Technologies

Investors eyes turn to August inflation figures as yields hit multi-year highs heading into next week

Investors are closely watching next week’s August inflation data after yields reached multi-year highs, with the Federal Reserve’s potential interest rate decisions later this month becoming increasingly important following a hotter-than-expected jobs report.

Following this week’s significantly stronger-than-anticipated August employment report, next week’s inflation data has become even more critical for investors seeking clues about the Federal Reserve’s potential interest rate moves later this month. Friday’s nonfarm payrolls showed an increase of 162,000 jobs last month, substantially exceeding the Dow Jones forecast of 53,000, while the unemployment rate remained steady at 4.1% as expected. July and June figures were also revised upward. Stocks declined as investors adjusted their expectations for the Fed’s decision when it meets September 15-16, with Fed funds futures indicating that bets on a rate hike at that meeting increased to 58% from 49.4% the previous day, according to the CME FedWatch tool. Supporting Fed Chairman Kevin Warsh’s recent remarks about a “quite stable” labor market, the release of August’s producer price index on Thursday and consumer price index on Friday will provide the final pieces for investors to complete their rate path analysis. “What’s happening in the market right now is a tug of war between those concerned about the Fed raising rates and those who believe the Fed will stay on the sidelines,” said Sam Stovall, chief investment strategist at CFRA Research. This focus is intensified by the lack of other significant market catalysts next week, Stovall noted. Unless Russian President Vladimir Putin suddenly announces he’s ending the war in Ukraine or Iran seeks to negotiate a ceasefire, he believes traders will “focus on the hard data.” “They’ll all come from Missouri and say, ‘Show me,'” he said. Yields remain a key concern. While some, like Ameriprise’s Anthony Saglimbene, believe the market may be overreacting to the prospect of a rate hike this month, another factor that could impact equities next week is Treasury yields. Last week, the yield on the 10-year Treasury note rose to its highest level since November 2023, while the 2-year note yield reached its highest point since January 2025. These movements occurred amid a broader increase in global bond yields, partly driven by growing inflation concerns as energy prices remain elevated due to the ongoing Middle East conflict. “Yields are becoming a bigger issue for the market,” said Saglimbene, his firm’s chief market strategist. “Markets see volatility increase when longer-term rates are moving higher, and I think that will be an underlying issue for the market for the rest of this year.” This is particularly true if the 10-year yield begins “moving closer to 5%,” he said. “Markets would have a difficult time with that.” The S&P 500 and Nasdaq Composite ended the week in positive territory, gaining 0.1% and 0.4% respectively, while the Dow Jones Industrial Average fell about 0.3%. The market will be closed Monday for the Labor Day holiday. Week ahead calendar All times ET. Monday, Sept. 7 U.S. markets closed for Labor Day Tuesday, Sept. 8 6 a.m.: NFIB Small Business Index (August) 3 p.m.: Consumer credit (July) Wednesday, Sept. 9 None. Thursday, Sept. 10 8:30 a.m.: Initial jobless claims (week ended Sept. 5) 8:30 a.m.: Producer price index (August) 10 a.m.: Existing home sales (August) 10 a.m.: Wholesale inventories (July) Friday, Sept. 11 8:30 a.m.: Consumer price index (August) 10 a.m.: Consumer sentiment (preliminary, September)

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Technologies

U.S. Energy Secretary Wright: Iran Nuclear Deal May Never Materialize

U.S. Energy Secretary Chris Wright suggested that a nuclear agreement with Iran may never come to fruition, indicating the administration might instead focus on degrading Tehran’s nuclear capabilities. His comments reflect growing uncertainty over diplomatic solutions amid escalating military and economic pressure.

U.S. Energy Secretary Chris Wright stated on Sunday that the United States might not achieve a long-awaited agreement to prevent Iran from developing nuclear weapons, as the ongoing U.S.-Iran conflict continues into its seventh month.

