[BRIEFING.COM] The major averages remain little changed from previous levels.

Aon (AON 330.29, -25.11, -7.07%) is trading lower after agreeing to acquire USI Insurance Services for $17.0 billion in cash, further expanding its U.S. middle-market platform following its acquisition of NFP in 2024. While the strategic fit is clear, investors appear more focused on the size and financing of the deal. Aon plans to fund the transaction with new debt and prioritize deleveraging, and does not expect near-term share repurchases, while adjusted EPS accretion is not expected until 2028.

Take-Two (TTWO 219.19, -16.20, -6.88%) holds a similar loss, adding pressure to the communication services sector (-1.8%) as the stock retreats following video leaks of its upcoming Grand Theft Auto 6 game.

[BRIEFING.COM] The S&P 500 (-0.6%), Nasdaq Composite (-0.5%), and DJIA (-0.8%) are furthering their open retreat as stocks remain mostly lower.

Eli Lilly (LLY 1152.04, -22.56, -1.92%) is firmly lower despite agreeing to acquire Merida Biosciences for up to $2.875 billion in cash and reporting encouraging one-year Phase 3b data for Taltz used with Zepbound in patients with psoriatic disease and obesity. The muted reaction suggests investors view the precision-immunology platform and combination results as potentially valuable long-term opportunities rather than immediate earnings catalysts, particularly because MER511 remains in Phase 1, the acquisition's upfront payment is undisclosed, and the Week 52 analyses were exploratory.

Eli Lilly's loss weighs on the health care sector (-0.7%), which trades broadly lower today and includes several names that have also contributed to the DJIA's underperformance so far. However, the sector is actually one of the best-performing S&P 500 sectors this morning as losses are even wider elsewhere.

[BRIEFING.COM] The S&P 500 (-0.5%), Nasdaq Composite (-0.4%), and DJIA (-0.6%) are moving lower this morning as the increase in oil prices puts broad pressure on the market.

Crude oil is currently up $2.19 (+2.6%) to $86.51 per barrel following the latest hostilities between the U.S. and Iran, even as President Trump also said the U.S. has secured majority control of more than 65 billion barrels of proven oil reserves in Venezuela. The energy sector (+2.0%) is a standout as a result, while the information technology sector (flat) is the only other S&P 500 sector to avoid negative territory, supported by a decent early showing from Semiconductor stocks.

Meanwhile, several sectors trade sharply lower. The utilities sector (-1.7%) holds the widest loss as Edison (EIX 56.35, -13.82, -19.70%) and PG&E (PCG 13.44, -3.16, -19.07%) face outsized declines following negative analyst commentary related to last week's developments surrounding California wildfire legislation, which is expected to result in return-on-equity cuts for power companies. The communication service sector (-1.6%) is down similarly, as Alphabet (GOOG 335.64, -7.24, -2.11%) is a mega-cap laggard amid a weak start for the market's largest names.

Futures remain lower before the open as escalating U.S.-Iran hostilities and higher oil prices set the tone in thinner pre-holiday conditions. In addition to reports that the U.S. struck Iranian launchers preparing to fire mines in the Strait of Hormuz, and Iran retaliated with missiles aimed at a U.S. base in Jordan, Reuters reports that Secretary Bessent also expects new secondary sanctions on Iran every week.

Several notable acquisitions have been announced this morning, with SLB (SLB 58.41, +1.08, +1.88%) agreeing to acquire Kelvion from Apollo (APO 134.29, -0.75, -0.56%) funds for $4.1 billion, while Eli Lilly (LLY 1172.78, -0.08, -0.01%) agreed to acquire Merida Biosciences for up to $2.875 billion in cash.

S&P 500 futures point to a modestly lower open after mixed trade in Asia and Europe.

Equity indices in the Asia-Pacific region began the week on a mixed note. China's Manufacturing (49.8) and Non-Manufacturing (49.0) PMI readings remained in contractionary territory in August. The approval rating of Japan Prime Minister Takaichi's cabinet remained at 53%, according to the latest poll from Asahi. India and Brazil are looking to increase their bilateral trade to $30 bln by 20230. The Reserve Bank of New Zealand will release its latest policy Statement on Wednesday, which could call for a rate hike.

• In economic data:
  • China's August Manufacturing PMI increased to 49.8 (expected 49.5; last 49.2).
  • China's August Non-Manufacturing PMI was unchanged at 49.0 (expected 49.5; last 49.0).
  • Japan's July Retail Sales increased 4.0% yr/yr (expected 3.2%; last 0.6%).
  • Japan's July Housing Starts increased 8.2% yr/yr (expected 7.2%; last 18.6%).
  • Japan's July Construction Orders decreased 13.4% yr/yr (last 2.3%).
  • South Korea's July Retail Sales decreased 2.4% m/m (last 2.7%).
  • South Korea's July Service Sector Output decreased 1.3% m/m (last 0.7%).
  • South Korea's July Industrial Production increased 0.2% m/m (last 6.7%) and 3.6% yr/yr (last 6.0%).
  • Hong Kong's July Retail Sales increased 4.5% yr/yr (last 4.6%).
  • Australia's Q2 Company Gross Operating Profits increased 1.8% qtr/qtr (expected 2.0%; last -1.5%).
  • Australia's Q2 Pre-tax Profits increased 12.5% qtr/qtr (last -4.1%).
  • Australia's July Private Sector Credit increased 0.6% m/m (expected 0.7%; last 0.8%).
  • Australia's July Housing Credit increased 0.5% m/m (last 0.6%).
  • Australia's August MI Inflation Gauge increased 0.5% m/m (last 1.0%).
  • New Zealand's August ANZ Business Confidence decreased to 53.7 (last 56.1).
  • India's Q1 GDP increased 7.8% yr/yr (expected 7.1%; last 7.8%).

