Category: Market News

U.S. equity futures pointed lower on Thursday as crude oil prices extended their recent increase and producer price data showed annual inflation accelerating in August.

U.S. crude futures climbed nearly 5% after rising more than 3% in the previous session, taking prices above $100 a barrel. Brent crude also moved above the $100 level on Wednesday for the first time since July.

The increase in oil prices followed further exchanges between U.S. and Iranian forces. President Donald Trump indicated that the conflict could continue beyond November’s midterm elections.

Separately, the Wall Street Journal reported, citing U.S. officials, that White House advisers had discussed with Trump the possibility that the conflict could continue through the remainder of his presidential term.

Producer Price Inflation Accelerates to 5.4%

U.S. stock futures extended their declines following the release of August producer price data.

The Labor Department said its producer price index for final demand increased 0.4% month on month after a revised 0.1% rise in July. The August increase matched economists’ expectations.

Annual producer price inflation accelerated to 5.4% from 4.8%, exceeding the 5.3% forecast.

The data comes ahead of the Federal Reserve’s monetary policy meeting next week, with investors assessing the implications of higher energy prices and inflation data for interest rates.

“Brent crude pushing above $100 a barrel has had a psychological effect on the market, pushing a hypothetical inflation worry gauge to ‘serious’ status and dragging down financial assets,” said Dan Coatsworth, head of markets at AJ Bell.

“The oil price has now jumped by 28% since early August,” he added. “This type of ascent could leave businesses and consumers feeling sick at the thought of sharp cost increases and potentially higher borrowing costs if central banks choose to fight inflation with interest rate hikes.”

U.S. Indices Close Lower for Third Session

Wall Street’s major indices declined for a third consecutive session on Wednesday, with the Dow closing at its lowest level in more than a month.

The Dow fell 0.8% to 52,380.66, the Nasdaq declined 0.6% to 26,253.34 and the S&P 500 lost 0.5% to 7,636.36.

Retail and networking stocks recorded larger declines, while telecom, housing and transportation shares also moved lower. Oil and gold stocks advanced alongside their respective commodity prices.

TotalEnergies (LSE:TTE) announced an oil discovery in Angola and said it has signed agreements to acquire a 40% operated interest in two exploration blocks in the country.

The French energy company said the Acacia-5 discovery, made in June 2026, is expected to add 6,000 barrels per day of production from Block 17.

TotalEnergies expects the fast-track development to begin producing oil within three months of the discovery.

TotalEnergies Agrees 40% Interests in Exploration Blocks

The company also signed agreements with Angola’s petroleum regulator, Agência Nacional de Petróleo, Gás e Biocombustíveis, to enter Blocks 17/25 and 32/21 in the Lower Congo Basin.

Under the agreements, TotalEnergies will hold a 40% operated interest in each exploration block.

Chief Executive Patrick Pouyanne said Wednesday that TotalEnergies and its partners plan to invest $10 billion in Angola over the next five years.

Genus (LSE:GNS) shares fell more than 7% on Thursday after the animal genetics company reported higher annual profit and announced a £60 million share buyback, while forecasting moderate operating profit growth for fiscal 2027.

For the year ended June 30, adjusted profit before tax increased 35% to £100.2 million from £74.3 million, while adjusted earnings per share rose 35% to 110.3 pence from 81.8 pence.

Group revenue declined 2% to £658.1 million from £672.8 million, which Genus attributed to the deconsolidation of PIC China following its transfer into a joint venture with Beijing Capital Agribusiness.

Adjusted operating profit increased 17% to £94.8 million, while free cash flow rose 52% to £62.0 million. The company received £98 million of net cash proceeds from the sale of a 51% interest in PIC China into the joint venture, and year-end leverage declined to 0.4 times from 1.5 times.

Genus Announces £60 Million Share Buyback

The board proposed a final dividend of 24.0 pence per share, an increase of 11%. The full-year dividend increased 10%, representing its first increase in five years, with a payout equivalent to 32% of adjusted earnings per share.

Genus also announced a £60 million share buyback programme that it expects to complete during fiscal 2027.

For the new financial year, the company expects moderate operating profit growth at both Genus PIC and Genus ABS.

Adjusted profit before tax is expected to be weighted towards the second half, reflecting disease-related issues affecting North American pork production during the first half, low pork prices in Brazil and subdued global dairy prices.

Stifel Maintains Hold Rating

Stifel analysts said adjusted profit before tax of £100.2 million exceeded their £98 million estimate following the July trading update. Adjusted EPS of 110.3 pence was below the brokerage’s consensus estimate of 110.9 pence.

