Morning in New York: Brent Puts Investors to the Test

A daily review and forecast of events in the U.S. stock market by Mikhail Denislamov, Deputy Director of Capital Markets Research at Freedom Broker.

Today’s macroeconomic calendar does not include any significant releases, so the direction of trading will be driven by movements in oil prices and corporate news. WTI is trading near its highs since the start of summer, driven by the escalation of the conflict in the Middle East. Prices have been supported by Houthi strikes on Saudi Arabian cities, Iran’s attack on a U.S. base in Jordan, and the U.S. destruction of five more Iranian oil tankers. The price of Brent has risen by about 25% since the beginning of August, coming very close to the psychologically significant $100 mark.

The Treasury’s auction of $39 billion in 10-year Treasuries, scheduled for 1:00 p.m. Eastern Time (ET), deserves special attention. Yesterday, the United Kingdom issued its 30-year bonds at the highest yield since 1998. Weak demand at the long end of the yield curve is putting pressure on growth stocks.

The main corporate event of the day will be Apple’s (AAPL) presentation, which begins at 1:00 p.m. ET and will be led for the first time by new CEO John Turnus. The event is expected to feature the unveiling of the iPhone 18 Pro and Pro Max, the company’s first foldable smartphone, as well as updated Apple Watch and AirPods models. AAPL shares typically rise in the run-up to the company’s September presentation and correct immediately afterward. This time, however, the stock has lost more than 3% over the last two trading sessions, which may signal that investor expectations are low.

Before the market opens today, Chewy (CHWY), Academy Sports + Outdoors (ASO), Core & Main (CNM), Signet Jewelers (SIG), and SailPoint (SAIL) will report their earnings. After the close of regular trading, American Eagle Outfitters (AEO), AeroVironment (AVAV), and Cooper Companies (COO) will report their quarterly results.

U.S. index futures are trading slightly lower. We assess the risk balance for the upcoming session as neutral, with moderate volatility. The market is currently absorbing the rise in oil prices, but the geopolitical backdrop appears unstable, and demand at the 10-year Treasury auction will indicate whether the long end of the yield curve will be a driver for stocks. With Apple’s presentation underway, the technology sector will be in the spotlight.

— ServiceTitan (TTAN) shares plummeted 20%, even though its earnings beat consensus estimates and revenue rose 21%. Market participants were disappointed by the sales guidance for the current quarter, which came in slightly below average expectations. In addition, transaction volume growth slowed. News of the company’s new chief commercial officer put additional pressure on the stock price.

— Braze (BRZE) shares are down 12% following the release of its quarterly report, which reported revenue of $227.2 million, compared to a consensus estimate of $220.4 million. Revenue growth slowed from 30.2% to 26.2%, and the third-quarter earnings per share (EPS) guidance of $0.13–0.14 fell short of FactSet’s consensus estimate of $0.16.

— Casey's General Stores (CASY) shares are down 8.5%, even though its adjusted EPS came in at $7.37 versus a consensus estimate of $6.82, thanks to fuel margins. At the same time, the company provided a cautious full-year guidance for same-store sales growth in the range of 2–5%. The market viewed the results as mixed: questions arose regarding the quality of earnings amid rising oil prices.

— Chime Financial (CHYM) shares are rising by about 9% on the back of improved quarterly and annual forecasts, as well as the announcement of a $590 million all-cash acquisition of Stride Bank. The deal shifts card issuance from a partner-based model to an in-house model, giving the company control over the product’s economics and reducing its reliance on third-party banks.

— Ingram Micro (INGM) shares are down 6% following the announcement of a stock offering. The market typically reacts negatively to the prospect of a dilution of existing shareholders' stakes.

— Target Hospitality (TH) shares are down 7% on news of an upcoming secondary offering of its equity securities.

Trading on U.S. stock markets on September 8 ended in negative territory. The S&P 500 fell 0.58%, the Nasdaq-100 dropped 0.32%, the Russell 2000 lost 0.52%, and the Dow Jones fell 1.18%.

The negative trend was driven by the escalation of the U.S.-Iran conflict: the Houthis attacked Saudi Aramco oil facilities, and the U.S. struck Iranian tankers off the coast of Khark Island. Against this backdrop, intraday Brent prices rose to $99.46, and energy stocks led the gains (+1.02%). The defensive utilities sector also outperformed the market (+0.85%). The underperformers included the healthcare sector (XLV: −2.55%), the financial sector (XLF: −1.43%), and materials suppliers (XLB: −0.91%).

The negative trend was driven by the performance of shares in the largest corporations. Nvidia (NVDA: −2.01%) dragged the broad market index down by about 17 basis points. Apple (AAPL: −1.17%) and Microsoft (MSFT: −1.15%) contributed 9 and 7 basis points, respectively, to the decline. Of the “Magnificent Seven,” only Tesla (TSLA: +3.98%) remained in positive territory.

The decline in the healthcare sector was driven by a plunge in Novartis (NVS: −12%) shares, for which this Tuesday’s trading session marked its worst performance since March 2020. This was due to disappointing results from the Phase III del-desiran trial. The S&P 500 was also affected by Amgen (AMGN: −10.08%), a component of the index, whose stock price plummeted on concerns regarding one of its drugs, which has a mechanism of action similar to that of del-desiran. The pullback in Stryker (SYK) shares was driven by ongoing challenges in the peripheral vascular and endoprosthetics product segments. Boston Scientific (BSX) shares reacted negatively to a warning that the company might not meet its 2026 targets due to a cyber incident.

Certain companies in the IT sector showed the strongest positive momentum. Broadcom (AVGO: +2.98%) contributed about 7 basis points to the S&P 500. Intel (INTC: +9.05%) and AMD (+5.9%) also provided support to the index. Qualcomm (QCOM: +3.17%) shares reacted positively to news of a partnership with AWS to build data center infrastructure. At the same time, software companies were hit by heavy selling: the sector-specific IGV ETF fell nearly 2%.

The investment community interpreted the macroeconomic data as a sign of heightened stagflation risk. The National Federation of Independent Business (NFIB) Small Business Optimism Index for August fell from 99.8 points to 98.7. According to a survey by the Federal Reserve Bank of New York, the public’s inflation expectations for the same month remained at 3.6%, with unemployment forecasts at their highest level since April 2020.

The main takeaway from the session was that, first, the three largest stocks in the S&P 500 accounted for 33 basis points of its 58-basis-point correction. Second, the AI sector is not trading as a unified bloc, and divergence is evident among chipmakers’ stocks, not just in the share prices of hardware manufacturers and software developers. Third, narrow and uneven leadership amid rising oil prices leaves the market vulnerable ahead of the release of the August Consumer Price Index (CPI).

This article was AI-translated and verified by a human editor