To The Moon

Thursday, 10 September 2026

Escalating US–Iran tensions pushed Brent crude above US$100, while inflation concerns and a US Treasury bond buyback plan that fell short of some investors’ expectations weighed on stocks and bonds; AI applications and new technology products continued to provide catalysts for individual stocks.

S&P 500: −0.48%

Dow Jones: −0.77%

Nasdaq Composite: −0.64%

Source: Reuters market wrap

US 2-year Treasury yield: Up approximately 3 basis points to 4.42%

US 10-year Treasury yield: Up approximately 3 basis points to 4.84%

Source: WSJ bond market report

News

1.) China’s prices recover as AI demand lifts storage equipment prices; DeepSeek price cuts and IPO developments attract attention

* According to the supplied report, China’s August CPI rose 0.8% year on year, accelerating from the previous reading, while PPI increased 3.8%. Both measures shifted from monthly declines to increases, indicating a recovery in consumer prices and production costs.

* AI companies’ strong demand for computing power and storage helped push data storage equipment prices up 2.1% month on month.

* Higher prices could increase revenue and profits for storage equipment manufacturers, but also raise procurement costs for cloud providers and data centres. The same development therefore affects companies differently across the supply chain.

* Rising prices do not necessarily signal a broad consumer recovery. If increases mainly reflect higher energy and technology equipment costs, they may be driven by costs rather than stronger consumer demand. Original report

* A separate report said DeepSeek is accelerating preparations for an IPO on Shanghai’s STAR Market, with CITIC potentially acting as its listing adviser. This represents progress towards a listing, rather than confirmation that an IPO has been approved. Original report

* DeepSeek announced price reductions for some services. The report quoted a cache-hit price of RMB0.02 and a cache-miss price of RMB1, making the latter 50 times higher. The applicable models and billing units should still be checked against the official pricing schedule. Original report

* A “cache hit” simply means that when users reuse the same content, the system can reuse previous computations instead of processing everything again, resulting in a lower price.

* This is particularly helpful for customer service, coding and enterprise knowledge bases that repeatedly use the same material. Lower prices could attract more users, but do not mean that every AI call becomes 50 times cheaper.

Market impact: Higher storage equipment prices could benefit related hardware companies, while DeepSeek’s price cuts may intensify competition in AI services and pressure model providers’ profit margins.

Positive note: If lower prices attract more users and increase AI usage, the industry could offset lower revenue per call through higher volumes.

2.) Middle East tensions worsen as Brent tops US$100, raising inflation and rate-hike concerns

* US–Iran tensions have affected oil tankers and commercial shipping. Markets are concerned that prolonged disruption in the Strait of Hormuz could make global oil transportation more difficult.

* According to the supplied report, Iran said it would establish a new maritime “sanctions zone”. Investors need to monitor its location, enforcement and whether commercial vessels can pass safely. Original report

* Trump said the Iran conflict would end “immediately” after the US midterm elections and oil prices would fall, adding that Putin wanted to reach an agreement. These remain political statements; delivery depends on an actual ceasefire and the restoration of shipping. Original report

* Brent crude rose approximately 3.4% on Wednesday to close at US$101.21 per barrel, while WTI settled at US$96.05. Concerns about oil supply disruption remained the main driver. Source: Reuters

* HSBC warned that disruption to shipping through the Strait of Hormuz could become a persistent risk. Businesses could face higher transportation, insurance and inventory costs, alongside more expensive oil. Original report

* Higher oil prices typically raise petrol, aviation fuel and logistics costs first. If prices remain elevated, these costs could spread to food, goods and services, leaving households with less money for other spending.

* The supplied report indicated that markets briefly priced in approximately a 60% probability of a September Fed rate hike. This reflected expectations at that moment, rather than a confirmed Fed decision, and will continue to change with oil prices and inflation data. Original report

Market impact: Persistently higher oil prices could reignite inflation, prompting the Fed to delay rate cuts or consider raising rates, while weighing on airlines, transportation, consumer discretionary companies and highly valued technology stocks. Trump’s comments about ending the conflict after the midterms, lower oil prices and Putin’s willingness to reach an agreement could reduce the war premium in oil if they translate into credible ceasefire arrangements. Until a ceasefire, shipping recovery and stable supply are confirmed, however, markets are more likely to treat them as political signals than a definitive resolution of the risks.

Positive note: A ceasefire and a return to normal shipping through the Strait of Hormuz could reduce oil’s war premium, easing business costs and interest-rate pressure.

3.) Treasury buybacks fall short of market expectations; long-term yields could face further upward pressure

* The US Treasury said it would buy back up to US$6 billion of government bonds with remaining maturities of 10–20 years on Thursday. Although the programme expanded, it fell short of some investors’ expectations.

