bonds was fueled by a sharp repricing of expectations for US interest rate hikes to contain energy-driven inflation. The S&P 500 limited its losses in part thanks to a narrow rally in AI-linked stocks on optimism over the sector’s prospects, a view that will face a test when Micron reports after the close.
“The bar is so, so high that they’ll likely be very good numbers, but it all feeds through into the demand story that we need to keep seeing,” said Rory McPherson at Magnus Financial Discretionary Management. “So long as that holds, I would expect the tech trade to keep moving.”
European stocks were set for their first monthly decline since March. Inflation overshot estimates in France and Italy, increasing pressure on the European Central Bank to continue raising interest rates. The 10-year French yield premium over safer German peers widened one basis point to 120 basis points, the highest since 2012.
With a report on US private payrolls and the latest gross domestic product update due alongside the PCE release, Ipek Ozkardeskaya noted that different combinations of readings could have a range of outcomes for markets.
“A combination of robust growth and a recovery in the jobs market would allow the Fed to hike rates to fight rising inflationary pressures, provided that price pressures look concerning,” she said.
“That would keep upward pressure on short-term yields and the US dollar, while weighing on equities.”
Growth and jobs data below expectations and elevated inflation could see the gap between two- and 10-year US yields narrow, threatening risk appetite and weighing on the dollar. Strong GDP and jobs figures coupled with a softer-than-expected PCE reading would be the best possible scenario, easing pressure on yields and supporting equities, though also the furthest from her base case.
For Kevin Thozet at Carmignac in Paris, Friday’s payrolls report will be the more significant data release.
“We’re expecting a strong reading on Friday and therefore back-to-back Fed hikes,” Thozet said. “This is more and more looking like we’re in a hiking cycle and we’ve noticed policymakers shifting to the hawkish side.”
What Bloomberg Strategists Say:
“Today’s inflation data has more scope to push yields higher than pull them lower. With growth strong, inflation elevated and the Fed playing defence on its credibility, the market is looking for reasons to price more hawkishness. Last week’s surge in yields after the S&P PMI made that clear, as did the muted reaction to yesterday’s weak confidence and JOLTS data.”
Corporate News:
Boeing Co. rose in premarket trading after beating Northrop Grumman Corp. to produce the Navy’s next Top Gun fighter jet. OpenAI aims to raise at least $30 billion from investors in a new round of funding, according to people familiar with the matter. The loan portion of Paramount Skydance Corp.’s $52 billion debt package for its acquisition of Warner Bros. Discovery Inc. was increased after it generated strong investor demand. Apple Inc. is set to sell about 6 million units of the iPhone Duo this year, Counterpoint Research said, offering the first estimate for how the company’s inaugural foldable device will fare.
Some of the main moves in markets:
Stocks
The Stoxx Europe 600 was little changed as of 10:48 a.m. London time S&P 500 futures rose 0.1% Nasdaq 100 futures were little changed Futures on the Dow Jones Industrial Average rose 0.2% The MSCI Asia Pacific Index rose 0.8% The MSCI Emerging Markets Index rose 0.1% Currencies
The Bloomberg Dollar Spot Index was little changed The euro rose 0.1% to $1.1357 The Japanese yen rose 0.1% to 157.06 per dollar The offshore yuan was little changed at 6.7068 per dollar The British pound rose 0.3% to $1.3275 Cryptocurrencies
Bitcoin was little changed at $83,560.79 Ether was little changed at $2,688.58 Bonds
The yield on 10-year Treasuries declined one basis point to 5.23% Germany’s 10-year yield declined four basis points to 3.59% Britain’s 10-year yield declined three basis points to 5.38% Commodities
Brent crude rose 0.6% to $103.20 a barrel Spot gold rose 0.1% to $4,187.02 an ounce This story was produced with the assistance of Bloomberg Automation.
–With assistance from Julien Ponthus and Jan-Patrick Barnert.
©2026 Bloomberg L.P.
