US EQUITY OPEN: Indices see pressure as oil rallies; mixed US PPI sees little reaction

OPEN: US indices saw weakness at the open, with wider market moves dominated by the upside seen in the crude complex which is firmer by c. USD 3.70/bbl, at the time of writing, with WTI briefly reclaiming USD 100/bbl. While there has been the ECB and a pretty mixed US PPI report, the primary driver is escalating concerns surrounding the Houthis and the Bab al-Mandeb Strait. The rise in crude is exacerbating inflation concerns, driving global yields higher and supporting the Dollar, while weighing on equities and gold. As such, yields are surging, with the US 30-year lifting to 5.34%, its highest level since 2007. Given this, the Dollar is also rallying to the detriment of G10 FX peers, with Antipodeans underperforming given the soured risk sentiment. Precious metals are lower, but spot silver is seeing greater losses than its counterpart. US sectors are seeing a downside bias as Materials lag due to copper names seeing notable pressure as the US admin is yet to decide on refined copper tariffs amid concerns that higher prices could raise manufacturing costs. Consumer Staples sits at the top of the pile. The calendar ahead sees the weekly EIA data, existing home sales, the US 30-year bond auction, the 10-20year Treasury buyback operation, and Oracle (ORCL) and Adobe (ADBE) earnings after hours.

STOCK SPECIFICS:

• US admin is reportedly yet to decide on refined copper tariffs amid concerns that higher prices could raise manufacturing costs. Of note for FCX, TECK, SCCO.
• Cooper Companies (COO): Rev. missed; lowered FY26 outlook and Q4 guide was light.
• AeroVironment (AVAV): EPS & rev. beat
• Macy's (M): FY26 rev. outlook missed
• Centrus Energy (LEU) announced class A common stock & warrant offering
• Tenable (TENB) to offer USD 650mln of convertible senior notes due 2031