[BRIEFING.COM] The S&P 500 (-0.2%), Nasdaq Composite (-0.5%), and DJIA (-0.2%) are off their worst levels of the session as crude oil prices retreat from earlier highs.

President Trump said via Truth Social that the U.S. is having productive discussions with the Islamic Republic of Iran, and that we will not be attacking Iran at any time prior to the midterm elections on November 3. Crude oil is now up $2.79 (+3.2%) to $91.08 per barrel, and the 10-year note yield is unchanged at 5.27%.

[BRIEFING.COM] The major averages are trading at their session lows at midday, with the S&P 500 (-0.4%) facing losses across nine sectors. The health care sector (-2.0%) is the weakest performer by a wide margin, pressured by concerns that elevated Treasury yields could increase research and development funding costs, particularly for biotechnology companies.

The SPDR S&P Biotech ETF (XBI) is down 2.7%, reaching its lowest level since early August and extending its week-to-date decline to 5.4%. Heavyweights Eli Lilly (LLY 1137.17, -51.55, -4.34%) and Johnson & Johnson (JNJ 253.06, -5.39, -2.09%) are also notable laggards following yesterday's strength in the sector. Some medical device manufacturers and insurers are showing relative strength, but their gains have done little to offset the broader weakness.

[BRIEFING.COM] The S&P 500 (-0.4%), Nasdaq Composite (-0.6%), and DJIA (-0.5%) are near session lows just before midday as tech stocks lag while upward pressure on oil prices and Treasury yields weighs on the broader market.

Selling pressure is relatively broad this morning, with decliners outpacing advancers by more than 2-to-1 on both the NYSE and Nasdaq. Eight S&P 500 sectors trade lower, although the health care sector (-1.7%) is the only one down more than 1.0% following yesterday's rally. The information technology sector (-0.5%) is also under pressure, with the PHLX Semiconductor Index down 1.3%.

The energy sector (+2.8%) is the clear standout as WTI crude surges $4.70 (+5.3%) to $92.98 per barrel amid escalating attacks on tankers in the Strait of Hormuz and President Trump's comments suggesting that a deal with Iran is not a priority.

The consumer staples sector (+1.5%) also outperforms as investors favor defensive stocks.

Meanwhile, Treasury yields have been volatile, with the 10-year note yield back up three basis points to 5.30%, adding to pressure on smaller companies as the Russell 2000 trades down 1.0%.

[BRIEFING.COM] The major averages are back near their opening lows, though the losses are relatively modest in nature.

PepsiCo (PEP 125.84, +2.11, +1.71%) is modestly higher following a mixed Q3 earnings report that featured better-than-expected earnings and revenue, but also a reduction in its FY26 outlook. Core EPS of $2.34 and revenue growth of 5.6% to $25.27 billion both exceeded expectations, while the company lowered its FY26 core EPS growth forecast to 2.5--3.5% from the low end of its prior 5--7% outlook, reflecting a slower-than-anticipated recovery in North America.

The modest gain may reflect some relief over sequential improvement in North American demand, particularly with shares entering the report near 52-week lows. However, profitability remains under pressure, and the reduced outlook highlights the challenges still facing the company's turnaround. PepsiCo is not a component of the S&P 500 or DJIA, but peer Coca-Cola (KO 87.00, +1.18, +1.37%), which is included in both indexes, is posting a solid gain amid broad strength in the consumer staples sector (+1.5%).

[BRIEFING.COM] The S&P 500 (-0.1%), Nasdaq Composite (-0.2%), and DJIA (-0.1%) sit just below their baselines, with a notable improvement in semiconductor stocks helping the Nasdaq catch up to its peers.

The PHLX Semiconductor Index is now down just 0.8%, helping the information technology sector (+0.2%) move within striking distance of its unchanged level.

Meanwhile, Chipotle Mexican Grill (CMG 32.16, +1.39, +4.52%) is now one of the best-performing S&P 500 components after the Financial Times reported that Starbucks (SBUX 90.36, -3.22, -3.44%) has explored a takeover of Chipotle. The potential deal would be the largest restaurant takeover in history.

[BRIEFING.COM] The S&P 500 (-0.2%), Nasdaq Composite (-0.5%), and DJIA (unch) are mostly lower this morning as higher oil prices and weakness in technology stocks weigh on the market.

Crude oil is up $3.89 (+4.4%) to $92.18 per barrel amid increased attacks on tankers in the Strait of Hormuz and commentary from President Trump that suggests the potential for further conflict.

While oil remains firmly higher, Treasury yields have retreated considerably from their overnight highs, with the 10-year note yield now up just one basis point to 5.28% after climbing as high as 5.35%.

That has allowed for some modest improvement through the broader market, which has the DJIA back on its flatline.