“There may not be a nuclear deal. It might just come down to dismantling their capabilities,” Wright told ABC News’ “This Week.” “Such an agreement could be delayed until Iran’s next administration. We simply don’t know.”

President Trump has consistently emphasized that stopping Iran from acquiring a nuclear weapon remains a key goal of U.S. efforts. Throughout the conflict, he has also attempted to negotiate a deal with Iran, even as energy prices have climbed globally.

Wright’s remarks indicate the administration may aim to stop an Iranian nuclear weapon without signing a formal nuclear agreement.

When asked if his comments suggest the U.S. will continue attacking Iran whenever it tries to reconstruct its nuclear facilities, Wright replied, “You have to eliminate their ability to do so.”

“We are reducing their capacity to build nuclear weapons and, eventually, to deploy them if they succeed,” he said. “This has been a 47-year effort. It’s not easy, but the United States will complete the mission and collaborate with our regional allies.”

Later, during an interview on CBS’ “Face the Nation,” Wright reiterated that President Donald Trump “always prefers a diplomatic resolution and avoids military action unless absolutely necessary.”

“The primary role of our military in the region right now is to prevent the export of Iranian oil or oil-related products, natural gas, or anything else,” he said. “We are strangling their economy to push for either a policy shift from the current regime or a new one.”

Iran vows retaliation

Iranian Parliament Speaker and chief nuclear negotiator Mohammad Bagher Ghalibaf declared on Sunday that Iran’s “proportional responses” to U.S. attacks have ended, though he acknowledged the economic toll of the war.

“If they haven’t realized it yet, they should know before it’s too late that the rules have changed and that any future threat to Iran’s interests and security will be met with a ‘faster, heavier, and more severe’ response,” Ghalibaf said in a post on Telegram.

However, Ghalibaf admitted that alongside the fighting, Iran is dealing with serious economic challenges.

“Sharp fluctuations in exchange rates, inflation, unemployment, and market regulation are major issues putting significant strain on people’s livelihoods,” he said.

He also emphasized the importance of relying on domestic production and leveraging technology to create “short-term and lasting solutions.”

Ghalibaf’s statements follow U.S. airstrikes on three Iranian oil tankers. According to U.S. Central Command (CENTCOM), American forces permanently disabled one tanker near Kharg Island and another off Jask. A separate vessel was targeted in the Gulf of Oman.

Mohsen Rezaei, Secretary of Iran’s Supreme National Security Council, announced on Sunday that Tehran intends to establish a new restricted area near the Strait of Hormuz, which will cover parts of the Persian Gulf, as reported by Reuters.

CENTCOM stated that the attacks were a response to ballistic missiles launched by the Islamic Revolutionary Guard Corps (IRGC) at two U.S. Navy warships. According to CENTCOM, a U.S. aircraft carrier and a guided-missile destroyer evaded the incoming threats, and no American personnel were injured.

“Let the IRGC hear this: if you fire at our ships, we will impose even greater economic consequences — taking out three more of yours,” said Admiral Brad Cooper, CENTCOM commander, in a statement issued Saturday.

“We will not hesitate to protect American forces and, if required, destroy Iran’s limited and vulnerable oil fleet.”

Secretary of Defense Pete Hegseth echoed the sentiment in a post on X, writing: “It’s straightforward: if Iran attacks U.S. Navy ships, we will destroy (and sink) their tankers. All they need to do is stop targeting @USNavy.”

As the third-largest oil producer within OPEC, Iran exported roughly 90% of its crude through Kharg Island prior to the war. Oil exports have been severely disrupted by a U.S.-led blockade initiated in mid-April.

The ongoing conflict between Iran and the U.S. has effectively shut down the Strait of Hormuz — a critical route for global oil supplies — since hostilities began on February 28 with joint American and Israeli airstrikes.

In June, President Donald Trump threatened to occupy Kharg Island as U.S. strikes on Iran continued. More recently, on August 31, he shared an AI-generated video depicting the destruction of Kharg Island.

