Markets

⚠️ Iran Deal Talks Cooling Oil — Watch the Dollar

Overnight bombshell: US and Iranian negotiators in New York are exploring a phased deal to reopen the Strait of Hormuz. Brent crude dropped below $105 on the news. If this gains traction, we could see oil prices normalize faster than anyone expected — and that changes everything from inflation expectations to Fed calculus. Still early days, but this is the most concrete diplomatic progress since the crisis began in February.

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MARKET SNAPSHOT

US Futures (8:00 AM ET)

• S&P 500: +0.4% — relief rally as yields pull back
• Nasdaq: +0.6% — chips leading the charge
• Dow: +0.2% — modest gains

Asia Close

• Nikkei 225: Rallied, supported by US tech strength
• Hang Seng: -0.3% — Hong Kong held its ground
• Shanghai Composite: -0.8% to -1.2% — mainland selling pressure continues

Europe (Mid-Session)

• European futures firmer as energy prices retreat
• M&A activity and trade updates in focus

Key Levels

• 10-Year Treasury: 5.17% (-3bp) — paring a brutal 20bp two-day surge; still near 19-year highs
• VIX: 15.67 (+3.23%) — slight uptick but nothing alarming
• WTI Crude: ~$93/barrel (-1.7%)
• Brent Crude: ~$105/barrel — off session highs on Iran talks
• Gold: $4,273.80 — holding elevated levels
• Bitcoin: $84,200 (+0.3%) — steady

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TODAY'S CALENDAR

• Time (ET): Event Previous Consensus

• 8:30 AM: **Durable Goods Orders** (Aug, preliminary) -0.2% TBD
• 10:00 AM: **Michigan Consumer Sentiment** (Sep, final) 72.0 ~72.0

Fed Speakers: Light calendar today. Focus remains on digesting this week's yield surge.

Earnings: No major reports today. Costco's blowout last night sets a positive tone.

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TOP 5 HEADLINES

Negotiators meeting on the sidelines of the UN in New York are discussing a potential phased reopening of the critical waterway. Brent crude pulled back sharply on the news. Why it matters: About one-fifth of global oil supplies flowed through the Strait before the crisis. Any credible path to reopening could accelerate the normalization of energy prices — and take pressure off the Fed to stay hawkish.

The 10-year pulled back 3 basis points to 5.17%, paring a two-day, 20+ basis point surge that took yields to their highest levels in nearly two decades. Why it matters: Elevated yields have been the story all week, pressuring equities. The slight reprieve is giving risk assets breathing room, but 5%+ yields aren't going anywhere fast.

The final day of President Xi's Washington visit. The two leaders extended their trade truce, but underlying tensions over AI chip controls, Taiwan, and Iran sanctions remain. Why it matters: The cordial tone is stabilizing for markets, but don't expect major breakthroughs. The AI chip export debate could heat up post-summit.

The PHLX Semiconductor Index popped 3%+ earlier this week with AMD briefly touching a $1 trillion market cap. Chip equipment stocks (ASML, KLAC, LRCX) continue to benefit from the AI infrastructure buildout. Why it matters: The AI trade isn't dead — it's just rotating. Investors who wrote off semis after the summer correction are being reminded why this sector has doubled YTD.

COST reported $6.75 EPS vs. $6.55 expected; revenue hit $95.7B (+11.1% YoY). Comparable sales growth of 9.4% remains robust. Note: $0.15/share came from non-recurring tariff refunds. Why it matters: The American consumer keeps spending. Costco's results suggest discretionary spending remains healthier than the doomers predicted. Worth watching if client portfolios have consumer exposure.

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