US stocks traded mixed with the S&P 500 and Nasdaq Comp. printing fresh record highs after cooler PPI - Newsquawk Asia-Pac Market Open

• US stocks traded mixed in which the S&P 500 and Nasdaq Comp. printed fresh record highs, but the DJIA and small-cap Russell 2000 lagged, while sectors were varied with outperformance seen in Utilities, Tech, and Energy, in which Tech names were largely boosted by Oracle (ORCL) after rallying post-earnings with a chunky RPO of USD 455bln as the large backlog of orders only emboldened the high demands for the AI market and helped support AI infrastructure names (semis and cloud providers). Nonetheless, the attention was on PPI data which printed softer-than-expected and spurred upside in treasuries and initially pressured the dollar as it helped ease the sticky inflation fears, amid a deteriorating labour market, although the attention now shifts to the incoming CPI report on Thursday.
• USD saw a bout of pressure following the PPI data which printed much cooler than expected across all metrics, although the DXY eventually recovered ahead of US CPI data on Thursday and with minimal change seen in money market pricing for next week's Fed meeting.
• Looking ahead, highlights include Japanese BSI Large Manufacturing & PPI, Australian MI Inflation Expectations, Supply from Australia.

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LOOKING AHEAD

• Highlights include Japanese BSI Large Manufacturing & PPI, Australian MI Inflation Expectations, Supply from Australia.
• Click for the Newsquawk Week Ahead.

US TRADE

• US stocks traded mixed in which the S&P 500 and Nasdaq Comp. printed fresh record highs, but the DJIA and small-cap Russell 2000 lagged, while sectors were varied with outperformance seen in Utilities, Tech, and Energy, in which Tech names were largely boosted by Oracle (ORCL) after rallying post-earnings with a chunky RPO of USD 455bln as the large backlog of orders only emboldened the high demands for the AI market and helped support AI infrastructure names (semis and cloud providers). Nonetheless, the attention was on PPI data which printed softer-than-expected and spurred upside in treasuries and initially pressured the dollar as it helped ease the sticky inflation fears, amid a deteriorating labour market, although the attention now shifts to the incoming CPI report on Thursday.
• SPX +0.31% at 6,533, NDX +0.04% at 23,849, DJI -0.48% at 45,491, RUT -0.25% at 2,376.
• Click here for a detailed summary.

TARIFFS/TRADE

• US is considering severe restrictions on medicines from China, according to NYT.
• Mexico's Economy Minister said a new tariff will be put on light vehicles and auto parts in which it is raising the tariff on cars from Asia, particularly from China, from 20% to 50%.

NOTABLE HEADLINES

• US President Trump posted "Just out: No Inflation!!! “Too Late” must lower the RATE, BIG, right now. Powell is a total disaster, who doesn’t have a clue!!!
• Majority of Senate Banking Committee voted to advance Fed nominee Stephen Miran.
• US House Democrat Leader opposes a clean stopgap spending bill.
• US Office of the Inspector General initiated a review of BLS data challenges in which the focus will be on PPI, CPI, collection and employment revisions, according to Bloomberg.

DATA RECAP

• US PPI Final Demand YY (Aug) 2.6% vs. Exp. 3.3% (Prev. 3.3%)
• US PPI exFood/Energy YY (Aug) 2.8% vs. Exp. 3.5% (Prev. 3.7%)
• Atlanta Fed GDPnow (Q3) 3.1% (prev. 3.0%)

FX

• USD saw a bout of pressure following the PPI data which printed much cooler than expected across all metrics, although the DXY eventually recovered ahead of US CPI data on Thursday and with minimal change seen in money market pricing for next week's Fed meeting.
• EUR marginally softened on the day and just about dipped back beneath the 1.1700 handle ahead of tomorrow's ECB meeting.
• GBP was ultimately flat on the day after failing to sustain initial gains and amid little fresh pertinent catalysts
• JPY lacked firm conviction amid the non-committal mood across the FX space and as Japanese PPI data looms.

FIXED INCOME

• T-notes caught a bid following soft PPI data and a strong auction ahead of Thursday's CPI data.

COMMODITIES

• Oil prices were firmer following recent geopolitical developments in the Middle East and regarding Russia, Ukraine and Poland, with upside seen after US President Trump posted "What’s with Russia violating Poland’s airspace with drones? Here we go!".
• US EIA Weekly Crude Stocks w/e 3.939M vs. Exp. -1.04M (Prev. 2.415M).
• Russia has revised up oil exports from western ports by 11% to 2.1mln bpd for September amid drone attacks on refineries, according to Reuters citing sources.

GEOPOLITICAL

MIDDLE EAST

• Israel conducted a strike on Yemen's Sanaa which targeted the Houthi Ministry of Defence, according to Reuters citing sources.
• Israeli PM Netanyahu reportedly officially threatened Turkey with a military attack, according to Tasnim News on X citing Israeli media.
• Qatari PM said Israeli PM Netanyahu is leading the Middle East to chaos and has been wasting Qatar's time by engaging in mediation, while he added the entire Gulf region is at risk and Qatar is reassessing everything about its mediating role and Hamas's future in Qatar. Furthermore, he said Qatari officers injured in the Israeli attack are in critical condition, and there will be a response that is under discussion with partners in the region to the attack in Doha.

RUSSIA-UKRAINE

• Ukrainian President Zelensky said he spoke with European Commission President von der Leyen and discussed work with the US on Russian sanctions.
• Polish PM Tusk said Poland asked to invoke Article 4 of the NATO treaty, while he added there is no reason to claim that Poland is in a state of war and stated they are in a situation closest to armed conflict since WW2. It was also reported that Tusk said he has received offers of support regarding air defence after speaking with European allies.
• US President Trump posted on Truth "What’s with Russia violating Poland’s airspace with drones? Here we go!"
• Russia's Foreign Minister said they are ready to join possible consultations between the Russian Defence Ministry and Poland.
• Russian Charge d'Affaires said drones shot down in Poland came from Ukraine.
• EU is reportedly considering listing some independent Chinese refineries within the 19th sanctions package on Russia, according to Reuters citing sources.
• EU is reportedly very unlikely to impose crippling tariffs on India or China, the main buyers of Russian oil, as US President Trump urged the bloc to do so, according to Reuters citing EU sources who added that the EU treats tariffs in a different way to sanctions and only imposes them after an investigation that usually lasts months to establish a legally sound justification. Furthermore, an EU diplomat said there are no talks so far on possible tariffs on India or China, while another EU source said such tariffs were risky and could be too broad, as well as noted it was easier to sanction specific entities and open the door to delist them if they ended their business with Russia.

ASIA-PAC

NOTABLE HEADLINES

• China NDRC head said China plans to implement more proactive fiscal policy and moderately loose monetary policy to stimulate market activity and boost consumption, while he added that they should stimulate market vitality and boost consumption. China will also promote capacity management in key industries and continue improving the policy toolbox.
• South Korea's Foreign Minister proposed working group with the US to discuss a new US visa category for South Korean workers.

EU/UK

NOTABLE HEADLINES

• French PM Lecornu said the government will need to be creative and talk with opposition parties and there will need to be a change in policy as well.