Hot August PPI Plus USD 100 Crude Push the 10-Year to a Three-Year High — September Hike Odds Jump to ~66%
The August producer price index, released Thursday September 10 by the Bureau of Labor Statistics, came in hot on the headline: final demand prices rose 0.4% month-on-month (in line with consensus) and 5.4% year-on-year, a tenth of a point above the estimate. Core PPI rose 0.2%, slightly softer than the 0.3% expected.
The composition is the tell. Final demand energy prices rose 4.2%, led by diesel up 24.1%, while goods prices rose 1.1% and services just 0.1% (transportation and warehousing +2.3%). Processed goods rose 1.8%. Portfolio management costs fell 1.6% in the month but remain 18.8% higher year-on-year.
Two things landed at the same time: US crude topped USD 100 a barrel and the 10-year Treasury yield hit its highest level since 2023 (4.836%, +3bp) after a Treasury buyback operation disappointed (USD 6bn of longer-dated debt versus expectations of more). Fed funds futures moved to price roughly a 66% chance of a 25bp hike at the September 15-16 FOMC, up from a coin flip earlier in the week. Weekly jobless claims were 206K versus 205K expected. Equity futures turned negative after the print. Friday's August CPI is the last input before the FOMC — consensus 3.4% headline, 2.4% core.
| Stock | Impact | Reason | Confidence |
|---|---|---|---|
| XOM / CVX / OXY / EOG / COP / SLB / USO | 🟢 Positive | Energy is the only real PPI driver (energy +4.2%, diesel +24.1%) and crude above USD 100 lifts upstream realisations | High |
| VLO / MPC / PSX | 🟢 Positive | Record diesel cracks — US diesel at an all-time high — are the strongest product margin in the complex | High |
| DAL / UAL / AAL / LUV / SAVE | 🔴 Negative | Jet fuel tracks diesel; USD 100 crude plus a hawkish Fed is the worst combination for unit costs | High |
| CCL / RCL / NCLH | 🔴 Negative | Fuel is the second-largest cruise cost line and discretionary demand faces a real-income squeeze | Medium |
| JPM / GS / MS | 🟢 Positive | Steeper curve and higher-for-longer rates support net interest margins | Medium |
| SPY / QQQ | 🟡 Watch | The 10-year at a three-year high compresses long-duration multiples; the AI earnings cycle is the offset | Medium |
| IWM (Russell 2000) | 🔴 Negative | Small caps carry more floating-rate debt; Russell 2000 fell 1.3% on Sep 9 as hike odds rose | Medium |
Trump Signals the Iran War Runs Past the November Midterms — Oil Stays Bid
Speaking at the Republican convention, President Trump said he believed the war with Iran would end immediately after the November 3 midterm elections, arguing Tehran is trying to influence the vote, and separately said oil and gasoline prices will not fall until after the midterms — while repeating a pledge of USD 2-3 per gallon gasoline. That is the clearest signal yet that the administration is not seeking a near-term ceasefire, which removes the main downside catalyst for crude.
The physical backdrop is tightening, not loosening: US forces sank five Iranian oil tankers on September 8-9 (Kharg Island and the Gulf of Oman) after Iranian missile attacks on a US warship; Iran said it struck 10 vessels near the Strait of Hormuz and announced an expanded no-go zone extending outside the strait. The EIA raised its 2026 and 2027 oil price forecasts as inventories drain.
| Stock | Impact | Reason | Confidence |
|---|---|---|---|
| XOM / CVX / OXY / COP / HAL / SLB | 🟢 Positive | A political calendar that rules out a near-term ceasefire is the single largest support for the energy complex | High |
| USO / OIH (oil ETFs and services) | 🟢 Positive | Direct proxy for the crude path; services pricing follows the rig count with a lag | Medium |
| DAL / UAL / AAL / LUV | 🔴 Negative | Every week of USD 100 crude is a down-leg to consensus FY27 EPS; gasoline above USD 4.20/gallon also hits leisure travel demand | High |
| WMT / TGT / COST | 🟡 Watch | Freight and diesel pass-through into goods costs, against resilient nominal consumer spending | Low |
Canada Trade War Escalates to Outright Import Bans
Canada's retaliatory tariffs on roughly USD 20bn of US goods — duties of 15% to 50% on hundreds of products, including US steel items raised to 50% from 25%, motorcycles, cosmetics and cheese — took effect on September 8. Trump responded with six proclamations on September 8: two excluding certain Canadian alcoholic beverages and dairy products from importation, two modifying the scope of duties on Canadian motor vehicles and alcohol, plus adjustments elsewhere.
