US EQUITY OPEN: Stocks open with marginal gains as crude falls on US/Iran diplomacy hopes

US EQUITY OPEN: Stocks opened with marginal gains on Tuesday, adding to Monday's rally. The Russell outperforms so far, while the equal-weight S&P is also up 0.3%. Sectors are mixed, with Consumer Staples, Communication Services and Materials outperforming, while Energy, Utilities and Health Care lag. Energy stocks are tracking crude prices lower.

Crude prices are lower amid hopes for US/Iran diplomacy and signs of supply returning. Reports suggested a senior Iranian official said Tehran welcomes a revival of diplomacy if the US takes steps, while separate reports suggested Iran could reopen the Strait within seven days if the US eases military pressure and lifts the blockade, although the latter report was subsequently denied by Iran. Also adding to the downside were reports that Saudi Arabia has restarted the East-West oil pipeline and is preparing to resume crude exports from Yanbu later today. Meanwhile, US President Trump reportedly told advisers he would like to meet Iranian officials if conditions are right.

The pressure in crude has coincided with marginally lower Treasury yields, although moves are limited to around 1bp across the curve, with recent hawkish Fed commentary from Monday perhaps helping keep yields elevated.

Meanwhile, in FX, the Kiwi outperforms following hawkish commentary from RBNZ's Breman, who said near-term inflation expectations are expected to be somewhat higher if elevated oil prices persist. The remarks are supporting NZD, while AUD lags amid AUD/NZD flows.

Gold, silver and Bitcoin prices are marginally lower.

Attention turns to remarks from US President Trump and any following updates at the UNGA, particularly on geopolitics.

STOCK SPECIFICS

• Alibaba Group (BABA): Unveiled Zhenwu V900 chip, which it says is the most powerful in China, with three times the performance of its predecessor
• Viking Therapeutics (VKTX): VK2735 showed positive weight maintenance and favourable tolerability in a 12-week maintenance study
• Vicor Corporation (VICR): Raised Q3 sequential growth guidance to more than 20% from nearly 10%
• Circle Internet Group (CRCL): Entered an expanded strategic partnership with Binance
• On Holding (ONON): Targets high-teens constant-currency sales growth through 2029; authorised first share buyback of up to USD 1bln
• Valero Energy (VLO) / Marathon Petroleum (MPC): Downgraded at Jefferies to 'Hold' from 'Buy'
• Ericsson (ERIC): Downgraded at Morgan Stanley to 'Underweight' from 'Equal Weight'
• GameStop (GME): CEO Ryan Cohen acquired 1.15mln shares on September 21st at USD 22.9375/shr
• Grab Holdings (GRAB): CEO Anthony Tan purchased 10.4mln shares on September 21st for USD 29.9mln
• Salesforce (CRM): Director David Kirk purchased 4,176 shares on September 18th for a total of USD 999.5k