Five S&P 500 sectors trade higher, with the energy sector (+2.2%) sharply higher as oil prices surge. APA Corp. (APA 45.56, +1.74, +3.98%) is an S&P 500 standout while Chevron (CVX 210.96, +5.81, +2.83%) leads all Dow names.

The consumer staples sector (+1.3%) is another outperformer, trading broadly higher as high-beta and tech stocks retreat amid a more risk-off positioning this morning.

The information technology sector (-0.8%) is a laggard as a result, weighed down by a 2.1% slide in the PHLX Semiconductor Index.

Just released wholesale inventories increased by 0.5% in August (Briefing.com consensus 0.7%) from an upwardly revised prior increase of 1.4% (from 1.3%).

Equity futures continue to point to a firmly lower open this morning, with oil prices and Treasury yields putting renewed pressure on stocks after yesterday's retreat

For the week ending October 3, initial claims decreased 2,000 to 197,000 (Brieifng.com consensus: 200,000). Continuing claims for the week ending September 26 were up 17,000 to 1.716 million.

The key takeaway from the report is a broken (but pleasant-sounding) record: layoff activity continues to run at low levels that reflect a solid demand environment.

The S&P 500 futures currently trade 34 points below fair value.

Asian markets finished sharply lower on Thursday, extending Wednesday's risk-off tone as the Fed's hawkish message added to pressure from elevated oil prices and Treasury yields. Japan's Nikkei 225 fell 1.4% for a second consecutive decline, with Taiyo Yuden (-4%), SoftBank Group (-4%), and Mitsubishi UFJ (-3%) among the notable laggards, while investors also weighed the prospect of further BOJ tightening. China's Shanghai Composite dropped 0.8% to a more than two-month low in its return from the National Day holiday, while the Shenzhen Component tumbled 2.1%, with Foxconn Industrial Internet (-4%), Zhongji Innolight (-3%), China Life Insurance (-2%), and CATL (-2%) among the leading decliners. Attention in China now turns to next week's inflation and trade data following Beijing's recently announced stimulus measures. Hong Kong's Hang Seng Index fell 1.4%, with Lenovo (-8%), SMIC (-7%), Kingboard Laminates (-6%), Genscript Biotech (-5%), and Tencent (-2%) leading the selloff as September private-sector PMI slipped to 49.2 from 49.5, marking a second consecutive month of contraction. Elsewhere, Australian inflation expectations increased to 5.3% in October from 4.9%, while Japan's August current account surplus exceeded expectations.

• In economic data:
  • Japan's August current account surplus totaled JPY4.062 trln (expected JPY3.194 trln; prior JPY2.989 trln), while the adjusted surplus reached JPY2.98 trln (expected JPY2.14 trln; prior JPY2.52 trln).
  • Japan's September Economy Watchers Current Index increased to 47.0 (expected 46.7; prior 46.4).
  • Hong Kong's September S&P Global PMI slipped to 49.2 from 49.5, marking a second consecutive month of contraction.
  • Australia's October MI Inflation Expectations increased to 5.3% from 4.9%.
  • South Korea's August current account surplus widened to $46.11 bln from $42.08 bln.

European markets extend their losses, with rising oil prices and a renewed bond selloff adding to inflation and interest-rate concerns following hawkish Fed minutes. Germany's DAX falls 1.0% to its lowest level since July, with Infineon (-3%) and Deutsche Bank (-2%) among the laggards, while exports declined 0.8% m/m in August amid continued weakness in external demand. France's CAC 40 loses 0.9% to its lowest level since March, with BNP Paribas (-2%), Socit Gnrale (-3%), Airbus (-2%), and Safran (-2%) retreating as fiscal concerns compound the broader risk-off tone. London's FTSE 100 declines 0.4% to its lowest level since June, although Tesco (+3%) outperforms after raising its full-year guidance and increasing its share buyback following a 6% increase in first-half adjusted operating profit. Middle East tensions remain in focus amid reports that the White House requested options for potential strikes on Iran, helping lift Brent crude to a two-week high and adding to pressure on global bond markets. The broader STOXX Europe 600 falls 1.0%, while Italy's FTSE MIB (-1.4%) and Spain's IBEX 35 (-1.2%) also trade firmly lower.

• In economic data:
  • Germany's August trade surplus narrowed to EUR19.5 bln (expected EUR19.0 bln; prior EUR21.6 bln).
  • Germany's August exports decreased 0.8% m/m (expected 0.8%; prior -0.5%).
  • Germany's August imports increased 0.9% m/m (expected 2.8%; prior -5.5%).
  • Germany's September car registrations increased 9.0% yr/yr (prior 2.6%).

