To The Moon

If the early‑week softness in crude and the rise in yields felt uncomfortable, the latest moves demand a closer look.

Treasury yields broke new ground:

• The 10‑year pushed to 4.92%, its highest level since 2023.

• The 30‑year climbed to 5.35%, extending the global sovereign sell‑off.

Energy markets added fuel to the fire. Following Iran’s strike on US Navy vessels, WTI surged past $100, while Brent accelerated toward $110. The geopolitical premium is back, and it’s dictating cross‑asset flows.

Trump has warned that oil prices may not ease before the midterms, still two months away. With the US–Iran conflict intensifying, investors are increasingly concerned that the energy shock will bleed into broader inflation.

Producer inflation confirmed the pressure: Wholesale prices rose 0.4% MoM, driven by diesel. Today’s CPI will determine how much of this shock is already spilling into consumer inflation.

Rates: The Market Isn’t Buying the Stabilization Narrative

Despite the administration’s attempts to calm the bond market, including Treasury Secretary Scott Bessent’s unusual expansion of the buyback program, yields continued to climb. The market is now pricing in a Fed hike next week, effectively dismissing the intervention.

And the tightening bias isn’t limited to the US.

The ECB raised rates from 2.25% to 2.5%, its second hike this year. Christine Lagarde warned inflation will be “longer‑lasting than anticipated.”

Global central banks are being forced into action by the combination of geopolitical risk, energy shocks, and sticky price dynamics.

Equities: Four Straight Down Days

Ahead of today’s CPI release, equities extended their pullback:

• $NASDAQ(.IXIC)$ : –0.7% $NVIDIA(NVDA)$ $Apple(AAPL)$ $Microsoft(MSFT)$

• Dow: –0.6% (–316 pts)

• $S&P 500(.SPX)$ : –0.6%

Stocks

The driver is clear: oil above $100, Brent above $107, and 10‑year yields flirting with 5%, a level many desks consider a tipping point for risk assets.

Sector performance:

• Best: Communication Services +0.3%

• Worst: Materials –1.5%

Single‑stock movers:

• $Skyworks Solutions(SWKS)$ : +9.8%

• Cooper Companies: –14.7%

Today: The CPI That Decides Everything

The August CPI (8:30 a.m. ET) will determine whether the Fed hikes next week.

Consensus expectations:

• Headline MoM: +0.4% (vs. +0.1% prior)

• Headline YoY: 3.3% (down from 3.4%)

• Core YoY: 2.4%, potentially the lowest in 5+ years

Fed Chair Kevin Warsh has emphasized the importance of tracking how many CPI components still grow above 3% annually. Tomorrow’s print feeds directly into PCE and will shape next week’s vote.

With the Fed in blackout mode, markets must interpret the data without guidance, and decide whether inflation is cooling enough to pause, or hot enough to force a hike.

The Setup Going Into Friday

• Oil above $100

• Yields near 5%

• Global central banks tightening

• Geopolitical risk rising

• CPI expected to re‑accelerate MoM

• Equities under pressure for the fourth day

The decision will be in the details, and todays CPI will set the tone for the rest of September.

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This summary is for informational purposes only and does not constitute financial advice. Investors should conduct their own research before making investment decisions.

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