U.S. oil prices breached $100 per barrel on Thursday, while the three major indices extended their losing streak. The release of the Producer Price Index (PPI) data reinforced expectations that the Federal Reserve will deliver a rate hike at next week's policy meeting, exacerbating the sell-off in U.S. Treasuries. Late in the session, the yield on the 10-year Treasury note hovered around 4.945%, up 10 basis points for the day.

U.S. Equities: At the closing bell, the Dow Jones Industrial Average fell 316.559 points, or 0.60%, to 52,064.102; the S&P 500 dropped 44.660 points, or 0.58%, to 7,591.700; and the Nasdaq Composite declined 171.615 points, or 0.65%, to 26,081.725. NVIDIA Corp (NASDAQ: NVDA) slid 2.2%, Intel Corp (NASDAQ: INTC) tumbled 5.5%, SK Hynix lost 5.2%, while Apple Inc (NASDAQ: AAPL) advanced 3.5%. The Nasdaq Golden Dragon China Index closed up 0.66%.

European Equities: Germany's DAX 30 slipped 173.91 points, or 0.68%, to 25,380.37; the UK's FTSE 100 dropped 60.07 points, or 0.56%, to 10,609.99; France's CAC 40 declined 39.91 points, or 0.49%, to 8,116.76; the Euro Stoxx 50 fell 39.91 points, or 0.63%, to 6,271.65; Spain's IBEX 35 was down 17.42 points, or 0.09%, to 19,663.38; and Italy's FTSE MIB slipped 34.74 points, or 0.07%, to 51,840.50.

Asian Equities: Japan's Nikkei 225 gained 0.2%, while South Korea's KOSPI Composite Index shed 0.25%.

U.S. Dollar Index: The dollar index, which measures the greenback against six major currencies, rose 0.23% on the day, settling at 99.048. At the close of New York foreign exchange trading, the euro bought $1.1613, down from $1.1630 the previous session; the pound traded at $1.3513, down from $1.3546; the dollar strengthened to 154.32 Japanese yen from 153.60; the dollar fetched 0.8129 Swiss francs, up from 0.8103; the dollar rose to 1.3830 Canadian dollars from 1.3806; and the dollar advanced to 9.6782 Swedish kronor from 9.6009.

Cryptocurrencies: Bitcoin fell 0.95% to $77,161 at the time of writing, while Ethereum gained 0.4% to $2,459.

Crude Oil: At the close, light crude for October delivery on the New York Mercantile Exchange surged $6.43 to settle at $102.48 per barrel, a gain of 6.69%. Brent crude for November delivery on the London ICE Futures Exchange rose $6.42 to close at $107.63 per barrel, up 6.34%. Both benchmark grades hit their highest levels since May 19 and posted their largest single-day gains in nearly two months. Reports indicated that Houthi rebels took control of Yemen's Mukha port on Thursday, potentially posing further threats to Red Sea shipping. Meanwhile, as attacks on tankers in the Gulf region intensified in recent days, shipping through the Strait of Hormuz remained constrained. XS.com Head of Business Development Massabni noted that Houthi attacks on Saudi energy facilities have introduced a new source of risk, expanding market concerns beyond Iran and the Strait of Hormuz. He said the threat is no longer confined to a single critical shipping chokepoint, but could lead to cascading disruptions in regional export routes, oil production facilities, and other energy infrastructure.

Precious Metals: Spot gold tumbled 1.92% to $4,316.63 per ounce, while spot silver was quoted at $63.599 per ounce. Analyst Michael Boutros stated that the earlier release of U.S. PPI data intensified expectations of further monetary policy tightening, with federal funds futures currently indicating a roughly 72% probability of a Fed rate hike next week. The market's attention now shifts to the upcoming U.S. CPI report. If the CPI data comes in above expectations, it could reinforce these expectations, pushing Treasury yields and the dollar higher while adding downward pressure on gold. Conversely, softer inflation data could challenge recent pricing dynamics and help stabilize bullion ahead of the Fed meeting.