The S&P 500 futures currently trade 36 points below fair value. 

Just released, for the week ending October 3, initial jobless claims decreased by 2,000 to 197,000 (Briefing.com consensus: 200,000), from the upwardly revised previous level of 199,000 (from 197,000)

Continuing jobless claims for the week ending September 26 increased by 17,000 to 1.716 million from the downwardly revised prior level of 1.699 million (from 1.701 million).

Equity futures point to a firmly lower open this morning amid renewed upward pressure on Treasury yields and oil prices. Crude oil is currently up $3.95 (+4.5%) to $92.22 per barrel amid reports that tanker traffic through the Strait of Hormuz has been reduced significantly as Iran increases attacks. Additionally, President Trump has signaled in recent interviews that he does not necessarily want to reach a deal with Iran and is considering a massive bombing campaign against the country.

The 10-year note yield is currently up five basis points to 5.33%, reversing much of yesterday's afternoon retreat following a strong 10-year note reopening. Stocks recovered substantially from their morning lows yesterday as yields eased, although the rebound was concentrated in mega-cap and technology stocks while smaller companies and other rate-sensitive areas remained under considerable pressure.

The renewed rise in oil prices and Treasury yields threatens to undermine that recovery, with higher energy costs adding to inflation concerns and elevated borrowing costs continuing to weigh on the broader market.

Initial and continuing jobless claims are due at 8:30 ET, followed by August wholesale inventories at 10:00 ET.

Today's remaining economic calendar:

• 8:30 AM ET: 10/03 Initial Claims; Briefing.com consensus 200K; prior 197K
• 8:30 AM ET: 09/26 Continuing Claims; prior 1701K
• 10:00 AM ET: August Wholesale Inventories; Briefing.com consensus 0.7%; prior 1.3%
• 10:30 AM ET: 10/03 EIA Natural Gas Inventories; prior +64 bcf

In corporate news:

• Broadcom (AVGO 370.63, -5.88, -1.6%) is seeking $50 billion in financing for OpenAI's custom chips, according to The Wall Street Journal,
• PepsiCo (PEP 126.45, +2.72, +2.20%) topped third-quarter earnings and revenue expectations. Its fiscal 2026 EPS outlook was below consensus, while its revenue guidance was above consensus.
• Taiwan Semiconductor Manufacturing (TSM 465.04, -7.16, -1.52%) reported that September revenue increased 54.6% from a year ago and decreased 0.6% from August.

Reviewing overnight developments:

According to Nikkei, Asian markets finished broadly lower as investors considered the Fed's hawkish message, elevated oil prices and Treasury yields, and the prospect of further Bank of Japan tightening.

In news:

• Mainland Chinese markets reopened after the National Day holiday, with attention turning to next week's inflation and trade data following Beijing's recently announced stimulus measures.

In economic data:

• Japan's August Current Account JPY4.062 trln (expected JPY3.194 trln; prior JPY2.989 trln) and Adjusted Current Account JPY2.98 trln (expected JPY2.14 trln; prior JPY2.52 trln); September Economy Watchers Current Index 47.0 (expected 46.7; prior 46.4)
• Hong Kong's September S&P Global PMI 49.2 (prior 49.5)
• Australia's October MI Inflation Expectations 5.3% (prior 4.9%)
• South Korea's August Current Account $46.11 bln (prior $42.08 bln)

Equity Markets:

• Japan's Nikkei: -1.4%
• Hong Kong's Hang Seng: -1.4%
• China's Shanghai Composite: -0.8%
• India's Sensex: -1.4%
• South Korea's Kospi: -2.6%
• Australia's All Ordinaries: -0.8%

European markets are broadly lower amid rising oil prices, renewed selling in sovereign bonds, and persistent inflation and interest-rate concerns.

In news:

• Middle East tensions remain in focus following reports that the White House requested options for potential strikes on Iran.
• Tesco raised its full-year guidance and increased its share repurchase plan after reporting higher first-half adjusted operating profit.

In economic data:

• Germany's August Trade Balance EUR19.5 bln (expected EUR19.0 bln; prior EUR21.6 bln); Exports -0.8% m/m (expected 0.8%; prior -0.5%) and Imports 0.9% m/m (expected 2.8%; prior -5.5%); September Car Registrations 9.0% yr/yr (prior 2.6%)

Equity Markets:

• STOXX Europe 600 : -1.0%
• Germany's DAX : -1.0%
• U.K.'s FTSE 100 : -0.4%
• France's CAC 40 : -0.9%
• Italy's FTSE MIB : -1.4%
• Spain's IBEX 35 : -1.2%

[BRIEFING.COM] Wednesday's session ended with modest losses for the major averages, but the relatively mild declines at the index level understated considerably weaker performance across the broader market. The S&P 500 (-0.2%) and Nasdaq Composite (-0.2%) finished near their best levels of the day after recovering from much steeper morning losses, while the DJIA (-0.7%) remained a notable laggard.

