Waller's Dovish Signal Fuels US Market Rally, Oil Hits 6-Week High
07 September 2026 · Morning
Fed Governor Waller indicated support for a September rate hold if inflation data confirms a slowdown, leading to a significant rally in New York markets.
The S&P 500 climbed 1.06% and Nasdaq rose 1.40%, while the dollar weakened and bond yields fell.
However, escalating US-Iran tensions pushed WTI crude to a six-week high of $91.30, introducing a conflicting inflationary pressure.
Asian markets closed before Waller's comments, with their reaction to the overnight rally expected at today's open.
European central banks signal potential shifts in monetary policy, with the ECB nearing the end of its tightening cycle and the Bank of England advocating for swift rate hikes.
Global Markets
Detail
S&P 500
Closed at 7,747.71 on 9/3
+1.06%
Nasdaq
Closed at 26,584.05 on 9/3
+1.40%
STOXX 600
Closed at 649.11 on 9/3
+0.49%
Nikkei 225
Closed at 64,214.26 on 9/3
-0.17%
CSI 300
Closed at 4,552.58 on 9/3
+0.10%
KOSPI
Closed at 6,579.48 on 9/3
+0.26%
Hang Seng
Closed at 25,213.31 on 9/3
-0.39%
Dollar Index (DXY)
Closed at 98.99 on 9/3
-0.59%
USD/JPY
Closed at 155.82 on 9/4
+0.01%
EUR/USD
Closed at 1.16 on 9/4
-0.01%
USD/KRW
Closed at 1,355.97 on 9/3
-0.19%
USD/CNY
Closed at 6.72 on 9/3
-0.01%
US 10-Year Yield
Closed at 4.772% on 9/3
-0.8bp
US 2-Year Yield
Closed at 4.340% on 9/3
-3.1bp
Japan 10-Year Yield
Closed at 2.948% on 9/3
-5.4bp
Germany 10-Year Yield
Closed at 3.353% on 9/3
-2.0bp
Korea 10-Year Yield
Closed at 4.363% on 9/3
-4.1bp
US HY Spread
Closed at 266bp on 9/2
+1.0bp
WTI
Closed at 91.30 on 9/3
+0.32%
Gold
Closed at 4,477.58 on 9/3
+1.96%
Copper
Closed at 6.66 on 9/3
+1.08%
VIX
Closed at 14.31 on 9/3
-5.79%
Markets & Commodities
Canada Services PMI46.8
Canada's services PMI fell to a six-month low of 46.8 in August, signaling economic contraction.
New orders weakened due to US-Middle East geopolitical tensions and trade uncertainty.
Canada July Trade SurplusC$769M
Canada's trade surplus significantly narrowed to C$769 million from C$4.2 billion in July.
Exports of energy and metals declined 2.3%, while imports rose 2.2%.
US 50% tariffs, affecting 66% of Canada's exports, are expected to be reflected in statistics from late September.
US 10-Year Treasury Yields4.74%
US 10-year Treasury yields reached 4.74% as market odds for a September Fed hike reflected 60%.
Strong US economic data, including jobless claims and services PMI, reinforced expectations for a rate increase.
Brent Crude$97/barrel
Brent crude rose to $97 per barrel, intensifying concerns about economic slowdown.
This rise comes amid escalating geopolitical tensions in the Middle East.
Japanese Yen+2%
The yen surged 2% in two days, the largest gain since early August, signaling renewed intervention by Japanese authorities.
EUR/USD faced downward pressure, trading between 1.1588 and 1.1614.
United States
Fed Rate Hike Expectations9月 50%↓
Fed Governor Waller indicated he would support holding rates at 3.50-3.75% in September if August inflation data cools.
Market bets for a September hike plummeted from 62% to around 50%, signaling a potential shift in the Fed's stance.
US Services Sector ActivityISM PMI 55.4
The ISM Non-Manufacturing PMI rose to 55.4 in August from 54.1, driven by strong demand and new orders reaching a 3.5-year high.
Rising input costs and prices paid signal persistent inflation risks, while weakening employment suggests a mixed labor market ahead of Friday's jobs report.
US-Iran Tensions13 Deaths
US airstrikes reportedly killed at least 13 Iranian military personnel, including three pilots, escalating the conflict.