Expanding sanctions

The attack on oil tankers occurred one day after the Treasury Department imposed sanctions on a small Turkish investment bank and two of its subsidiaries, accusing them of supporting financing for a branch of Iran’s Revolutionary Guard.

These actions are part of broader sanctions introduced by the Trump administration in late August, targeting Iran’s access to digital currencies, advanced technology procurement, gold reserves, commercial aviation, and maritime trade.

Iranian President Masoud Pezeshkian said last month that the country’s foreign trade has declined sharply.

According to the World Bank, Iran’s GDP contracted by 2.7% in the year ending March, largely due to economic disruption from widespread protests last year and increased regional tensions. Inflation reached 62.2% in February, with food prices rising to a record high of 99%, per the World Bank. A New York Times report cited an Iranian official estimating that the war has resulted in the loss of one million jobs.

Technologies

Investors Turn to Upcoming Inflation Data as Yields Reach Record Levels

Strong August job gains and record-high Treasury yields have intensified investor scrutiny ahead of Thursday and Friday’s inflation data releases, as market participants prepare for the Federal Reserve’s upcoming rate decision.

Following this week’s much hotter-than-expected August jobs report, next week’s inflation data takes on even greater importance for investors as they try to determine where the Federal Reserve could go with interest rates later this month. On Friday, nonfarm payrolls rose 162,000 last month, well above the Dow Jones forecast of 53,000, while the unemployment rate came in line with expectations at 4.1%. July and June also saw upward revisions. Stocks fell as investors recalibrated their expectations on the Fed’s rate decision when it meets Sept. 15-16. Fed funds futures pricing showed bets for a hike at that meeting grew to 58% from 49.4% the day before, according to the CME FedWatch tool. With the report supporting Fed Chairman Kevin Warsh’s recent comments that the labor market is “quite stable,” the release of August’s producer and consumer price index readings on Thursday and Friday, respectively, will serve as the final piece in the rate path puzzle for investors. “What’s been happening in the market now is that it’s the tug of war between those who are worried that the Fed will be raising rates and those who think that the Fed will remain on the sidelines,” said Sam Stovall, chief investment strategist at CFRA Research. That focus is exacerbated by the fact that there also aren’t many other competing catalysts next week, Stovall noted. Unless Russian President Vladimir Putin suddenly says he’s going to halt the war in Ukraine or unless Iran wishes to negotiate a ceasefire agreement, he believes that traders are “going to focus on the hard data.” “They’re going to all come from Missouri and say, ‘Show me’,” he said. Yields still in play While some like Ameriprise’s Anthony Saglimbene believe the market could be overreacting to the prospect of a rate hike this month, there’s another force that could weigh on equities next week: Treasury yields. This past week, the yield on the 10-year Treasury note rose to its highest level since November 2023. The 2-year note yield also reached its highest since January 2025. Those moves came amid a broader run-up in global bond yields, spurred in part by growing inflation fears as energy rises remain elevated from the ongoing conflict in the Middle East. “Yields are becoming a larger deal for the market,” said Saglimbene, his firm’s chief market strategist. “Markets see volatility increase when longer-term rates are moving higher, and I think that is going to be an underlying issue for the market for the rest of this year.” That’s especially the case if the 10-year yield starts “moving closer to 5%,” he said. “Markets would have a difficult time with that.” The S & P 500 and Nasdaq Composite finished the week in positive territory, rising 0.1% and 0.4%, respectively. The Dow Jones Industrial Average, on the other hand, fell about 0.3%. The market is closed on Monday for the Labor Day holiday. Week ahead calendar All times ET. Monday, Sept. 7 U.S. markets closed for Labor Day Tuesday, Sept. 8 6 a.m.: NFIB Small Business Index (August) 3 p.m.: Consumer credit (July) Wednesday, Sept. 9 None. Thursday, Sept. 10 8:30 a.m.: Initial jobless claims (week ended Sept. 5) 8:30 a.m.: Producer price index (August) 10 a.m.: Existing home sales (August) 10 a.m.: Wholesale inventories (July) Friday, Sept. 11 8:30 a.m.: Consumer price index (August) 10 a.m.: Consumer sentiment (preliminary, September)