Stifel said the £60 million buyback provides “fair recognition of progress and the PIC China JV ’windfall,’” but added that “market conditions in FY27 appear more challenging, reflected in the c.3% growth outlook, while the lack of clarity around PRP key market timings is understandable but frustrating.”

Based on Genus trading at approximately 22 times earnings and 12 times EV/EBITDA, Stifel said it sees “a stock broadly up with events” and reiterated its “hold” rating.

Gold moved higher on Thursday as a weaker U.S. dollar provided support ahead of inflation figures that could influence market expectations for the Federal Reserve’s next interest-rate decision.

At 02:40 ET (06:40 GMT), spot gold, or XAU/USD, rose 0.4% to $4,418.87 an ounce. Gold futures gained 0.03% to $4,461.82.

Among other precious metals, silver, or XAG/USD, advanced 0.5% to $67.62 an ounce, while platinum, or XPT/USD, fell 0.6% to $1,889.34. The U.S. Dollar Index edged down to 98.74.

The move in gold came as markets continued to assess higher U.S. Treasury yields and developments in the Middle East.

Gold Trades Around $4,400 After July Recovery

Gold has traded around the $4,400 level in recent weeks, having recovered from levels near $4,000 in July.

U.S. 10-year Treasury yields increased after a government plan to purchase as much as $6 billion of longer-dated debt. Rising bond yields can increase the opportunity cost associated with holding gold because the metal does not generate interest income.

Oil prices also remained elevated, with Brent crude reaching $100 a barrel for the first time since July.

The supplied information said the conflict involving the U.S. and Iran had entered its seventh month. Iran has said it is prepared for a more intensive conflict if U.S. attacks on its territory and infrastructure continue.

Inflation Data Could Affect Fed Rate Expectations

Attention is now focused on the U.S. Producer Price Index scheduled for Thursday and the Consumer Price Index due on Friday.

The releases come ahead of the Federal Reserve’s next monetary policy meeting. Swaps markets were assigning an approximately 65% probability to an interest-rate increase this month, according to the supplied information.

Tony Sycamore, senior market analyst at IG, said gold ended the previous session at around $4,402, with the weaker U.S. dollar providing support even as bond yields increased.

Sycamore noted that the metal remained below its 200-day moving average of approximately $4,537. His technical assessment indicated that gold would need to move back above that level to signal an end to the decline from its $4,697 high and a resumption of the broader upward trend.

Technical analysis is an analyst’s interpretation of historical market data and does not establish how prices will move in the future.

Global Gold ETF Holdings Reach Record

Global gold-backed exchange-traded funds recorded $18 billion of inflows in August, their second-largest monthly inflow on record, according to the World Gold Council.

Holdings increased by 121 tonnes during the month to a record 4,189 tonnes. Assets under management rose 16% to $615 billion.

North American funds recorded their third-largest monthly inflow on record, while European-listed gold funds registered their largest monthly inflow, according to the World Gold Council.

Oil prices advanced on Thursday, with Brent crude trading above $100 a barrel as investors assessed the risk of additional supply disruptions following attacks on shipping involving the U.S. and Iran.

Brent crude futures rose 40 cents, or 0.4%, to $101.61 a barrel by 08:14 GMT, while U.S. West Texas Intermediate increased 49 cents, or 0.51%, to $96.54.

Brent has gained nearly 30% from lows recorded in early August. The U.S. and Iran did not reach a permanent agreement to halt attacks, with fighting resuming later that month.

“The recent run-up in prices lays bare the market’s approach: this conflict will last longer than anticipated even a month ago, let alone at the beginning of the summer. If oil supply and exports are diminished, the oil balance remains tight and prices remain elevated,” PVM analyst John Evans said.

Iran Reports Attacks on 10 Ships Near Strait of Hormuz

Iran said it attacked 10 ships near the Strait of Hormuz on Wednesday following the sinking of five Iranian oil tankers by the U.S.

Iran’s Islamic Revolutionary Guard Corps said it would escalate its response if further attacks occurred.

U.S. President Donald Trump, meanwhile, said Washington could strike Iran’s Pickaxe Mountain and urged Tehran to exercise caution. Trump also said the conflict would probably continue beyond the November U.S. midterm elections.

Oil flows through the Strait of Hormuz remain substantially below pre-war levels. Before the conflict, the waterway carried around one-fifth of global oil and gas supplies, according to the supplied information.

Shipping risks have also increased in the Red Sea, where Iran-aligned Houthi militants have stepped up attacks against Saudi Arabia.

Chinese Crude Purchases Increase

In the physical crude market, dated Brent has remained above $100 since September 3, according to LSEG data cited in the supplied information. The benchmark is used to price approximately two-thirds of global oil supply.

