Is the last mile getting steeper?

S&P 500 -0.58% to 7,673.52

US 10-year yield +1.4 basis points to 4.798%

Spot gold -1.15% to $4,354.19 an ounce

DXY -0.06% to 98.86

Key data to move markets today

EU: A speech by ECB President Christine Lagarde

USA: ADP Employment Change 4-week Average

Global Macro Updates

CPI Preview. Friday’s August CPI report will provide the potentially decisive inflation signal before next week’s FOMC meeting. Consensus expects headline prices to rise 0.4% m/o/m, versus 0.1% in July, and core CPI to increase 0.2%. That would leave headline inflation unchanged at 3.4% y/o/y, but lower the core rate from 2.5% to 2.4%.

The release follows an employment rebound that returned the policy debate to inflation. Nonfarm payrolls rose 162,000 in August, nearly three times consensus, while unemployment held at 4.1% as the labour force expanded by 683,000. Annual wage growth eased to 3.1%, suggesting contained labour-cost pressure.

Activity indicators present a resilient, but price-sensitive picture. The ISM services index climbed to a six-month high of 55.4 as new orders and business activity strengthened, while prices paid reached 72.6, their highest since July 2022. Manufacturing lost momentum as new orders, production and employment weakened, yet its prices-paid gauge remained elevated at 71.1. The combination underscores supply-side inflation risk.

Household expectations are not de-anchoring. The New York Fed’s August survey showed one- and five-year inflation expectations steady at 3.6% and 3.0%, while the three-year measure eased to 3.2%. However, job-finding prospects deteriorated and expected unemployment reached its highest level since April 2020. Expected spending growth rose to 5.2%, despite worsening assessments of household finances.

Energy represents the clearest upside risk. US diesel reached a record $5.90 per gallon on Monday as refining constraints, Russia’s export ban and approaching winter demand tightened supply. Goldman Sachs sees oil potentially reaching $120 a barrel if Middle East shipping disruptions intensify and favours exposure to diesel and natural gas. A 29% monthly increase in Chinese refined-product exports may offer partial relief.

A consensus-like core reading would preserve evidence of gradual disinflation, although the headline acceleration and elevated input costs would counsel patience. An upside core surprise would make a September rate increase more plausible; a softer print would strengthen the case for holding, without removing the inflation threat from energy and supply chains.

US Stock Indices

Dow Jones Industrial Average -1.18%
Nasdaq 100 -0.123%
S&P 500 -0.58%, with 8 of the 11 sectors of the S&P 500 down

US equity indices were down on Tuesday as oil prices climbed to a six-week high. The Nasdaq Composite was -0.32%, or down 85.58 points, to 26,421.41. The S&P 500 fell -0.58%, or down 45.08 points, to 7,673.52. The Dow Jones Industrial Average was -1.18%, or down 628.18 points, to 52,786.07.

In corporate news, Qualcomm signed a long-term partnership deal with Amazon. Amazon would be able to buy up to $60 billion of its AI data-centre chips and related products. Qualcomm granted warrants worth about $4 billion that vest with product purchases and allow Amazon to buy shares at $161.26 a share, according to a regulatory filing.

On Tuesday, GE Aerospace said it would buy castings supplier Consolidated Precision Products for $11.75 billion, bringing a key part of its engine supply chain in-house. This is GE Aerospace's largest acquisition since it became a standalone company in 2024.

Meta Platforms released its new artificial-intelligence agent designed to carry out tasks on a user’s behalf. The company's Muse agent, known internally as Hatch, is the centrepiece of CEO Mark Zuckerberg's plan to supply its customers personalised AI assistants. The agent will initially only be available in the US via a dedicated Muse app or Meta's WhatsApp messaging service, the company said in its announcement.

European Stock Indices

CAC 40 +0.14%
DAX +1.10%
FTSE 100 -0.10%

Commodities

Gold spot -1.15% to $4,354.19 an ounce
Silver spot -0.59% to $65.75 an ounce
West Texas Intermediate +2.82% to $94.05 a barrel
Brent crude +2.13% to $99.07 a barrel

Gold prices edged lower on Tuesday, as the highest rise in oil prices in 6 weeks fuelled inflation concerns and boosted expectations that the Fed would hike rates next week.

