Bloomberg

Lead Story

Brent crude surged past $105 a barrel as Iran signaled readiness for a more intense war with the US, while Saudi Arabia reported its crude output plunged to the lowest level since 1990 amid Persian Gulf supply bottlenecks. The energy price shock rattled global markets, driving US Treasury yields to multiyear highs, spurring bets on a Federal Reserve rate hike, and forcing the European Central Bank to raise interest rates by 25 basis points to 2.5%.

Markets & Economics

• ECB Raises Interest Rates to 2.5% as Iran War Drives Energy Inflation: The European Central Bank raised its deposit rate by a quarter-point to 2.5%, marking its second hike since the outbreak of the Iran war. President Christine Lagarde warned that headline inflation will remain well above target into 2027 as energy shocks continue to strain the euro-area economy.
• US Producer Prices Surge 0.4% in August on Energy Costs, Fueling Fed Hike Bets: The US Producer Price Index rose 0.4% in August—the largest monthly gain since May—and 5.4% from a year earlier, driven by surging energy prices. The wholesale inflation jump boosted the US dollar and spurred expectations that the Federal Reserve could raise rates at its September meeting.
• Treasury Yields Reach Multiyear Highs as Bessent Buyback Operation Disappoints: US government bond yields extended their climb to multiyear highs after Treasury Secretary Scott Bessent’s expanded debt buyback operation purchased less longer-dated debt than market participants expected. The smaller-than-anticipated buyback intensified selloffs across sovereign debt markets already unnerved by rising fiscal deficits.
• US Existing Home Sales Drop to Lowest Level in Over a Year as Mortgage Rates Hit 6.76%: Previously owned home sales in the US slowed to their weakest pace in more than a year as average 30-year mortgage rates rose to 6.76%. Escalating borrowing costs and persistent affordability constraints continue to freeze transactions as prospective buyers wait for rate relief.
• Bank of Japan Signals Further Rate Hikes Amid Widening US Yield Divergence: Bank of Japan board member Kazuyuki Masu stated that the central bank will continue increasing borrowing costs to ensure inflation remains anchored near its 2% target. The hawkish stance comes as the yield gap between Chinese and US 10-year sovereign bonds widened to a record high, accelerating capital outflow concerns across Asian economies.

Business & Industries

• Oracle Cloud Revenue Surges as Heavy AI Debt Load Tests Investor Tolerance: Oracle Corp. delivered strong quarterly cloud revenue growth that beat Wall Street estimates, demonstrating durable demand for artificial intelligence infrastructure. However, the stock faced volatility as investors scrutinized the heavy debt load taken on to expand data centers.
• Apple Debuts First Foldable iPhone ‘Duo’ to Revitalize Smartphone Growth: Apple Inc. unveiled its first foldable smartphone, the iPhone Duo, marking a major strategic expansion of its hardware lineup. The company is betting the new form factor will spark a premium upgrade cycle and reignite sales growth across its core division.
• Intesa Shareholders Approve Share Issue for €35.4 Billion Takeover of Monte Paschi: Intesa Sanpaolo SpA investors voted in favor of issuing new shares to fund its €35.4 billion ($41.2 billion) acquisition of Banca Monte dei Paschi di Siena SpA. CEO Carlo Messina’s successful vote clears a major hurdle toward executing a transaction that will consolidate Italy’s financial sector.
• Macy’s Tumbles on Weak Guidance Despite Q2 Sales Beat and Raised Annual Outlook: Macy’s Inc. shares dropped after the retailer offered a third-quarter forecast that fell short of expectations, overshadowing a solid second-quarter earnings beat and an upward revision to full-year targets. The cautious guidance underscores growing pressure on US department stores as consumers scale back discretionary spending.
• Texas Stock Exchange Wins Sunoco and Energy Transfer Listings From NYSE: Energy Transfer LP and Sunoco LP announced decisions to move their primary stock listings from the New York Stock Exchange to the upstart Texas Stock Exchange. The double migration provides a high-profile endorsement for the Dallas-based exchange as it competes against Wall Street’s dominant listing venues.

Policy & World

• Trump Floats $5,000 Cash Dividend for Americans If Republicans Retain Congress: President Donald Trump pledged a $5,000 payout to every American adult if the Republican Party maintains control of the House and Senate following November’s midterm elections. The proposal faced immediate pushback over its estimated $1 trillion-plus cost and potential to exacerbate federal debt pressures.
• Xi Jinping Travels to India for First Visit Since 2019 to Ease Bilateral Tensions: Chinese President Xi Jinping will travel to New Delhi for his first visit to India in seven years to hold high-stakes discussions with Prime Minister Narendra Modi. The summit aims to navigate border disputes, stabilize trade ties, and manage strategic competition between the two Asian powers.
• Carney Signals Canada Won’t Retaliate Against Targeted US Trade Measures: Canadian Prime Minister Mark Carney described recent US trade curbs as “modest” and signaled Ottawa will not impose immediate counter-tariffs, leaving room for a diplomatic resolution. Concurrently, Canada signed a 100-year defense partnership with Ukraine focused on joint drone production.
• UAE Pledges $46 Billion Investment in Germany to Strengthen European Economic Ties: The United Arab Emirates unveiled a €40 billion ($46 billion) investment package for Germany, allocating capital toward artificial intelligence, energy transition, and industrial technology. The agreement underscores Abu Dhabi’s strategy to deepen long-term economic alliances in Europe.

Opinion & Analysis

• Bessent Dares Bond Traders to Burn Down the House: Bloomberg Opinion’s daily macro analysis argues that Treasury Secretary Scott Bessent is engaging in a risky battle of wills with bond markets. By challenging traders on yields and exchange rates while oil surges above $100, Bessent risks compounding volatility across sovereign debt and currency markets.
• Some Anthropic Engineers Think AI Might End Us. Why Won’t They Stop?: Bloomberg Opinion examines the paradoxical mindset in Silicon Valley, where artificial intelligence developers race toward superintelligence despite internally acknowledging catastrophic existential risks . The piece questions why AI labs continue aggressive deployment while their own safety researchers warn of severe threats .
• Venezuelan Oil Deal Is High Risk and Low Return for US: Bloomberg Opinion critiques the US administration’s initiative to take control of Venezuelan crude production, calling it a high-risk gamble with minimal structural payoff . The commentary cautions that infrastructure decay and political volatility make claims of seamless energy dominance unrealistic .

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