The recovery was concentrated largely among mega-cap and technology stocks and accelerated as Treasury yields retreated from their morning highs. The 10-year note yield climbed as high as 5.36% before a strong $39 billion 10-year note reopening helped spark a rebound across the Treasury market. Stocks responded favorably, although the improvement did not spread meaningfully to many of the areas that had been hit hardest by elevated borrowing costs.

That divergence was evident in the Russell 2000 (-1.3%) and S&P Mid Cap 400 (-1.6%), which remained near their session lows despite the recovery in the major averages. Rate-sensitive pockets of the market also stayed under pressure, leaving the iShares U.S. Home Construction ETF down 2.6%.

The industrials sector (-2.1%) was the day's weakest performer, pressured by steep losses among several recent winners tied to the AI-infrastructure trade. Caterpillar (CAT 813.72, -49.72, -5.76%) was among the S&P 500's biggest decliners, with the stock also facing company-specific pressure after the FTC and USDA sought public comment on agricultural equipment manufacturing and distribution market practices.

The materials sector (-1.5%) and real estate sector (-1.3%) were also notable laggards. Gold and silver settled lower as elevated Treasury yields and a stronger dollar weighed on precious metals, pressuring Newmont Corporation (NEM 113.55, -2.84, -2.44%) and other mining-related names.

Meanwhile, the improvement in mega-cap and technology stocks helped the information technology sector narrow its decline to just 0.1%, while the Vanguard Mega Cap Growth ETF finished down 0.2%. Apple (AAPL 336.67, +3.04, +0.91%) posted a solid gain, and the PHLX Semiconductor Index recovered from a much steeper morning decline to finish down 1.2%. Memory names Micron (MU 1088.00, +42.44, +4.06%) and Sandisk (SNDK 1692.42, +31.96, +1.92%) bucked the broader semiconductor weakness with gains.

The consumer discretionary sector (+0.2%) also reversed an earlier loss as Amazon (AMZN 259.92, +3.63, +1.42%) emerged as a mega-cap standout, while the communication services sector finished flat.

SpaceX (SPCX 167.66, -4.26, -2.48%) remained under pressure after the Financial Times reported that the company is seeking $40 billion in financing to purchase NVIDIA (NVDA 237.36, -1.88, -0.79%) AI chips, including roughly $10 billion in bank loans and $30 billion in investment-grade debt.

Defensive areas provided support throughout the session. The health care sector (+1.1%) led the market, with Eli Lilly (LLY 1188.60, +31.11, +2.69%) and Moderna (MRNA 196.48, +9.02, +4.81%) among the notable gainers. The consumer staples sector (+0.1%) also attracted some defensive interest, with Constellation Brands (STZ 118.39, +2.72, +2.35%) advancing following its earnings report.

The market had a muted response to the release of the September FOMC minutes, which showed that most policymakers see a high likelihood of another rate hike by year-end. That view was largely consistent with existing market expectations for another 25-basis-point increase before the end of the year.

Ultimately, the afternoon recovery softened the losses for the S&P 500 and Nasdaq, but it did little to change the day's weaker underlying picture. The retreat in Treasury yields provided relief for mega-cap and technology stocks, while smaller companies and other rate-sensitive areas remained under pronounced pressure, leaving the broader market notably weaker than the major averages suggested.

U.S. Treasuries recovered sharply from early losses on Wednesday, helped by fading oil prices and strong demand for the $39 billion 10-year note reopening. The 2-year note finished higher, while longer tenors remained modestly lower after the 10- and 30-year yields reached fresh 2026 highs earlier in the session. The 2-year note yield settled down two basis points to 4.77%, and the 10-year note yield settled up one basis point to 5.28%. 

• Nasdaq Composite: +18.5% YTD
• S&P 500: +14.0% YTD
• Russell 2000: +12.5% YTD
• S&P Mid Cap 400: +10.1% YTD
• DJIA: +6.5% YTD

Reviewing today's data: 

• The weekly MBA Mortgage Index was down 4.2% to follow last week's 6.0% decrease. The Refinance Index was down 7.5% while the Purchase Index was down 2.1%.
• Weekly crude oil inventories decreased by 3.19 mln barrels after increasing by 922,000 barrels a week ago.
• Consumer credit increased by $8.3 billion in August (Briefing.com consensus $15.2 bln) while the July increase was revised down to $17.7 billion from $18.1 billion.
  
  • Revolving credit decreased by $4.8 billion while nonrevolving credit was up $13.1 billion.