CNBC

Lead Story

Escalating Middle East hostilities between the U.S. and Iran pushed international benchmark Brent crude above $99 per barrel, igniting inflation fears and triggering a broad stock market sell-off. The spike in energy costs dragged the Dow Jones Industrial Average down 1.2% while pushing the 10-year Treasury yield above 4.8% as Wall Street reassesses Federal Reserve interest rate expectations ahead of crucial inflation prints.

Markets & Economics

Wall Street closed lower across the board as the Dow Jones Industrial Average dropped 1.2% (down nearly 630 points), the S&P 500 fell 0.6%, and the Nasdaq Composite slipped 0.3% amid climbing energy costs. Benchmark 10-year Treasury yields briefly topped 4.80% to hit 4.8063% while 30-year yields rose to 5.2708%, tracking Brent crude’s rally toward $99 a barrel and WTI crude topping $94 a barrel. Fixed-income markets are bracing for Thursday’s U.S. Producer Price Index (projected at +0.4% month-over-month) following August’s blowout 162,000 payrolls gain, with fed funds futures now pointing to a ~60% probability of an interest rate hike at the September 15-16 FOMC meeting. Internationally, China’s trade surplus expanded to $119.09 billion as exports surged 25% year-over-year while imports grew 28.2% (missing 30% forecasts), even as HSBC hiked its S&P 500 target to 8,100 on corporate earnings resilience.

Business & Earnings

Qualcomm shares jumped 4% after sealing a multi-generational AI infrastructure pact with Amazon Web Services that included issuing Amazon warrants for 25 million shares worth $4 billion, boosting Qualcomm’s push toward a $15 billion data center revenue target. In aerospace and defense, GE Aerospace agreed to acquire castings maker Consolidated Precision Products for $11.75 billion to bolster its engine supply chain. Biopharma saw major volatility as Novartis plunged nearly 9% following Phase 3 clinical trial failures for its muscle-wasting drug del-desiran and cholesterol treatment pelacarsen, which knocked rival Amgen down nearly 10%. Meanwhile, AstraZeneca released strong Phase 3 data for its COPD biologic tozorakimab, reinforcing peak annual sales expectations above $5 billion, while European AI startup Mistral raised $3.5 billion led by Samsung at a $24 billion valuation.

Investing & Commentary

CNBC’s Jim Cramer urged investors to look beyond concentrated AI data center trades, highlighting actionable value in aerospace (GE Aerospace), fintech (Robinhood, Affirm), and energy infrastructure (Enbridge, Enterprise Products Partners). On Wall Street, UBS upgraded Lockheed Martin to Buy with a $674 price target, pointing to 38% free cash flow growth through 2030, while Pivotal Research initiated SpaceX at Buy with a $220 price target, betting on Starship reusability breakthroughs. Meanwhile, RBC initiated Shake Shack at Outperform with an $89 price target, citing margin expansion from lower beef prices, and analysts noted that data center REITs like Equinix are gaining pricing power due to local development pushback.

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• How One Hedge-Fund Manager Built His Firm to Be Powered Entirely by AI Agents (CNBC AI Age): Former Fast Money trader Brian Kelly explains how his firm Bracket22 operates 24/7 with specialized AI agents handling quant strategies and technical analysis.

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