What moved
Wall Street is trading lower after the 08:30 ET producer-price print. The S&P 500 is at 7,594.03, down 0.55%, the Nasdaq Composite is off 0.80% and the Dow is down 0.34% — the narrower loss reflecting how much of the damage is concentrated in technology.
Europe has drifted through the afternoon rather than broken: the FTSE 100 is down 0.36% at 10,632.01, the DAX 0.51% lower, the CAC 40 down 0.26% and the Euro Stoxx 50 off 0.55%. Asia finished mixed before any of it — the Nikkei 225 closed up 0.20%, while the Hang Seng ended 1.27% lower and the Shanghai Composite fell 0.43%.
Why
The morning's driver is energy feeding into inflation. Producer prices rose 0.4% in August, matching forecasts, but the annual rate came in at 5.4%, a tenth above expectation, and the composition is the uncomfortable part: final-demand energy prices jumped 4.2%, with diesel alone up 24.1%. That is the Strait of Hormuz arriving in the US price data. Brent is up 3.66% at $104.91 and WTI 3.73% at $99.63, extending an 18% gain over the past month as US–Iran strikes on tankers and refining infrastructure thin traffic through a chokepoint that normally carries about a fifth of world oil supply.
The bond market has taken the point. The 10-year Treasury yield is 7.9 basis points higher at 4.916%, the five-year up 8.5 and the 30-year up 6.1 — a front-loaded move consistent with repricing what the Fed does next week rather than long-run growth. A rate rise, unthinkable earlier in the year, is now a live possibility rather than a tail risk. Higher discount rates hit long-duration equities hardest, which is why the Nasdaq is underperforming the Dow by a wide margin.
Copper is the odd one out, down 3.31% with no clean explanation on the wires; treat it as unexplained rather than as a growth signal.
Sentiment & risk appetite
This is a defensive tape rather than a panicked one. The VIX is up 7.78% at 17.74 and 22% higher over five sessions, but that is a long way from stress; the MOVE index closed Wednesday at 76.74, barely changed. Sector dispersion tells the story better: consumer staples are up 0.85% and health care and utilities marginally higher, against technology down 1.31% and materials down 1.13%. Gold is not being bid — it is down 0.19% at $4,407.40 — while the dollar index is up 0.28%, so the haven flow is going into cash and the currency, not into metal. Bitcoin, down 1.74%, is behaving like a risk asset. PrimerIQ's own US breadth for Wednesday was already poor at 1,516 advancers against 4,203 decliners.
Economic calendar
The August producer price index landed at 08:30 ET: 0.4% on the month against a 0.4% consensus, 5.4% year on year against 5.3% expected, with the core measure excluding food, energy and trade services up 0.3% and 4.7% over twelve months. Weekly initial jobless claims, released alongside, were 206,000 for the week to 5 September versus 205,000 expected — still historically low and not a labour market that argues against tighter policy.
The rest of today's US calendar is light. The consequential number is tomorrow's August consumer price index at 08:30 ET, which lands days before the Federal Reserve decides.
Earnings
Macy's reported before the bell with adjusted earnings of 63 cents a share against a 37-cent consensus, a 70% surprise, and raised its full-year sales and earnings guidance. The tone of the week has otherwise been set by guidance rather than results: ServiceTitan fell almost 30% on Wednesday after soft near-term revenue guidance despite beating on the quarter, while Meta gained 6.55% and Cloudflare 10.51%.