China has increased crude purchases in recent weeks following several months of lower demand, ING analysts said. China is the world’s largest crude oil importer.

ING said a continued recovery in Chinese buying could increase the price impact of supply disruptions. A reduction in Chinese imports, by contrast, could moderate upward pressure on the market, according to the analysts.

“For months the bearish case rested on soft Chinese demand as a reliable dampener. That dampener was never structural. It was a drawdown, a buffer being spent, and buffers empty,” said David Jorbenaze, global oil market lead at commodities information provider ICIS.

The future direction of crude prices remains subject to changes in supply and demand, including the extent of shipping disruptions and Chinese purchasing activity. Analyst forecasts and assessments cited in the article represent their respective views rather than established outcomes.

European equities moved slightly higher in early trading on Thursday as investors awaited the European Central Bank’s interest-rate decision later in the day.

The pan-European STOXX 600 gained 0.1%, following a 1.4% decline on Wednesday that left the index at its lowest closing level since late July.

Markets in Frankfurt, Paris and London were little changed as investors monitored monetary policy expectations alongside higher energy prices. Brent crude remained above $100 a barrel.

Markets Price In 25-Basis-Point ECB Rate Increase

Money markets had almost fully priced in a 25-basis-point interest-rate increase from the ECB, which would take its deposit facility rate to 2.50%.

Expectations have changed from several weeks earlier, when markets largely anticipated that the central bank would leave rates unchanged.

The change has coincided with higher oil prices following military developments in the Middle East, including attacks involving oil tankers and regional infrastructure in the Persian Gulf.

Higher energy prices can increase costs for European manufacturers, transport operators and consumers, adding to inflationary pressures.

Preliminary Eurostat data showed annual Eurozone inflation rising to 3.3%, with energy prices increasing 14.3%.

Investors Await ECB Economic Projections

Eurozone inflation remains above the ECB’s 2% target, with investors awaiting comments from ECB President Christine Lagarde following Thursday’s policy announcement.

With a 25-basis-point increase largely reflected in market pricing, attention is also focused on the ECB’s updated staff macroeconomic projections, including its inflation forecasts for 2027.

The projections and Lagarde’s press conference could provide further information about how policymakers assess the outlook for interest rates. The ECB had not announced its decision at the time covered by the supplied information.

U.S. Inflation Data Due Friday

Investors are also awaiting Friday’s U.S. Consumer Price Index report.

The inflation figures will be the final major U.S. economic data release cited in the supplied information ahead of the Federal Reserve’s policy meeting on 15-16 September.

The data could affect market expectations for U.S. monetary policy, although the outcome of the Federal Reserve meeting remains subject to policymakers’ decision.

European and British wholesale natural gas prices remained near multi-year highs on Thursday following gains in the previous session, as investors monitored the potential impact of the Persian Gulf conflict on global energy supplies.

The benchmark Dutch front-month gas contract rose 0.5% to €79.64 per megawatt-hour, remaining close to the highest level since 2023 reached on Wednesday.

In Great Britain, the equivalent NBP wholesale gas contract gained 0.6% to 198.00 pence per therm, near its highest level since late 2022.

Strait of Hormuz Risks Remain in Focus

The latest moves followed further military developments in the Middle East. Iranian-backed Houthis in Yemen launched coordinated attacks on several cities in Saudi Arabia, according to the supplied information.

The escalation followed U.S. strikes on Iranian oil tankers and a subsequent Iranian missile attack on a U.S. military base in Jordan.

The conflict has increased uncertainty surrounding maritime traffic through the Strait of Hormuz. Approximately 20% of global liquefied natural gas traffic passes through the waterway, with Qatar accounting for a substantial proportion of those shipments.

Crude oil was trading above $100 a barrel, while the possibility of restrictions on Persian Gulf shipping has increased attention on competition between European and Asian buyers for available LNG cargoes from the Atlantic basin.

European Gas Storage Around 62% Full

The supply uncertainty comes as Europe approaches the end of its summer gas storage injection period.

According to Gas Infrastructure Europe data cited in the supplied information, European underground storage facilities were approximately 62% full.

That level was around 17 percentage points below the five-year seasonal average.

Storage levels and the availability of LNG imports are among the factors affecting European gas supply ahead of the winter period.

ECB Rate Decision Due

Higher energy costs also form part of the economic backdrop to the European Central Bank’s monetary policy decision later on Thursday.

Money markets had almost fully priced in a 25-basis-point interest-rate increase, which would take the ECB’s deposit facility rate to 2.50%.

Investors will also be monitoring comments from ECB President Christine Lagarde and the Governing Council for information about the outlook for monetary policy.