US EQUITY OPEN: Stocks open higher with yields little changed and crude off highs

OPEN: Stocks have opened in the green, with the Russell leading the way, although gains are broad-based elsewhere. The majority of sectors trade higher, led by Materials, Energy and Financials, while Utilities is the only sector in negative territory and Consumer Staples and Consumer Discretionary trade around flat. Note, it is OpEx today, which could generate some additional volatility, particularly amid quieter summer trading conditions.

US data saw the release of the August S&P Global Flash PMIs, with Manufacturing slipping slightly below expectations, while Services unexpectedly rose, helping the Composite PMI tick higher.

Crude prices are firmer, albeit off session highs, after Iranian President Pezeshkian spoke in favour of ending the war, arguing that Iran should do so now that it is in a position of strength.

US Treasury yields are little changed across the curve, albeit firmer by around 1-2bps, with the 30-year yield trading around 5.26%. Long-end yields therefore remain elevated but below the peaks seen before the Treasury's long-end buyback announcement earlier this week.

In FX, the Dollar is softer, with the move potentially aided by the more conciliatory comments from Pezeshkian, while the Antipodeans outperform after China's Vice Finance Minister pledged additional fiscal policy measures. The China-related optimism is also supporting gold and copper.

• Ross Stores (ROST): Quarterly earnings and revenue beat expectations and raised FY profit guidance, supported by strong comparable sales, customer traffic and demand for discounted apparel
• BJ's Wholesale Club (BJ): EPS and revenue beat; raised FY26 profit view
• OSI Systems (OSIS): Q4 revenue missed; FY27 guidance disappointed Broadcom (AVGO)-backed SPV tapping debt market for USD 70bln to support AI buildout, reports CNBC TV.

This is a market-colour wrap rather than a discrete event, and open snapshots of this kind historically carry less signal than their breadth suggests: early leadership from cyclicals and the Russell alongside softer defensives is the classic pro-risk opening mix, but the first half-hour on an OpEx session is a poor read on the session's close, since expiry flows and thin summer liquidity have repeatedly exaggerated moves that fade once the pin risk settles. The more durable threads are the cross-asset ones: a softer dollar on conciliatory Iranian rhetoric fits the established pattern of geopolitical premia being priced in and out of crude and the dollar in tandem, and such verbal de-escalation episodes have tended to see the risk premium leak out gradually unless physical supply is actually affected. The long end holding below the peaks seen before the buyback announcement is the tell that sovereign supply operations, rather than data, have been the recent driver at the back of the curve, and the PMI mix, soft manufacturing against firm services, is the familiar two-speed configuration that has historically left rate pricing unmoved. The China fiscal pledge lifting Antipodeans and copper is a recurring sequence in which initial enthusiasm has often outrun the follow-through on actual measures. The large AI-linked debt financing is worth noting as part of a widening pattern of credit-market funding for the buildout theme.