The US intensified economic pressure with oil export blockades and dollar transaction bans, while UAE also cut trade and financial ties with Iran.
Neutral Rate OutlookR-star 1.65%
Fed Governor Waller noted that the safety and liquidity premium on US Treasuries has been depleted, reflecting increased capital competition and fiscal concerns.
The New York Fed's R-star estimate for Q2 was 1.65%, suggesting a structural rise in the neutral rate.
Auto Industry on China ImportsLegislative Push
The Alliance for Automotive Innovation, representing major manufacturers like GM, Ford, and Toyota, urged Congress to pass a law banning Chinese car imports by year-end.
This move aims to strengthen the Biden administration's existing measures and address the perceived threat from Chinese vehicles in global markets.
Broadcom (AVGO)-2.74%
Q3 revenue of $29.59B and adjusted EPS of $3.32 exceeded expectations.
Q4 revenue guidance of $34.8B fell below consensus, leading to a pre-market stock reaction of -1.8% to -4%.
Management raised its AI semiconductor revenue guidance to $115B for 2027 and $230B for 2028, reaffirming $350B in AI chip shipments over the next two years.
Several investment banks lowered their target prices, while others, including Melius Research and Morgan Stanley, raised theirs, signaling confidence in future demand and growth.
Nvidia (NVDA)+1.80%
Announced the acquisition of Hugging Face for $12.93B, aiming to secure the open-source AI ecosystem.
The deal includes up to $1B in stock-based compensation to retain employees, with completion targeted for H1 2027.
The company plans to launch RTX Spark AI PCs in October, with Lenovo and Acer as initial manufacturers.
Apple (AAPL)+1.00%
Reports indicate CEO Tim Cook will transition to Chairman, with John Turnus succeeding him as CEO.
Apple faces a £2B ($2.7B) class-action lawsuit in the UK regarding its App Tracking Transparency policy, alleging market dominance abuse and unfair restrictions on third parties.
Alphabet (GOOGL)+1.59%
A court dismissed the DOJ's demand for a business split in an antitrust ruling, partially resolving regulatory uncertainty.
The company released Gemini 3.8 and Fairwind, a cyber defense program for governments, expanding its product lineup.
However, EU antitrust authorities are investigating its AI search opt-out options for publishers.
Microsoft (MSFT)
Decided to reorganize its business units into Azure & Infrastructure and Devices & Consumer starting FY27.
Azure revenue will be reported separately, with Q1 FY27 Azure revenue growth guided at 44-45% (constant currency).
Palo Alto Networks (PANW)
Reported to acquire AI startup Console for $500M.
T-Mobile (TMUS)+0.38%
CFO Peter Osvaldik will retire in February 2027, with Jessica Uhl appointed as his successor.
The company reaffirmed its 2026 financial guidance and capital return policy, including dividends and share buybacks.
Meta Platforms (META)+3.01%
Reported to be attempting to narrow the technology gap with competitors by releasing new AI models.
Launched a bill payment feature for utilities, water, and insurance via WhatsApp in India, covering 22,722 billers.
AbbVie (ABBV)-0.58%
Its blood cancer drug, Etentamig, met key endpoints in the Phase 3 CERVINO trial, showing a 74% response rate versus 45.7% for the control group.
The acquisition of Apogee Therapeutics was completed, expected to dilute adjusted EPS by -$0.14 in 2026 and -$0.46 in 2027, turning accretive from 2032.
Reaffirmed its Q3 and full-year 2026 adjusted EPS guidance, demonstrating management confidence despite the acquisition.
NextEra Energy (NEE)+1.16%
Its merger agreement with Dominion Energy was approved by shareholders with over 671 million votes in favor.
NextEra Energy and Santee Cooper are transitioning existing systems to Google-based AI tools for weather forecasting and operational planning.
Duke Energy (DUK)+0.70%
Duke Energy Florida formally requested regulatory approval for a rate reduction to take effect in January 2027.
Williams Companies (WMB)-1.48%
Completed the acquisition of Momentum Midstream, expanding its asset base in oil and gas transportation and storage infrastructure.
GE Vernova (GEV)+2.16%
Secured a contract to supply turbines for a 96MW wind farm in Scotland and announced cooperation on a 1.2GW nuclear power project in Sweden.