* Some investors had hoped for a larger and more definitive buyback commitment. The less aggressive outcome weighed on long-term Treasury prices and pushed yields higher. Source: WSJ buyback report

* Treasury buybacks primarily manage government debt and improve market liquidity; they are not equivalent to Federal Reserve quantitative easing. Their ability to materially ease financing pressure also depends on how much debt the Treasury subsequently issues and across which maturities.

* Impact on short-term Treasuries: The US 2-year yield mainly reflects expectations for future Fed interest rates, so Treasury purchases of longer-term bonds have a relatively limited direct effect.

* Impact on long-term Treasuries: A smaller-than-expected buyback provides less support than investors anticipated, potentially allowing long-term yields to rise further. The actual outcome also depends on subsequent debt issuance, investor demand and Fed policy expectations.

Market impact: These developments have a more direct effect on long-term Treasuries. If expectations for Fed rate cuts remain unchanged, long-term yields could rise more than short-term yields, steepening the yield curve.

Positive note: Expanded buybacks can still improve liquidity in some Treasury securities, while higher yields may attract long-term investors, although this does not guarantee an immediate rebound in bond prices.

4.) Apple’s foldable iPhone, Meta’s personal AI agent and Google’s data centre investment bring technology competition into practical use

* According to the supplied report, Apple launched its first foldable iPhone Duo, starting at approximately RMB16,000 in China, with the A20 Pro chip powering both the Duo and iPhone 18 Pro. Original report

* A foldable design allows Apple to offer a more differentiated premium product that could encourage high-end users to upgrade. Sales will still depend on durability, software experience and consumers’ willingness to pay a higher price.

* Analysts also cautioned that a higher selling price does not necessarily mean a higher profit margin. Foldable displays, hinges, manufacturing yields and repair costs could all constrain profitability. Original report

* Meta introduced its personal AI agent, Muse, which can help users shop, book tickets and complete forms. This highlights the evolution of AI from answering questions to carrying out tasks.

* Meta plans to promote the service through WhatsApp, Instagram and Facebook. Investors should watch usage frequency, monetisation potential, AI operating costs, privacy and execution accuracy. Source: Muse report

* According to the supplied report, Google plans to invest €13 billion in Finland and build at least three new data centres, expanding its European cloud and AI infrastructure. The construction timeline remains subject to company disclosures. Original report

* Put simply, Apple provides AI devices, Meta develops AI applications and Google builds the computing infrastructure behind them. Suppliers of chips, storage, optical communications, power and cooling could benefit, although actual orders are still needed to confirm this.

Market impact: If Apple’s foldable phones and Meta’s personal AI assistant increase adoption and real demand, the path to AI commercialisation and monetisation will become clearer. Growing user numbers, higher engagement and increasing AI service revenue could give Apple, Meta and other technology companies stronger incentives to expand capital expenditure on data centres, computing capacity, chips and related infrastructure. This could establish a cycle of “product adoption → user growth → revenue generation → capital expenditure expansion”. Once established, the AI investment story could increasingly translate into sustained business growth and further expansion across the supply chain.

Positive note: Successful Apple and Meta products could make AI revenue opportunities more tangible, encouraging continued technology investment and supporting demand for computing power, storage, chips, optical communications, power and cooling in a mutually reinforcing cycle between applications and infrastructure.

Daily | Today’s Watchlist

All times below are Singapore/Beijing time.

Key developments

* European Central Bank interest-rate decision: Watch whether higher energy prices influence policy, and the implications for the euro and global bond yields. Source: Reuters

* US Treasury buyback of up to US$6 billion in longer-term bonds: Monitor the actual amount purchased, investor offers and the subsequent response in long-term Treasury yields. Source: WSJ

* Middle East tensions and Strait of Hormuz shipping: Watch tanker safety, further increases in insurance costs and any steps towards de-escalation.

Major US economic releases

* Tonight, 8:30 pm: August US PPI. Focus on producer price increases and whether energy costs are spreading to other industries.

* Tonight, 8:30 pm: US initial and continuing jobless claims. Assess whether the labour market remains stable.

* Tomorrow, 8:30 pm: August US CPI. CPI is not being released today, although investors may adjust positions ahead of the report. BLS release calendar; US Department of Labor weekly claims schedule

US technology earnings

* Adobe (ADBE): Thursday after the US market close, early Friday morning in Singapore. Focus on subscription revenue, annual recurring revenue (ARR), revenue from AI products such as Firefly, and full-year guidance. Earnings date source: Barron’s