MARKET WRAPS
Stocks:
European shares were down as Brent crude briefly topped $100 a barrel for the first time since July amid fears of prolonged supply disruptions.
Oil prices extended gains after the conflict continued to escalate between the U.S. and Iran, with the U.S. Central Command saying it destroyed five Iranian oil vessels.
"Recent developments only reinforce the view that we're still some way from a restart in talks," ING said.
Investors are also awaiting the European Central Bank decision Thursday. Money markets have fully priced in a 25-basis-point rate increase which would bring the deposit rate to 2.50%.
The main question for investors is what changes the ECB will make in its new GDP and inflation forecasts, and what signals it gives for the future policy path.
U.S. Markets:
Stock futures were mixed Wednesday as oil rose after fresh U.S.-Iranian attacks added to an escalating conflict.
For the day ahead, the Treasury's increase in buybacks for longer-dated bonds will kick in.
Forex:
The euro firmed against the dollar, driven by the dollar's broader weakness and in anticipation of an interest rate hike by the ECB.
The dollar fell to its lowest in nearly three weeks against a basket of currencies, weighed by a decline in Treasury yields and by continued strength in the Japanese yen.
Bonds:
Eurozone bond yields rose, responding to higher oil prices, while investors' focus remains on the ECB's interest-rate decision on Thursday.
The two-year Treasury yield edged up, while longer-dated yields declined slightly in early trade, shrugging off a rise in oil prices and further military escalation between the U.S. and Iran.
European government bonds were cheap at current yield levels and hence attractive for long-term investors, J.P. Morgan said.
Lazard Asset Management sees the recent rise in long-end government bond yields less as a selloff and more as a repricing of fiscal risks, "in other words, as a structural adjustment rather than a break in the trend." Energy:
Brent crude oil contracts for November delivery were 2% higher, while WTI rose 1.5%.
Major banks--including Goldman Sachs, Bank of America and UBS-- all lifted their oil-price forecasts for this year and next, as prolonged shipping disruptions raise the geopolitical risk premium.
Metals:
Gold prices rose as escalating attacks in the Middle East pushed oil higher, raising concerns over inflation and interest-rate hikes.
Copper
Copper futures continued to hover around all-time highs after a multiday rally driven by concerns over potential U.S. tariffs and supply challenges at key mines worldwide.
Prices were likely to remain elevated as tariff uncertainties linger, ING said. The metal has been hitting record high recently,driven by expectations of U.S. tariffs on refined copper imports.
Iron ore
Iron ore was lower in early trading, weighed by sluggish demand recovery due to poor mill profitability, Baocheng Futures said.
EMEA HEADLINES
Google to Invest $15 Billion in Data Centers and Infrastructure in Finland
Google plans to invest at least 13 billion euros ($15 billion) in artificial intelligence infrastructure in Finland over the next two years.
The investments across four locations, planned between 2027 and 2028, include the construction of data centers and supporting infrastructure, in addition to support for clean energy projects and dedicated nature and community funds.
Brent Hits $100 as U.S.-Iran Escalation, Houthi Strikes Deepen Gulf Supply Fears
Brent crude topped $100 a barrel for the first time since July amid fears of prolonged supply disruptions as fresh U.S.-Iran attacks and Iranian missile fire into Jordan added to an escalating conflict that has also spread to Saudi energy infrastructure through renewed Houthi strikes.
Front-month Brent crude oil futures rose 2.2% to $100.06 a barrel, while front-month West Texas Intermediate crude oil futures advanced 1.8% to $94.70 a barrel, before both contracts edged back slightly.
Zara Parent Inditex Posts Steady Growth Despite Tough Market Backdrop
Inditex, the owner of Zara, said recent sales growth was broadly stable at a time when retailers face challenging market conditions and continued disruption from the war in the Middle East.
The Spanish company, also home to brands such as Massimo Dutti and Bershka, booked a 9% on-year increase in sales from Aug. 1 through Sept. 7 on a constant-currency basis.
