Stock Market Update

Equity futures point to a lower open this morning as stocks look to stabilize following back-to-back losing sessions. Higher oil prices and Treasury yields have been a persistent source of pressure over the past two days, and both are moving higher again this morning. WTI crude is trading above $97 per barrel, while the 10-year note yield has climbed to 4.87%.

Participants will receive the August Producer Price Index and weekly jobless claims at 8:30 ET, although tomorrow's release of the August Consumer Price Index is viewed as the more consequential catalyst ahead of next week's FOMC meeting. The CME FedWatch Tool currently assigns a 62.2% probability to a rate hike in September, leaving the policy outlook particularly sensitive to the upcoming inflation data.

The European Central Bank's policy decision at 8:15 ET is another focal point this morning, with a rate hike widely expected. European markets are mixed ahead of the announcement, while most Asian markets finished lower amid renewed attention on the Bank of Japan's policy path.

Today's remaining economic calendar:

• 8:30 AM ET: August PPI; Briefing.com consensus 0.4%; prior 0.0%
• 8:30 AM ET: August Core PPI; Briefing.com consensus 0.3%; prior 0.2%
• 8:30 AM ET: 09/05 Initial Claims; Briefing.com consensus 208K; prior 206K
• 8:30 AM ET: 08/29 Continuing Claims; prior 1779K
• 10:00 AM ET: August Existing Home Sales; Briefing.com consensus 4.03M; prior 4.06M
• 10:00 AM ET: July Wholesale Inventories; Briefing.com consensus 1.3%; prior 0.2%
• 10:30 AM ET: 09/05 EIA Natural Gas Inventories; prior +30 bcf
• 12:00 PM ET: 09/05 EIA Crude Oil Inventories; prior -4.45M

In corporate news:

• AeroVironment (AVAV 148.44, +7.64, +5.43%) beat fiscal first-quarter earnings and revenue expectations and issued FY27 revenue and adjusted EBITDA guidance.
• Kinetik (KNTK 56.89, +2.34, +4.29%) is weighing strategic alternatives, including a possible sale, according to Bloomberg.
• Taiwan Semiconductor Manufacturing (TSM 431.00, -4.36, -1.0%) saw August revenues rise by 53% to a record high.

Reviewing overnight developments:

Equity markets ended mostly lower as comments from a Bank of Japan policymaker kept the prospect of additional rate hikes in view. Japan's Nikkei: +0.2%, Hong Kong's Hang Seng: -1.3%, China's Shanghai Composite: -0.4%, India's Sensex: +0.2%, South Korea's Kospi: -0.3%, Australia's ASX All Ordinaries: -1.0%.

In news:

• Bank of Japan policymaker Masu said the central bank needs to move real rates out of negative territory and that accelerating inflation could require additional rate hikes.
• China's National Development and Reform Commission discussed its five-year plan with representatives from several U.S. companies.
• Australia relaxed its gas reserve rules for LNG exporters.

In economic data:

• Australia's September MI Inflation Expectations 4.9% (last 4.9%)

Major markets are mixed ahead of the European Central Bank's policy decision, with the U.K. market underperforming. STOXX Europe 600: -0.1%, Germany's DAX: +0.1%, U.K.'s FTSE 100: -0.3%, France's CAC 40: +0.1%, Italy's FTSE MIB: +0.4%, Spain's IBEX 35: +0.4%.

In news:

• The European Central Bank is widely expected to announce a rate hike at 8:15 ET and will also release updated projections.
• British Prime Minister Burnham opened the door to another Scottish independence referendum.

In economic data:

• Germany's final August CPI 0.2% m/m, as expected (last 0.8%); 2.9% yr/yr, as expected (last 2.9%)
• Italy's July Industrial Production 0.7% m/m (expected 0.3%; last -1.1%); 0.0% yr/yr (expected -0.6%; last -0.6%)
• Spain's July Industrial Production 2.3% yr/yr (last 1.1%)