What moved
Asia is trading softer as the London open approaches. The Hang Seng is down 1.48% at 24,901.29 and the Shanghai Composite 0.44% lower; the Nikkei 225 has clawed back most of an early drop to sit 0.11% off at 65,068.87, and the Kospi is unchanged after a 5.4% gain over five sessions.
That follows a poor Wednesday. The Dow ended 0.77% lower at 52,380.66, the Nasdaq Composite fell 0.64% to 26,253.34 and the S&P 500 lost 0.48% to 7,636.36 — a third consecutive decline. Europe was worse: the CAC 40 closed down 1.94%, the DAX 1.66%, the Euro Stoxx 50 1.58% and the FTSE 100 1.31% at 10,670.06. US cash is shut; S&P 500 futures are 0.21% firmer and Nasdaq 100 futures flat, the only live read on the American day.
Why
The driver is energy. Brent is trading at $100.48 after moving above $100 for the first time since July, with the widening Middle East conflict and attacks on shipping choking traffic through the Strait of Hormuz — a fifth of seaborne oil supply passed through it before the war. WTI is at $95.62. Both are up more than 4% over five sessions and 13% or more over a month, which is why energy was the single sector to rise in the US on Wednesday, up 0.83%, while retailers and other consumer names were sold.
The transmission into equities runs through rates. The US 10-year yield closed 3.1 basis points higher at 4.837%, with the five-year up 4.1bp — the curve repricing not for cuts but for the risk of another hike, with traders now assigning roughly 60% odds to a move at the Fed's 15–16 September meeting. Wednesday's rise was compounded by the Treasury tripling its buyback operation in longer-dated debt. Higher discount rates hit long-duration equities and rate-sensitive sectors hardest, and the US tape bears that out: real estate, utilities and consumer discretionary all fell more than 1% while technology finished flat.
Europe's sharper fall carries an extra ingredient — the ECB decides today with a quarter-point increase all but fully priced, an unusual position for a central bank that had been on hold since mid-2025 and a direct consequence of energy-led inflation.
Sentiment & risk appetite
This is a de-risking tape rather than a panic. The VIX ended 4.7% higher at 16.46 and the MOVE index of rates volatility rose 0.79% to 76.74 — both elevated but not stressed. Breadth is the more telling number: across PrimerIQ's US universe 4,203 names fell against 1,516 that rose, and in the UK 578 fell against 198, so the weakness was near-universal rather than index-level noise. Our US sector medians were negative across every group bar energy, with consumer cyclicals the worst at -1.74%. Havens are being bought selectively — gold is up 0.95% at $4,457.90 — but the dollar index is flat at 98.74 and sterling steady at $1.3557, so this is an inflation scare, not a dollar-shortage scare. Copper, up 1.0% and within 0.15% of its 52-week high, argues the cyclical impulse is intact.
Economic calendar
Nothing of consequence printed in the UK at 07:00 this morning; the ONS calendar is quiet until later in the week. The day's set pieces are all in the afternoon. The ECB announces at 13:15 BST, with President Lagarde's press conference at 13:45 BST — the decision itself is close to fully priced at a 25bp rise in the deposit rate to 2.50%, so the guidance on whether energy-driven inflation forces more will do the moving. US producer prices for August follow at 13:30 BST, with consumer prices tomorrow; both are expected to show inflation running above 3%, against the Fed's 2% target.
Earnings
The US results that landed overnight on Tuesday were about guidance, not the quarter. ServiceTitan fell 29.98% after in-line-to-better numbers were overwhelmed by third-quarter revenue guidance below consensus and a slowing transaction growth rate; Casey's General Stores dropped 14.24% on decelerating same-store sales despite an earnings beat, and Chewy lost 10.83%. The exception was Signet Jewelers, up 23.96% after raising full-year profit guidance to $10.45–$12.15 a share from $9.20–$11 and announcing a $125m accelerated buyback.