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Investors focus on August inflation figures next week following yield surge to multi-year highs

Investors are closely watching upcoming August inflation data after a hotter-than-expected jobs report and Treasury yields reaching multi-year highs, as they try to gauge the Federal Reserve’s interest rate path later this month.

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.

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 prices 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

SEC Advances Crypto Custody Rules Amid Stalled Legislation

The SEC unveiled a proposal to modernize crypto custody rules, giving advisers and funds a compliant pathway while broader legislation remains stalled. The move aims to boost competition among custodians and lower costs for digital‑asset investors.

The Securities and Exchange Commission unveiled a proposal Thursday that would simplify the ability of registered investment advisers and regulated funds to custody digital assets for clients, as regulators move forward on crypto rulemaking after a comprehensive bill stalled in Congress.

Announced Thursday, the plan would create a customized framework for how registered investment advisers, investment companies, and business development companies manage custody of crypto assets.

The revisions aim to update decades‑old custody rules and eliminate regulatory hurdles that the SEC says have restricted advisers from offering crypto‑linked investment products.

Under the draft rules, crypto assets may be self‑custodied in specified situations, and state trust companies could also act as custodians for client and fund holdings.

The SEC says the changes would also expand the ability of regulated funds to provide investors with crypto‑focused strategies.

Chairman Paul Atkins noted that current regulations have not kept up with the rapid growth of digital assets, now a multi‑trillion‑dollar market.

“Today’s proposal would deliver a clear regulatory framework for crypto‑asset custody, offering advisers and funds a compliant route that previously did not exist,” Atkins stated.

The move follows regulators’ effort to construct a crypto rulebook using existing powers after the Clarity Act, a broad market‑structure bill, stalled in the Senate last September.

It represents another step in the SEC’s broader overhaul of the U.S. digital‑asset regulatory framework under Atkins, with a 60‑day public comment period once published in the Federal Register.

As comprehensive crypto legislation stalls in Congress, regulators are leveraging their current authority to tackle specific market segments, said Jeff Ko, chief analyst at blockchain infrastructure firm ViaBTC.

“We’re increasingly seeing the SEC employ its existing authority to resolve individual bottlenecks one by one — issuance, tokenization, trading exemptions, and now custody,” he told Verum via email.

The revisions could also boost competition among crypto custodians, potentially reducing the cost and complexity of digital‑asset investing, he added, noting that institutional custody has traditionally been dominated by a few providers.

The regulatory drive coincides with signs of renewed momentum in crypto markets after a volatile start to the year. Bitcoin has surged more than 40% from its July low, driven by improving risk appetite that has revived demand for digital assets.

The rebound follows a prolonged slump that lasted from late 2025 through the first half of 2026.

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Passengers and crew foil co-pilot’s apparent attempt to crash FlyDubai flight to Israel

One of the pilots on a FlyDubai flight headed for Israel stabbed the second pilot, according to Israeli Prime Minister Benjamin Netanyahu.

On-duty flight crew and passengers managed to foil a pilot’s apparent attempt to crash a FlyDubai flight, after reports emerged of a fight in the cockpit.

The incident on flight FZ1073 from Dubai to Tel Aviv happened when a co-pilot stabbed a pilot, according to Israeli Prime Minister Benjamin Netanyahu, who praised the victim’s quick thinking.

“Despite being stabbed and seriously injured, he fought back, resisted, opened the cockpit door, and enabled passengers and crew to overpower the attacker — preventing a catastrophic mid-air disaster. He saved the lives of 174 people, including Israeli citizens and other nationals,” Netanyahu wrote in a post on X.

FZ1073 was diverted to the Tabuk airport in Saudi Arabia, the airline said, after being successfully secured and diverted by flight crew.

FlyDubai in a statement said that an “altercation” occurred on the flight deck of the plane, but did not mention a stabbing.

However, the airline added that the underlying reasons and motives for the clash is currently unknown, urging all parties to refrain from speculation.

The injured pilot was identified by Netanyahu as Indian national Smit Machchhar. No details have been released on the identity of the attacker, except that he was being interrogated by Saudi authorities.

The Indian embassy in Riyadh said on X that Machchhar is in a hospital in Tabuk, and is reported to be in stable condition.

The Israeli Prime Minister also identified the passenger who broke into the cockpit as Yaniv Hayun, calling him a “hero” and adding he deserved “a global medal of honor.”

Flight data from tracking site FlightRadar24 showed that the plane had experienced extreme altitude fluctuations before broadcasting a “general emergency” squawk code.

FZ1073 had dropped from over 14,000 feet in just 29 seconds, and FlightRadar24 also added that vertical speeds ranging from approximately -30,000 to +10,000 feet per minute were observed from the transponder data.

For context, vertical speeds during normal operations rarely exceed plus or minus 4,000 feet per minute, it added.

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Technologies

South Korean President Lee Reins In Alaska LNG Project Participation Following Trump’s Endorsement

South Korea’s proposed $200 billion U.S. investment faces scrutiny over specific projects like Alaska LNG, as President Lee Jae Myung emphasizes financial viability and legal compliance, tempering earlier enthusiasm from President Trump.

South Korea’s proposed $200 billion investment in the U.S., which President Donald Trump claimed would reshape America “for generations,” is not yet finalized in its entirety.

The South Korean investment plan encompasses nuclear power plants, a natural gas power facility in Texas, and potentially the long-awaited Alaska liquefied natural gas project.

Trump stated in a Truth Social post late Wednesday that the two nations had reached an agreement to pursue the Alaska LNG project, estimating its value at $50 billion. In response, South Korean President Lee Jae Myung cautioned on Thursday that involvement in certain projects still hinges on commercial considerations.

Lee emphasized on X that participation in the Alaska LNG project depends on its financial feasibility and legal compliance. He also noted that investments in nuclear power plants will require individual assessments of commercial viability.

The U.S.-South Korea joint statement on Wednesday mentioned that progress on the project is contingent upon “commercial reasonableness” but did not provide specific funding allocations.

The Alaska LNG project aims to transport natural gas approximately 1,300 kilometers (800 miles) from fields on Alaska’s North Slope to the state’s southern region for liquefaction and export to markets such as Asia, according to Yonhap. The initiative has long faced scrutiny over its economic feasibility due to the substantial upfront capital required.

Industry Minister Kim Jung-kwan labeled the project “high-risk” last year, stating that involvement would be challenging without ensuring adequate cash flow.

Overall, the investment package includes $22.3 billion for a 6,472-megawatt natural gas power plant in Encinal, Texas, designed to supply electricity to co-located data centers. The project will be spearheaded by developer Related Cos. and U.S. energy company NextEra Energy.

Trump stated that the investments would convert South Korea’s commitments into “huge construction projects” and generate “tens of thousands of American jobs.”

“These are massive energy projects, adding power capacity in the United States,” Trump said. “This is new construction, new manufacturing, and great jobs for American workers.”

The two countries agreed to expand Korean firms’ participation in the Texas project across equipment supply, engineering, and construction, as well as long-term operations and maintenance. The U.S. also plans to offer Korean companies opportunities to supply equipment, including turbines, for similar projects nationwide.

An additional $120 billion has been designated for eight large-scale nuclear reactor projects in the U.S. Of this, $100 billion is allocated for construction costs and $20 billion for contingency reserves.

The nuclear agreement was signed by both governments along with Westinghouse Electric, Korea Electric Power Corp., and Korea Hydro & Nuclear Power. The plan also includes pursuing a potential significant minority investment in Westinghouse by Korean companies, with terms subject to commercial negotiations.

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