Spot gold was -1.15% to $4,354.19 an ounce.

Spot silver -0.59% to $65.75 per ounce.

The price of copper hit a record high on Tuesday, as global supply tightened on fears of possible tariffs. Three-month copper on the London Metal Exchange was up +1.5% at $14,728 a tonne.

Crude oil prices closed higher on Tuesday after Iran-backed Houthis in Yemen attacked Saudi energy facilities. This appeared to be among the largest carried out against Saudi Arabia.

Additionally, the US struck targets near Kharg Island and the port city of Jask, according to Fox News. Bloomberg news noted that Iran’s state TV said tanker crews in the vicinity of Kuwaiti and Bahraini piers should “immediately abandon their vessels, whether at anchor or docked, as they will be targeted.”

Brent crude futures rose +2.13%, to settle at $99.07 a barrel. WTI crude rose +2.82%, to settle at $94.05. 

Oil shipments remain severely disrupted, with the number of commodity vessels sailing through the Strait of Hormuz totalled seven on Monday, compared with eight on the previous day, Kpler data showed on Tuesday.

Note: As of 4 pm EDT 8 September 2026

Currencies

EUR -0.03% to $1.1623
GBP -0.03% to $1.3533
Bitcoin -0.91% to $78,513.00
Ethereum -0.29% to $2,484.06

The dollar was up on Tuesday against the euro and the British pound. There was increased safe haven demand for the dollar as attacks by the Houthis on Saudi Arabia intensified, resulting in a rise in global inflation fears as Brent hit a near six week high. The dollar index rose +0.02% to 98.86.

The euro was down -0.03% at $1.1623. Sterling was also down -0.03% to $1.3533. 

On Tuesday BoE Governor Andrew Bailey, testifying before the House of Commons’ Treasury Select Committee, admitted that the UK could face higher energy prices due to the near closure of the Strait of Hormuz and increasing pressures on refining capacity. 

He also cited droughts in the UK and El Niño conditions around the world as upside risks to inflation. The BoE is expected to keep rates on hold when it meets later this month. However, markets are pricing in at least one 25 bps rise this year.

The Japanese yen rose +0.25% against the dollar to ¥153.96 per dollar.

Fixed Income

US 10-year Treasury +1.4 basis points to 4.798%
German 10-year Bund -2.5 basis points to 3.360%
UK 10-year Gilt unchanged at 5.106%

Treasury yields edged higher on Tuesday as traders await PPI on Thursday and CPI on Friday for further clues as to whether the Fed is likely to raise interest rates this month. Also, today information regarding the size of Treasury Secretary Bessent’s buyback operation on Thursday will be released. 

According to the CME FedWatch tool, traders are pricing a 59.3% probability of a 25 bps rate hike at the Fed’s 16 September meeting, down from last week’s 67.2% probability. 

The 2-year note yield, which typically tracks Fed funds rate expectations, rose +1.5 bps to 4.394%. The yield on the US 10-year notes was +1.4 bps to 4.798%.

The spread between yields on two- and 10-year Treasury notes, an indicator of economic expectations, flattened to 40 bps.

The Treasury saw good demand for a $58 billion auction of three-year notes on Tuesday. The debt sold at a high yield of 4.474%, slightly below where it traded ahead of the auction. Demand was 2.72x the amount of debt on offer, the highest since November.

The Treasury will also sell $39 billion in 10-year notes today and $22 billion in 30-year bonds on Thursday.

Eurozone bond yields also rose on Tuesday with German bund yields hitting 15-year highs in anticipation of this week’s ECB meeting following the surge in energy prices, increasing German political uncertainty and volatility around the Japanese yen.

Germany's 10-year bond yield was down -2.5 bps to 3.360%, after reaching 3.398%, the highest since April 2011. The rate-sensitive 2-year yield fell -1.5 bps to 2.98%. 

French 10-year yield was -2.5 bps to 4.22%, while the Italian 10-year BTP was down -1.0 bps to 4.20%.

Markets have priced in a 25 bps rise this week and are also now pricing in an 80% chance of another 25 bps rise in December. 

In the UK, the benchmark 10-year gilt was unchanged at 5.106%.

Note: As of 4 pm EDT 8 September 2026

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