---Equity Markets---

• Japan's Nikkei: -0.1%
• Hong Kong's Hang Seng: -0.1%
• China's Shanghai Composite: +0.9%
• India's Sensex: -0.4%
• South Korea's Kospi: +0.5%
• Australia's ASX All Ordinaries: -0.3%

Major European indices are mixed while the U.K.'s FTSE is closed for a Bank Holiday. Germany's flash CPI for August will be released at 8:00 ET and it is expected to show a month-over-month increase of 0.3% with the year-over-year rate accelerating to 3.0% from 2.8%. Iceland voted against reopening accession talks with the European Union. Fitch affirmed France's A+ rating with a Stable outlook.

• In economic data:
  • Spain's June current account surplus widened to EUR2.41 bln from EUR1.84 bln.

---Equity Markets---

• STOXX Europe 600: -0.1%
• Germany's DAX: -0.7%
• France's CAC 40: +0.2%
• Italy's FTSE MIB: +0.4%
• Spain's IBEX 35: +0.2%

S&P 500 futures remain modestly lower, currently trading 34 points below fair value. 

On the mergers and acquisitions front, AON (AON 351.95, -3.49, -1.0%) has agreed to acquire USI Insurance from KKR (KKR 108.68, +0.02, +0.0%) for $17 billion. The deal adds the No. 10 U.S. insurance broker, with roughly $3 billion in annual revenue and more than 10,500 employees, as AON looks to expand its U.S. middle-market platform and increase its exposure to the fast-growing excess and surplus insurance segment.

Equity futures are pointing to a modestly lower open as investors monitor the latest geopolitical developments amid a fairly quiet morning of corporate news.

Crude oil is moving higher this morning following an uptick in hostilities between the U.S. and Iran, with Axios reporting that the U.S. struck launchers that were preparing to deploy mines in the Strait of Hormuz. Iran fired missiles at a U.S. base in Jordan in retaliation, and crude oil is currently up $2.97 (+3.6%) to $86.39 per barrel.

Stocks are coming off a winning week, with the major averages supported by strength in technology stocks after NVIDIA (NVDA 218.76, +1.21, +0.6%) and a host of software names delivered impressive earnings.

There are no U.S. economic releases scheduled today. However, the August Employment Report looms on Friday, with the market eager to see whether the data will once again reshape monetary policy expectations following Fed Chair Kevin Warsh's somewhat hawkish tone at last week's Jackson Hole Symposium.

In corporate news:

• President Trump to discuss high fuel prices with oil refiners this week, according to Bloomberg. 
• Science Applications (SAIC 136.77, +10.81, +8.58%) beat fiscal second-quarter earnings and revenue expectations and raised its fiscal 2027 guidance.
• GDEV (GDEV 11.56, +0.69, +6.35%) launched a cash self-tender offer for up to $20 million of its ordinary shares.
• IperionX (IPX 21.93, +0.92, +4.38%) received a second U.S. Army task order under its existing contract supporting domestic titanium production.

Reviewing overnight developments:

Asia-Pacific markets ended the session mixed as China's August business surveys remained in contraction territory. Japan's Nikkei: -0.1%, Hong Kong's Hang Seng: -0.1%, China's Shanghai Composite: +0.9%, India's Sensex: -0.4%, South Korea's Kospi: +0.5%, Australia's ASX All Ordinaries: -0.3%.

In news:

• The Reserve Bank of New Zealand will release its latest policy statement on Wednesday.
• The approval rating of Japan Prime Minister Takaichi's cabinet remained at 53%, according to an Asahi poll.

In economic data:

• China's August Manufacturing PMI 49.8 (expected 49.5; last 49.2) and Non-Manufacturing PMI 49.0 (expected 49.5; last 49.0)
• Japan's July Retail Sales 4.0% yr/yr (expected 3.2%; last 0.6%). July Housing Starts 8.2% yr/yr (expected 7.2%; last 18.6%) and Construction Orders -13.4% yr/yr (last 2.3%)
• South Korea's July Retail Sales -2.4% m/m (last 2.7%) and July Service Sector Output -1.3% m/m (last 0.7%). July Industrial Production 0.2% m/m (last 6.7%); 3.6% yr/yr (last 6.0%)
• Hong Kong's July Retail Sales 4.5% yr/yr (last 4.6%)
• Australia's Q2 Company Gross Operating Profits 1.8% qtr/qtr (expected 2.0%: last -1.5%) and Pre-tax Profits 12.5% qtr/qtr (last -4.1%). July Private Sector Credit 0.6% m/m (expected 0.7%; last 0.8%) and Housing Credit 0.5% m/m (last 0.6%). August MI Inflation Gauge 0.5% m/m (last 1.0%)
• New Zealand's August ANZ Business Confidence 53.7 (last 56.1)
• India's Q1 GDP 7.8% yr/yr (expected 7.1%; last 7.8%)

Major European markets are mixed while the U.K. market is closed for a bank holiday. STOXX Europe 600: -0.1%, Germany's DAX: -0.7%, France's CAC 40: +0.2%, Italy's FTSE MIB: +0.4%, Spain's IBEX 35: +0.2%.