The practical effect: tariffs were removed on road salt and cement, while new 50% duties land within six days on aluminium bars and rods, mattresses, golf carts and certain paper products. Trump also singled out Canadian jet maker Bombardier ("no more selling Bombardier in the United States — if they want our market, they must build here").
| Stock | Impact | Reason | Confidence |
|---|---|---|---|
| AA (Alcoa) | 🟢 Positive | 50% duties on imported aluminium bars and rods raise the domestic price umbrella for US primary aluminium | High |
| F / GM / STLA | 🔴 Negative | The deepest cross-border manufacturing exposure of any S&P sector: Canadian-built vehicles and parts face tariff and scope risk both ways | High |
| HOG (Harley-Davidson) | 🔴 Negative | Canadian retaliatory duties on motorcycles up to 50% hit the highest-tariff US consumer import in this round | Medium |
| TXT (Textron) | 🟡 Watch | 50% on imported golf carts helps a US-based manufacturer (E-Z-GO), but a tit-for-tat consumer-goods spiral cuts both ways | Medium |
| NUE / CLF / STLD | 🔴 Negative | Canada raised duties on US steel items to 50%, directly taxing US steel exports northbound | Medium |
| WMT / TGT | 🟡 Watch | Mattress, paper and consumer-goods tariff lines feed cost of goods; offsetting is the road-salt/cement relief | Low |
Leader Stock Trades: Trump's Nine Largest Energy Holdings Gained USD 1.5-4.4 Million During the Iran War
A CNBC analysis of the President's financial disclosures, company filings and FactSet data (published September 9) found that Trump's nine largest oil and gas holdings gained between USD 1.5 million and USD 4.4 million between February 27 (the trading day before the war) and August 31. The nine: Chevron, ConocoPhillips, Exxon Mobil, Kinder Morgan, Marathon Petroleum, Occidental Petroleum, Phillips 66, Valero Energy and Williams Companies.
Federal records show the accounts traded heavily across those names through June 29 (the most recent date on which any trade is disclosed), recording purchases and at least 23 sales. Separately, on September 6 Trump posted on Truth Social that he had made "hundreds of billions of dollars on stocks... for the U.S.A., not myself," sharing an AI-generated image of himself watching Intel stock rise — the post has added to scrutiny of the accounts rather than settling it. CNBC found no evidence that Trump or his managers traded on advance knowledge of policy decisions.
| Stock | Impact | Reason | Confidence |
|---|---|---|---|
| CVX / COP / XOM / OXY / PSX / VLO | 🟡 Watch | Disclosed, sizeable presidential exposure creates a copy-trade and sentiment channel in exactly the sector his Iran policy is re-rating | Medium |
| KMI / WMB (midstream) | 🟡 Watch | The two pipeline names in the top nine round out the integrated energy exposure | Low |
| DJT | 🟡 Watch | Truth Social is the distribution channel for these market-moving posts; disclosure scrutiny cuts both ways for the stock | Low |
US Market Close September 9: Third Straight Decline, Then a Hot PPI Print
- Dow -405.41 (-0.77%) to 52,380.66; S&P 500 -37.16 (-0.50%) to 7,636.36; Nasdaq -168.07 (-0.64%) to 26,253.34; Russell 2000 -1.3% to 2,919.86; VIX ~16.2. Worst week of the quarter so far (Dow -1.9% week-to-date) and the third consecutive decline.
- Oil was the through-line: Brent settled at USD 101.21 (+3.4%), back above USD 100 for the first time since July; WTI USD 96.05.
- Apple unveiled its first foldable — the iPhone Duo, from USD 1,999, pre-orders October 16 and on sale October 23 — under new CEO John Ternus; the stock closed slightly higher. Meta jumped about 6% on the launch of its Muse consumer AI agent (Mizuho raised its target to USD 750). Alphabet fell 2%.
- Mortgage rates approached 6.97% for a 30-year fixed — a direct function of the yield move, and the key affordability constraint on housing activity.