Stock Market Update

Equity futures point to a higher open this morning, enthused by a pullback in oil prices as investors await the release of the August Consumer Price Index.

Stocks have finished lower in the first three sessions of the week as oil prices have surged, with WTI crude moving above $102 per barrel yesterday. Oil is currently down $3.24 (-3.2%) to $99.24 per barrel following a Financial Times report that neighboring Gulf states will meet with Iran on Monday in an attempt to ease hostilities around the Strait of Hormuz.

While the market will continue to monitor geopolitical developments, investors will be closely attuned to the 8:30 a.m. ET release of the August Consumer Price Index (Briefing.com 0.4%), which many view as the deciding factor for the Fed's next move at the September 16 FOMC meeting. Following a relatively in-line Producer Price Index yesterday, the CME FedWatch tool currently assigns a 69.4% probability to a 25-basis point rate hike.

Today's remaining economic calendar:

• 8:30 AM ET: August CPI; Briefing.com consensus 0.4%; prior 0.1%
• 8:30 AM ET: August Core CPI; Briefing.com consensus 0.2%; prior 0.2%
• 10:00 AM ET: September Univ. of Michigan Consumer Sentiment - Prelim; Briefing.com consensus 51.5; prior 51.7
• 2:00 PM ET: August Treasury Budget; Briefing.com consensus -$485.0B; prior -$432.3B

In corporate news:

• Adobe (ADBE) is down sharply in pre-market trading after a modest Q3 beat and in-line Q4 guidance failed to resolve concerns about converting rapid AI engagement into paid recurring revenue.
• Oracle (ORCL 162.01, +8.84, +5.77%) beat quarterly earnings and revenue estimates as total cloud revenue increased 62%, and its fiscal 2027 earnings outlook was above consensus.
• Copart (CPRT 32.55, +1.80, +5.85%) missed the earnings estimate while reporting in-line revenue and agreed to acquire ACV Auctions (ACVA 10.43, +3.21, +44.46%) for cash.
• Microsoft (MSFT 495.48, +2.92, +0.6%) is planning to triple data center capacity by 2032, according to Bloomberg.

Reviewing overnight developments:

Equity markets ended the week on a lower note amid speculation that the Bank of Japan could accelerate its rate-hike pace. Japan's Nikkei: -1.9%, Hong Kong's Hang Seng: -0.6%, China's Shanghai Composite: -1.2%, India's Sensex: -0.2%, South Korea's Kospi: -1.8%, Australia's ASX All Ordinaries: -1.0%.

In news:

• China released a five-year plan for developing intelligent connected new energy vehicles.
• Foreign automakers are reportedly cutting prices on gas-powered vehicles in China.
• South Korea's exports during the first ten days of September increased 82.6%, with chip exports up 270.1%.

In economic data:

• Japan's August PPI -0.2% m/m (expected 0.0%; last 0.4%); 7.6% yr/yr (expected 7.4%; last 7.7%). Q3 BSI Large Manufacturing Conditions 7.6 (expected 2.5; last -1.8)
• New Zealand's August Business PMI 53.1 (last 54.3)

A pullback in oil has provided support, while comments about persistent inflation from European Central Bank policymakers have prompted speculation about another rate hike in October. STOXX Europe 600: +0.6%, Germany's DAX: +0.5%, U.K.'s FTSE 100: +0.6%, France's CAC 40: +0.6%, Italy's FTSE MIB: +0.7%, Spain's IBEX 35: +0.6%.

In news:

• France's finance ministry lowered its 2026 growth forecast to 0.5% from 0.7%.
• Labour-led towns in England are reportedly planning a 5% tourist tax.

In economic data:

• U.K.'s July GDP 0.4% m/m (expected 0.0%: last 0.3%); 1.6% yr/yr (expected 1.2%; last 1.1%). July trade deficit GBP20.97 bln (expected deficit of GBP22.60 bln; last deficit of GBP23.01 bln). July Industrial Production 0.2% m/m (expected -0.2%; last -0.2%); 0.6% yr/yr (expected 0.2%; last -0.2%). July Manufacturing Production 0.9% m/m (expected 0.2%; last -0.5%); 2.6% yr/yr (expected 2.0%; last 0.5%). July Construction Output 0.1% m/m, as expected (last 0.1%); -2.5% yr/yr (expected -2.3%; last -2.3%)
• Italy's Q2 Unemployment Rate 5.6% (expected 5.4%; last 5.3%) Swiss August SECO Consumer Climate -33, as expected (last -33)