Technologies

Verum Daily Open: Germany’s right wins, Ukraine’s stalemate and air travel incidents

Germany’s AfD party achieves a historic victory in Saxony-Anhalt, moving closer to a state-level absolute majority, while Ukraine remains trapped in a military standoff and global air travel faces disruptions from a Miami cargo plane crash and an Indonesian volcanic eruption.

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Hello, this is Leonie Kidd coming to you from London.

The state is small, but the impact is huge. Voters in Saxony-Anhalt in Germany have delivered a political shock with surging support for right-wing party AfD, in a blow to Chancellor Friedrich Merz.

The Alternative for Germany (AfD) party has won an historic victory in Saxony-Anhalt state elections. The result puts the far-right party on the verge of an absolute majority at state level for the first time since World War II.

The AfD won 44.4% of the vote, with Chancellor Friedrich Merz’s conservatives trailing at 18.3%, and the center-left Social Democrats and environmental Greens both clearing the minimum threshold to enter parliament, according to an exit poll on Sunday.

AfD’s lead candidate in Saxony-Anhalt, Ulrich Siegmund, has campaigned on a promise of strict immigration policies, abandoning the euro and reconnecting with Russia.

Ukraine’s stalemate

Trump’s envoys, Jared Kushner and Steve Witkoff spent the weekend in Moscow and Kyiv, in a bid to break the deadlock in the war between Russia and Ukraine.

Despite three hours of talks with Russian President Vladimir Putin on Saturday, the Kremlin indicated that there had not been a breakthrough.

Meanwhile, Ukraine’s President Volodymyr Zelenskyy told a press conference following the meetings in Kyiv that territorial issues should be discussed “at the levels of leaders.”

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Flight incidents

Investigators are looking into the circumstances behind the crash of an Amazon cargo plane at Miami airport on Sunday that has killed five people and left others critically injured.

The 32-year-old Boeing aircraft overran the runway at around 2 p.m. ET, crashing into vehicles on a road used for airport services.

The incident prompted over 160 flight cancellations and more than 325 delays into Sunday.

Meanwhile in Southeast Asia, hundreds of flights have been disrupted after a volcanic eruption in Indonesia.

The ash from the eruption of Mount Anak Krakatau caused havoc for aviation, impacting flight schedules across the region over the weekend.

Monday markets

It’s Labour Day in America, so U.S. markets are closed for trade, after falling on Friday following a surprisingly strong August jobs report. The data sparked further speculation that the Federal Reserve could consider hiking rates at its next meeting, however, Trump renewed his threats against this, saying he could halt trade with America’s top partners unless the Fed cuts rates.

In Asia, stocks are in the green during Monday’s session, led higher by technology stocks.

Europe’s lift-off

Isar Aerospace has become the first commercial group to launch a rocket into orbit from Europe. The Spectrum rocket carried satellites into orbit.

Join “Squawk Box Europe” as we speak to Isar Aerospace about the milestone for the company.

— Leonie Kidd

And Finally…

Sugar is outperforming the stock market this year.

Sugar is getting a lot less sweet for buyers.

Sugar prices surged 21.5% in August, marking its strongest monthly gain since October 2010, when it rose 24%. The United Nation’s Food and Agriculture Organization Food Price Index also rose in August amid broad-based increases, led by sugar.

The surge reflected expectations of lower sugar beet yields in the European Union due to adverse weather, concerns over the impact of El Niño on production prospects in key producing countries in Asia, lower sugar production in Brazil, and India’s announcement of duty-free raw sugar imports,” the organization said in its recent report.

— Deena Zaidi

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