A retreat in oil prices has provided some relief to Wall Street traders concerned about inflation, leading to a stabilization in stocks and bonds after a period of recent losses. West Texas Intermediate crude fell below $90, halting a two-day surge that was triggered by conflict between the US and Iran over the Strait of Hormuz. This respite also saw Treasury yields remain largely unchanged after having surged to multi-year highs. The S&P 500 showed minimal movement, while the Nasdaq 100 fell 0.2% and the Dow Jones Industrial Average rose 0.4%.
Federal Reserve Bank of New York President John Williams indicated that inflation continues to ease, attributing this to the fading impact of tariffs and stating that higher energy prices are not spreading to other services. He noted that recent data has been encouraging, with a slow downward trend in inflation. This comes ahead of Friday's payrolls report, following data that indicated a more moderate pace of job additions by US companies in August. Fed Chairman Kevin Warsh last week acknowledged some areas of concern but generally characterized the labor market as consistent with full employment.
Dell Technologies Inc. experienced an 11% jump in its stock price due to a strong outlook, boosting its annual sales forecast by $25 billion, signaling increased demand for servers in AI tasks. In other corporate news, Nvidia Corp. is reportedly in advanced discussions to acquire AI startup Hugging Face for approximately $14 billion. Uber Technologies Inc. announced a significant restructuring, cutting about 3,300 roles or 10% of its global staff, to streamline operations and reallocate spending towards its ride-sharing, delivery, and robotaxi ventures. Chevron Corp. plans a $7 billion investment over five years through joint ventures to more than double crude production in Venezuela, marking a substantial commitment in efforts to revitalize Venezuela's oil industry.
PG&E Corp. intends to defer about $2 billion in investments next year as part of a strategic review. This decision follows the company's assertion that proposed changes to California's wildfire response were insufficient to protect it and similar companies from disaster costs. West Texas Intermediate crude fell 0.8% to $89.51 a barrel, while spot gold rose 0.8% to $4,365.36 an ounce.