Macro Headlines:

U.S. diesel prices have breached the $6 per gallon mark for the first time, adding a new inflation risk. According to price-tracking firm GasBuddy, the U.S. national average diesel price topped $6 per gallon on Thursday for the first time on record. The U.S.-Iran conflict, along with Ukrainian strikes on Russian refineries, have squeezed diesel supply. Diesel is a critical pillar of economic activity, fueling the trucks, trains, ships, and heavy equipment that keep supply chains running, and it also serves as a vital energy source for agricultural production. Rising fuel prices have become a thorny issue for President Donald Trump and Republican lawmakers as they strive to maintain the party's slim majority in Congress ahead of the November midterm elections. GasBuddy analyst Patrick De Haan said, "Every truck, every delivery, every package, every trip to buy groceries is now more expensive." He added that "record diesel prices could reignite inflation across the entire supply chain." According to the firm's data, the average U.S. diesel price is up about $2.30 from a year ago.

The U.S. Treasury's latest debt buyback operation, expanded for the first time under Treasury Secretary Bessent, repurchased fewer long-dated securities than investors expected, intensifying the sell-off and pushing long-end yields to multi-year highs. The Treasury bought $5.187 billion in 10- to 20-year notes on Thursday, below the previously announced maximum repurchase size of $6 billion. The 10-year Treasury yield rose to its highest level since 2023 following the operation. Investors submitted a total of $10.5 billion in bond sale offers during the operation. While the Treasury is not obligated to buy the full maximum amount, this marks only the third time in 53 long-dated buyback operations since the program was relaunched in 2024 that it has chosen not to purchase the full cap. TD Securities strategist Molly Brooks commented, "This indicates the Treasury is being more selective than usual. If the Treasury wants to meet market expectations and execute full buybacks to cap long-end rates, it may need to accept less attractive offers in future operations. At the very least, the precedent of purchasing 100% of the maximum has been broken, which could help re-anchor market expectations."

Following the PPI report, the probability of a Fed rate hike in September has risen to 70%. Reports indicate that markets have increased bets on a rate hike at next week's Fed meeting. This follows the first key inflation report of the week, which showed U.S. producer prices rose 5.4% year-over-year through August. Before the report, markets priced in roughly a 65% probability of a 25-basis-point hike at the September 15-16 meeting. Based on CME Group's federal funds futures pricing, the market now sees the probability at about 70%.

Stock News:

Microsoft Corp (NASDAQ: MSFT) is reportedly planning to significantly expand its data center footprint, aiming to exceed 38 gigawatts of global data center capacity by 2032, more than triple its current ~12 gigawatts. The plan is designed to address the compute shortage caused by rapid growth in AI and cloud businesses in recent years, with Microsoft having previously turned away some AI and cloud deals due to capacity constraints. According to sources, the roadmap includes both Microsoft-built and leased data centers but excludes capacity rented from "new cloud providers" like CoreWeave. The plans remain subject to adjustments based on customer demand and technological changes. Microsoft's capital expenditure reached $145 billion in its latest fiscal year, with analysts expecting further growth in the coming years. The report noted that Microsoft's temporary pause on some data center construction restricted compute supply, pushing some customers toward competitors. Documents showed Microsoft had limited new cloud service subscriptions in certain key regions across the U.S. and Europe. Microsoft said it is accelerating data center construction.

NVIDIA Corp (NASDAQ: NVDA) CEO Jensen Huang denied that AI infrastructure investments constitute circular financing. Speaking at a Goldman Sachs conference, Huang responded to questions about whether NVIDIA's involvement in financing data center and AI infrastructure projects could be characterized as circular. When asked whether these investments amount to circular financing, Huang said, "I put in a dollar, and $100 comes back to me. Does that count as circular?" He described the deals as a "very clever strategy" that helps NVIDIA establish distribution channels for its technology architecture. Huang stated that NVIDIA's financial support for data center projects and AI infrastructure is not merely a recycling of funds but rather aimed at driving adoption of its architecture in the market.