US stocks experienced a decline as escalating oil prices, driven by an impasse between the US and Iran over the Strait of Hormuz, intensified concerns about inflation and potential Federal Reserve interest rate hikes. Brent crude pared its rally to around $107, but caution persisted due to fading optimism for a breakthrough in peace talks. The S&P 500 erased its monthly gains, while the Nasdaq 100 dropped approximately 1.5%. The Dow Jones Industrial Average fell 0.7%.
Bond markets saw significant activity, with 10-year Treasury yields hitting a nearly two-decade high at 5.26%, and 30-year Treasury yields reaching their highest levels since mid-May 2004 at 5.576%. This rise in yields was attributed to inflation concerns, federal borrowing, and a resilient economy. Economists anticipate strong consumer spending data for August and robust job growth for September, bolstering arguments for higher interest rates. The dollar rose, while gold dipped 3.9% to $4,118.15 an ounce.
Corporate news saw Nvidia Corp. announce a record $150 billion increase to its share buyback plan, reflecting CEO Jensen Huang's confidence. However, software companies saw their shares sink after Meta Platforms Inc. introduced its Meta Enterprise Platform, leveraging its Muse AI agent product for businesses. Meta also tapped MongoDB Inc.'s CEO to lead its new enterprise AI platform. Snowflake Inc. plans to raise $3.5 billion from convertible debt, and Paramount Skydance Corp. held investor calls for approximately $44.4 billion in bonds to finance its acquisition of Warner Bros. Discovery Inc. SpaceX achieved a significant milestone with its Starship rocket reaching orbit for the first time.