Also signed a contract for power grid maintenance in Venezuela, indicating multiple new orders.
Boeing (BA)
Confirmed paying a $3.1M fine to the FAA for safety violations related to the Alaska Airlines door plug incident.
Amazon (AMZN)+1.54%
Users reported AWS service outages in the US.
Wells Fargo raised its target price for Amazon.
Reports indicate Amazon aims to handle nearly 90% of its US deliveries through its own network.
Tesla (TSLA)+5.42%
Scheduled to unveil its two-seater autonomous robotaxi, Cybertaxi, on Thursday in Texas.
France began testing Tesla's Full Self-Driving (FSD) technology, with potential approval by year-end, following similar interim approvals in other EU countries.
Costco (COST)
Reported August net sales of $23.7B, a 9.9% year-over-year increase, with comparable store sales up 8.4%.
Walmart (WMT)+2.20%
Expanded its restaurant food delivery business on its platform through a partnership with Inspire Brands, owner of Dunkin' and Burger King.
Chevron (CVX)-0.22%
Signed new oil and gas business agreements in Ghana and Venezuela.
Several brokerages, including BMO and Piper Sandler, raised their target prices for the company.
ExxonMobil (XOM)-1.18%
Piper Sandler raised its target price for ExxonMobil.
Palantir Technologies (PLTR)+7.71%
Expanded its strategic collaboration with PwC to scale and market enterprise AI solutions.
Goldman Sachs (GS)+3.34%
Dinesh was appointed Chief Technology Officer (CTO) of the Core Engineering division.
Reddit (RDDT)-1.33%
Expanded its MAX Campaigns, an automated ad campaign optimization tool, to all advertisers, enhancing accessibility for its advertising platform.
Emerging Markets
Ukraine Peace TalksWheat -3.6%
Wheat futures fell 3.6% after President Putin suggested a peace agreement for the Ukraine war is possible, with US and China supporting talks.
Ukraine's foreign ministry also expressed optimism, easing concerns over Black Sea grain supply disruptions.
Senegal Bond Payments2048 Bond +2.5c
Senegal confirmed it initiated coupon payments for its 2048 international bond, signaling continued commitment to debt servicing despite an ongoing IMF bailout.
This strengthened credit confidence, leading to a rally in Senegal's international bonds.
Bolivia IMF Resistance$1.9B Program
Bolivian civil society groups and unions continue to resist the government's $1.9 billion IMF austerity program, linking it to fuel shortages and diesel subsidy cuts.
The program still awaits approval from Congress and the IMF executive board, amid public fears of harsh austerity measures.
Poland Interest RatesRates Hold
Polish MPC member Iwona Duda stated that keeping interest rates at current levels until at least year-end is the baseline scenario.
This comes after the central bank governor hinted at a potential 25bp cut, but other policymakers appear less inclined for further easing.
Hungary Rate DecisionSept CPI Focus
The Hungarian central bank announced it would base its September interest rate decision on the latest inflation outlook.
This statement clarifies its stance following reports of a potential pause in rate easing this month.
Egypt GDP GrowthFY26 GDP +5.1%
Egypt's GDP growth for the 2025/26 fiscal year is projected at 5.1%, an increase of 0.7 percentage points from the previous year's 4.4%.
This upward revision indicates a more optimistic economic outlook.
Europe
Bank of England Chief Economist Advocates Swift Rate HikesPolicy Shift
Chief Economist Huw Pill stated that prompt interest rate increases could preempt "second-round effects" of inflation, such as rising wages and inflation expectations.
He emphasized that early action could reduce the scale and duration of future policy responses.
Pill rejected "fine-tuning" rates amidst energy price uncertainty, calling for clear and decisive policy signals.
ECB Expected to Conclude Rate Hike CycleCycle End
A Reuters poll indicates that most economists anticipate the European Central Bank's upcoming rate hike to be its second and final one, concluding the shortest tightening cycle in 15 years.
The prevailing view is that rising energy prices are unlikely to translate into broad inflationary pressures.
Market forward rates currently price in a deposit rate of around 3% by June of next year.
Sweden's Riksbank Sees Unclear Inflation RisksNo Broad Inflation
Sweden's central bank suggests that inflation risks are not clear and economic growth could proceed without immediate inflationary pressure.
