MARKET SNAPSHOT
Rising energy prices weighed on the S&P 500, which slipped for a second straight day. U.S. Treasury yields retreated from session highs following a steady auction of longer-dated securities and a Treasury buyback operation. Oil prices rose amid increasing volatility in the Middle East. Gold prices rose as the dollar weakened.
MARKET WRAPS EQUITIES
U.S. stocks were mixed as oil futures jumped in response to new attacks on Middle East energy shipments, volatility continued in bond markets and doubts surfaced about artificial-intelligence profits.
The Dow Jones Industrial Average rose 0.1%. Meanwhile the S&P 500 fell 0.47%, and the tech-heavy Nasdaq Composite slipped 1.25%.
It was the latest turbulent session in a back-and-forth start to the fourth quarter for the U.S. stock market. In the tug of war between bears and bulls, each side is anchored by data. Bears can point to the surge in energy prices causing a lasting bout of higher inflation and interest rates. The bull case is frequently reinforced by statistics from the AI boom.
Earlier Thursday, equity markets across Asia fell in the wake of Wednesday's declines in European and U.S. stock markets.
China's Shanghai Composite Index slipped 0.8% as markets reopened after a weeklong holiday. Semiconductor stocks led the declines. The Shenzhen Composite Index declined 1.6% while the tech-focused ChiNext Price Index slid 3.15%.
Hong Kong's Hang Seng dropped 1.4%.
South Korea's Kospi fell for a third consecutive session, declining 2.6% as chip stocks retreated.
Japan's Nikkei Stock Average lost 1.4%, weighed by machinery and financial stocks.
Stocks in Australia slipped, as the S&P/ASX 200 declined 0.8%. New Zealand's S&P/NZX 50 Index, however, added 0.1%.
COMMODITIES
Crude oil futures settled higher as Hurricane Isaias headed for the U.S. Gulf coast, shutting in production.
The market reacted less to proclamations from President Trump regarding the status of negotiations with Iran and a pause on attacks until after the midterm elections on Nov. 3. Even though Trump's comments would suggest that negotiations are progressing, their effect on price movement appears to have weakened.
"The market has heard it all before, and the pullback just isn't what it was in the past," said Robert Yawger of Mizuho Securities USA in a note.
WTI finished up 3.6% to $91.49 a barrel, and Brent crude settled up 4.1% to $104.28 a barrel.
Front month Comex gold for October delivery gained 0.44% to settle at $4131.80 per troy ounce.
TODAY'S TOP HEADLINES
Tanker Attacks Push Deeper Into Gulf, Rattle Oil Markets
An attack on an oil tanker near Qatar, deep inside the Persian Gulf, has raised fears among traders that a surge in strikes on shipping is spreading beyond the Strait of Hormuz, threatening the tanker operations that have helped keep oil flowing despite the conflict.
The Acers, an oil and chemical tanker, was struck by several projectiles north of Qatar late Wednesday, causing casualties, according to maritime intelligence firm Vanguard and the U.K. Maritime Trade Operations agency.
It wasn't confirmed Iran conducted the latest strikes near Qatar, but Iranian state-linked media have reported that Iranian forces struck several tankers in recent weeks around the Strait of Hormuz, the narrow waterway connecting the Gulf to the open seas. Iran's ability to target ships has also improved in recent weeks, adding to the risks in the strait, The Wall Street Journal has reported.
U.S. Budget Deficit Jumps to Nearly $2 Trillion
WASHINGTON-The U.S. budget deficit climbed to nearly $2 trillion in the fiscal year that ended Sept. 30, according to the Congressional Budget Office, deepening the federal government's persistent red-ink trend.
The $1.993 trillion deficit was 12% above the 2025 level in nominal dollars, reaching the highest level since 2021. The U.S. spent $7.4 trillion last year, up 6%, and it collected $5.4 trillion in revenue, up 3%.
The deficit also stayed high as a share of gross domestic product, the metric that economists watch closely. Although the final fiscal 2026 GDP number hasn't been released yet, budget experts expect the deficit to surpass 6% of GDP, compared with 5.8% in fiscal 2025.
Trump Says U.S. Won't Resume Strikes on Iran Before Midterms
The U.S. won't attack Iran before the November midterm elections, President Trump said Thursday, citing "productive" talks with Tehran.
"We are having productive discussions with the Islamic Republic of Iran," Trump said in a Truth Social post. "We will not be attacking Iran at any time prior to the Midterm Elections to be held in the United States on November 3rd. IRAN WILL NOT HAVE A NUCLEAR WEAPON!"
The U.S. naval blockade of Tehran "will remain in full force and effect," Trump added. The U.S. currently has about a dozen Navy ships in the waters of the Middle East to enforce the blockade and carry out other missions, according to a Navy official.
U.S. Interest Rates Could Rise Over Next Six to Nine Months, Fed's Musalem Says
U.S. interest rates may need to climb for the next six to nine months to subdue inflation, Federal Reserve Bank of St. Louis President Alberto Musalem said, setting a tentative timeline for further monetary tightening.
Speaking at a Bloomberg conference on fixed income, Musalem said the Fed is focused on bringing inflation back to the central bank's 2% target in a timely manner, which he described as roughly 18 months.
"If the timing is 18 months, that suggests rates ought to be going up further in an appropriate period of time, in the next six to nine months," the St. Louis Fed president said.
Vance Says U.S. Will Suspend Microsoft and Other Firms From Green Card Program
Vice President JD Vance said Thursday that the administration is suspending several tech firms, including Microsoft, from a program that allows H-1B visa holders to apply for green cards.
The action by Vance's antifraud task force targets Microsoft, Adobe and several tech recruiting companies over what officials have alleged are widespread abuses of the visa system. The announcement came the same day that President Trump recognized Microsoft's CEO and other tech leaders at an event in Washington.
Vance said that no other company has abused the system more than Microsoft, accusing the tech giant of laying off U.S. citizens only to replace them with foreign workers brought into the country on H-1B visas. "For every worker that Microsoft laid off, they replaced that worker with one-and-a-half foreign indentured servants," he said, arguing that the company is indicative of a "scandalous system that we've allowed in this country for far too long."
The Credit-Card Bill That Banks Fear Most Has Gained Trump as an Ally
A credit-card bill that could dent banks' profits and erode Visa's and Mastercard's dominance has a new champion, and he sits in the Oval Office.
President Trump, Vice President JD Vance and some top lieutenants on the campaign trail have endorsed a long-stalled legislation that would give merchants the option to choose a different card network to process transactions when their customers use a credit card.
The legislation has the potential to upend the system of billions of dollars in fees that drive the credit-card industry, which means the president's support has merchants salivating and some bankers concerned.
Expected Major Events for Friday 04:00/MAL: Aug Manufacturing sales
04:00/MAL: Aug Industrial Production Index
04:01/MAL: Aug Labour Force Statistics
07:30/THA: Weekly International Reserves
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