Are Germany's Factories Turning a Corner?
For Volkmar Noeske, chief executive of German defense manufacturer Jowa-KLN Group, 2026 has been a challenging year. Just not in the way many economists feared.
As the war in Iran drove up energy prices and threatened fresh disruption for German industry, Noeske has instead been scrambling to keep up with a rush of orders.
GLOBAL NEWS
Is China Stealing American AI? Why 'Distillation' Has Washington Up in Arms
U.S. security agencies on Tuesday accused six Chinese artificial intelligence companies of systematically exploiting American AI models to train their own systems. The agencies, including the National Security Agency and the Federal Bureau of Investigation, said the Chinese companies have engaged in "aggressive, malicious, and targeted distillation activities at an industrial scale."
The key word is "distillation," a technique by which a new AI model taps the expertise of an existing one. Here is a guide to the issue and how it will affect the U.S.-China race for supremacy in AI, with President Trump set to meet Chinese leader Xi Jinping this month.
The ECB is virtually certain to hike rates Thursday. Here is why Wall Street is bracing for what comes next.
Futures markets are pricing in a 99.7% probability that the European Central Bank will tighten monetary policy by 25 basis points to 2.5% when it meets Thursday. What's less clear is whether its president, Christine Lagarde, will signal even more restrictive policy in the months to come or whether she will tack a more cautious, non-committal course. Much depends on the potential for resolution or escalation in the Strait of Hormuz.
ING's economists told their clients in a note published Tuesday that while anticipating the 25bp move like almost everyone else, they think Lagarde will keep her options open and push back against the current bond market consensus that there will be another three quarter-point increases by June in 2027.
RBA's Hawkish Comments Have Lit Fuse for September Rate Increase
SYDNEY-Central bankers are usually reserved, with their public comments limited to pre-prepared lines that are often coached into them by internal staff.
But there are also rare moments when the curtains are pulled back, and the reality of the debate within the corridors of a central bank are made visible.
Trump Signs Orders to Ban Some Canadian Products From U.S. Market
President Trump on Tuesday signed orders to ban the importation of many dairy products, alcoholic beverages and motorcycles from Canada in three weeks-a retaliation for Canadian tariffs that took effect earlier the same day.
Trump also modified the scope of some existing 50% tariffs on Canada, removing levies on cement, road salt and some hospital products, while imposing 50% levies on other products including some all-terrain vehicles, boats and cheeses.
Trump Gifted Natalie Harp, Two Other Aides $45,000 Each Last Christmas
WASHINGTON-President Trump gave cash gifts of $45,000 apiece to three White House aides last Christmas, according to financial disclosure forms released by the administration.
The money, which was described in the forms as a "cash gift for the holidays," was disclosed by Trump's executive assistant Natalie Harp, communications adviser Margo Martin, and Chamberlain Harris, the deputy director of Oval Office operations.
Republicans' Midterms Strategy Will Test Trump's Political Power as Polling Sags
DALLAS-Republicans are putting an unpopular president at the center of their campaign to keep control of Congress.
During the GOP's two-day convention here this week, President Trump-term-limited and facing backlash from voters-will be everywhere. Dozens of Republicans will take the stage to defend his record. The president will deliver a prime time keynote address during an event that organizers have compared to one of Trump's raucous rallies.
States That Gave Data Centers Billions in Tax Breaks Are Now Ripping Up the Deals
Over a decade ago, Ohio lawmakers exempted tech companies from sales taxes on computer servers and other equipment needed for data centers, betting that changes worth millions of dollars would lure much-needed investment to the state.
It worked, turning Ohio into one of the leading destinations for data centers. But then the artificial-intelligence boom supersized the tax exemption, pushing it to more than $1.5 billion last year, more than 10 times the original state estimate. Voter outrage after news outlet Signal Ohio reported the scale of the provision prompted Republican Gov. Mike DeWine to pause new applications for the sales-tax exemption in May.
Write to priscila.barrera@wsj.com
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