Governor Erik Thedeen noted no broad or sustained signs of rising inflation so far, but stressed the need for high vigilance.
The presence of spare capacity in the labor market supports the potential for economic growth without short-term inflation.
European Bonds Rebound as Gas Prices FallYields Retreat
UK and Eurozone bonds saw a rebound, with long-term yields retreating from multi-year highs, driven by falling natural gas prices.
UK 20-year and 30-year gilt yields returned to last week's levels after reaching their highest since 1998 over two days, though short and medium-term yields remained elevated.
Germany's 10-year Bund yield, after six consecutive days of weakness, rebounded from near a 15-year high.
EU Amends Antitrust Rules for Sustainable PracticesNew Exceptions
The EU Competition Commission announced revised competition law guidelines, creating new exceptions for sustainable business practices.
Dominant companies with over 40% market share can now justify competitive restraints based on sustainability criteria, such as raw material savings, pollution reduction, and increased recycling.
This revision allows for more exceptions to competition restrictions than previous rules.
Ireland's Corporate Tax Revenue Jumps in August+33% YoY
Ireland's corporate tax revenue surged to 2.8 billion euros in August, a 33% increase from 2.1 billion euros in the previous year, largely due to payments from a few US multinational corporations.
This additional corporate tax income pushed the year-to-date tax revenue 3.9 billion euros, or 6.2%, above the same period last year (excluding the historical Apple tax assessment).
Annual corporate tax revenue increased by 8.3%, reaching record levels.
Germany's Stade LNG Terminal Set for November LaunchEnergy Security
Deutsche Energy Terminal announced that the Energos Force FSRU (floating storage and regasification unit) is expected to arrive in Stade in September, with operations commencing in November with its first commissioning cargo.
This marks Germany's fifth floating LNG terminal, part of its strategy to diversify energy sources after Russian pipeline supply cuts in 2022.
UK New Car Registrations Rise, BEVs Lead Fuel Types+17.5% YoY
New car registrations in the UK increased by 17.5% in August compared to the same month last year, according to NewAutomotive data.
Battery electric vehicles (BEVs) emerged as the largest fuel type in the UK market.
Suspected Arson at German Defense Firm Amid Infrastructure AttacksInvestigation
German authorities are investigating a suspected arson incident outside a Munich defense company, following a series of sabotage and disruption events.
This follows a drone attack at an airport last month, with Berlin attributing some incidents to Russia.
Past incidents include a DHL parcel fire in July 2024 at Leipzig Airport, which later expanded to parcel explosions at logistics centers in the UK and Poland, eventually linked to hidden incendiary devices from Russia.
Companies
Volkswagen (VOWG_p.DE) Approves Major Restructuring50,000 Job Cuts
Volkswagen's supervisory board unanimously approved a "Future Plan" that includes a potential reduction of up to 50,000 jobs, including management positions.
The plan aims to enhance the company's competitiveness and prepare it for future challenges.
This initiative seeks to improve efficiency, competitiveness, and future positioning across the Volkswagen Group and its brands.
China
China Deploys First Policy Financing Funds for Emerging Industries460M Yuan
The China Development Bank disbursed its first tranche of policy-based financing, totaling 460 million yuan (approximately $68.47 million).
These funds are allocated to three projects in emerging sectors: battery production, advanced nickel-chromium materials, and transportation infrastructure.
China Launches 5-Year Plan to Support "Little Giants" SMEsInnovation Boost
Ten central government agencies unveiled a five-year plan to bolster "little giants" and small and medium-sized enterprises (SMEs) in emerging sectors.
The initiative aims to promote technological self-reliance and job creation by involving these companies in national science and technology projects.
It also encourages the use of government funds for early-stage capital investment.
S&P Global Warns of Credit Risk from China's Lenient RatingsAAA vs B
S&P Global Ratings' Asia-Pacific head warned about the accumulation of credit risk in China's domestic financial market due to lenient local credit ratings.
The issue arises as foreign companies, rated B (speculative grade) globally, are often upgraded to AAA (highest creditworthiness) for issuing Panda bonds (yuan-denominated bonds) in China.
This practice allows credit risk to flow into the domestic financial system.