In news:

• Fitch affirmed France's A+ rating with a stable outlook.
• Iceland voted against reopening accession talks with the European Union.

In economic data:

• Spain's June Current Account surplus EUR2.41 bln (last surplus of EUR1.84 bln)

[BRIEFING.COM] The major averages finished a choppy Friday modestly lower, with the S&P 500 (-0.3%) and Nasdaq Composite (-0.5%) declining while the DJIA ended near its flatline. The market saw relatively little movement during the afternoon after an eventful morning shaped by Fed Chair Kevin Warsh's Jackson Hole address, rising Treasury yields, and a sharp retreat in semiconductor stocks. Despite today's losses, all three major averages secured gains for the week.

Warsh's remarks were the main driver of the session. The Fed Chair emphasized that inflation remains above the central bank's 2% target and said price stability should be its predominant focus at this point. His comments prompted a significant repricing of near-term policy expectations, with the probability of a 25-basis-point rate hike at the September FOMC meeting rising sharply to 57.5% from 35.4% yesterday.

Treasury yields climbed in response, with the pressure particularly pronounced at the shorter end of the curve. The move weighed more heavily on smaller stocks, leaving the Russell 2000 (-1.4%) and S&P Mid Cap 400 (-1.2%) with considerably wider losses than the major averages.

The major averages initially took the hawkish policy shift in stride, rallying to session highs during the morning behind strength in non-semiconductor mega-cap stocks. Those gains moderated as the session progressed, but remained enough to lift the consumer discretionary (+1.7%) and communication services (+1.6%) sectors to the top of the sector standings behind solid gains in Amazon (AMZN 266.43, +10.17, +3.97%) and Alphabet (GOOG 342.88, +5.17, +1.53%) .

Apple (AAPL 319.70, +5.12, +1.63%) and Microsoft (MSFT 513.53, +8.47, +1.68%) also advanced, providing some support for the major averages despite weakness elsewhere in the information technology sector (-1.3%).

Semiconductor stocks were the largest source of pressure, sending the PHLX Semiconductor Index down 3.5%. NVIDIA (NVDA 217.48, -10.50, -4.61%) gave back a sizable portion of yesterday's post-earnings surge, while Marvell (MRVL 216.62, -24.83, -10.28%) was a notable laggard following its quarterly report.

Software stocks also surrendered some of yesterday's earnings-driven gains, although the selling was considerably less pronounced. The iShares Expanded Tech-Software Sector ETF declined 0.7%, with Workday (WDAY 204.72, +11.15, +5.76%) standing out on the upside following its earnings report.

Six S&P 500 sectors ultimately finished lower. In addition to the information technology sector, the utilities (-1.1%) and industrials (-1.0%) sectors were among the main laggards.

While the financial sector (+0.3%) notched a modest gain, PayPal (PYPL 53.66, -7.81, -12.71%) finished as the worst-performing S&P 500 component after Bloomberg reported that the Advent/Stripe consortium abandoned its planned leveraged buyout valued at more than $50 billion, although the companies could resume discussions at a later date.

Ultimately, Fed Chair Warsh's Jackson Hole address set the tone for Friday's session, driving a hawkish repricing of September policy expectations and pushing Treasury yields higher, particularly at the shorter end of the curve. Strength in several non-semiconductor mega-cap stocks helped limit the damage at the headline-index level, but weakness in semiconductors and smaller stocks left the broader market under pressure. Even so, the major averages held onto enough of their earlier weekly gains to finish the week in positive territory.

U.S. Treasuries had a rough finish to the week with yields on 3-year and 5-year note yields hitting fresh highs for the year while the long bond outperformed but could not secure a higher finish. The 2-year note yield settled up 12 basis points to 4.35% (+12 basis points this week), and the 10-year note yield settled up five bais points to 4.72% (-2 basis points this week). 

• Russell 2000: +19.8% YTD
• S&P Mid Cap 400: +14.4% YTD
• Nasdaq Composite: +13.6% YTD
• S&P 500: +12.7% YTD
• DJIA: +11.4% YTD

Reviewing today's data:

• August Chicago PMI 47.1 (Briefing.com consensus 57.0); Prior 57.6
• August Univ. of Michigan Consumer Sentiment - Final 51.7 (Briefing.com consensus 51.0); Prior 51.0
  • The key takeaway from the report is that persistent inflation concerns are undercutting consumer sentiment.