Japan
Yen Surges on Increased BOJ Rate Hike Bets+2% vs USD
The Japanese Yen jumped over 2% against the dollar, with the USD/JPY pair falling from 158.96 to 156.17, nearing its July high.
Markets are now pricing in a 75% probability of a 25 basis point rate hike by the Bank of Japan (BOJ) in September.
No official yen-buying intervention by the BOJ was confirmed in account data as of September 3rd.
Japan's FX Vice Minister Mimura Vigilant on Yen VolatilityOn Alert
Japan's Vice Minister of Finance for International Affairs, Mimura, stated he is "not reassured" by recent rapid movements in the yen and is closely monitoring currency market trends.
He maintained a cautious stance, refraining from disclosing specific exchange rate levels or policy positions.
India
RBI's Dollar Deposit Scheme Boosts Liquidity to Record Highs$127.23B Inflow
India's financial system liquidity surplus expanded to a record 9.70 trillion rupees (approximately $102.7 billion), driven by an inflow of about $127.23 billion from the RBI's special dollar deposit scheme.
The Reserve Bank of India is now considering absorption tools like Variable Rate Reverse Repos (VRRR) to manage the excess liquidity, which could exacerbate inflation.
Indian Rupee Reaches 10-Week High94.49/USD
The Indian Rupee reached a 10-week high, closing at 94.49 per dollar, a level not seen since June 25th.
This 0.5% daily gain, the largest since July 27th, was primarily driven by the Reserve Bank of India's dollar inflows.
Despite starting strong at 94.30, dollar demand from importers limited some of the gains.
Indian Bond Yields Mixed Amid Dollar Inflows and Oil Price SurgeYields Mixed
Indian government bond yields showed mixed movements, influenced by conflicting pressures from dollar inflows and rising oil prices.
The 10-year bond yield initially fell to 6.9323% in the morning due to dollar inflows but rebounded as inflation concerns from surging oil prices created upward pressure, closing at 6.9646%.
Shorter-term bonds, like the 5-year, saw relative strength, closing down 4 basis points at 6.5216%.
SEBI to Review Derivative Settlement Pricing MethodologyMarket Concerns
The Securities and Exchange Board of India (SEBI) plans to review its methodology for determining derivative settlement prices.
This decision follows concerns raised about market manipulation, discrepancies between exchange indices, and sharp fluctuations in option prices.
These issues emerged after the introduction of closing auctions for equity cash market prices on August 3rd, and the regulator will incorporate user feedback.
Latin America
Latin American Stocks Reach Multi-Month HighsMSCI LatAm +0.6%
The MSCI Latin America index rose 0.6%, maintaining levels near a four-month high.
Brazil's Bovespa index advanced 0.7%, marking its twelfth consecutive day of gains.
This upward trend was supported by rising crude oil prices and a weaker US dollar.
Chile's Central Bank Expected to Maintain Key Rate4.5% Rate
The Central Bank of Chile is widely expected to keep its benchmark interest rate at 4.5% during its policy meeting next week.
Traders surveyed by Reuters expect the Central Bank of Chile to maintain its benchmark interest rate at 4.5% for the next 24 months.
Consumer price inflation is projected to accelerate to 0.3% in August and 0.6% in September, with a 12-month forecast of 3.3%.
Brazil and ECB Explore Pix-Based Cross-Border Payments LinkPilot by 2028
Brazil and the European Central Bank (ECB) are exploring a potential link for Pix-based cross-border payments.
A pilot project could launch as early as 2028, marking the first significant trial of cross-border transactions using Brazil's instant payment system, Pix.
JPMorgan Sees Continued Carry Trade Support for LatAm CurrenciesCarry Trade Boost
JPMorgan anticipates ongoing support for carry trades in high-yielding Latin American currencies, including the Colombian Peso, Brazilian Real, and Mexican Peso.
The profitability of carry trades has increased due to a weaker dollar following recent US Treasury market support measures.
However, the recent currency strength does not necessarily reflect improved economic fundamentals.
Colombia Repeals Mining and Oil Development RestrictionsEconomic Stimulus
Colombia's new right-wing government, under President Abelardo De La Espriella, repealed ten administrative decrees that restricted mining and oil exploration and extraction.
This move is part of a broader economic stimulus policy.
The administration plans to pursue additional administrative decrees to streamline procedures.