SPX: S&P 500 Futures Slip as Oil Prices, Inflation Data Keep Traders on Edge

Wall Street returns from its long weekend to higher crude, elevated Treasury yields and a newly revived Fed-hike trade.

📉 Wall Street returns cautiously

• S&P 500 futures slipped around 0.1% Tuesday before the first cash-market session since Friday. The benchmark previously fell 0.4% to 7,718.41, while the Dow lost 0.5% and the Nasdaq declined 0.3%.
• Friday’s pressure followed an unexpectedly strong jobs report. The US added 162,000 positions in August, nearly triple the 56,000 forecast, while unemployment held at 4.1%.
• June and July payrolls were also revised higher by a combined 55,000, replacing labor-market anxiety with interest-rate anxiety remarkably efficiently.
• Traders now price around a 60% probability that the Federal Reserve raises rates by a quarter-point next week. The ten-year Treasury yield held near 4.79%. Higher yields offer investors more return from bonds.

🛢️ Oil brings another inflation warning

• Brent crude rose for a third session to roughly $97.40, with WTI above $92. Iran warned that Gulf energy infrastructure could be attacked following retaliatory strikes involving American and Iranian vessels.
• Goldman Sachs raised its year-end forecasts for Brent and WTI by $5. Energy shares may benefit from higher prices, but the broader S&P 500 faces a less cheerful equation: rising fuel and transportation costs can squeeze corporate margins, weaken consumer spending and make the Fed more willing to tighten.
• Asian markets offered a mixed handover. South Korea’s Kospi gained around 1.2% and the broader Asia-Pacific index added 0.2%, while Australia fell 0.6%.
• Japan’s Nikkei struggled with a sharply stronger yen, which reduces the value of overseas earnings when exporters convert them back home.

📊 Inflation gets the deciding vote

• US producer-price inflation arrives Thursday, followed by CPI on Friday. Hot readings would reinforce the case for a September hike and could pressure rate-sensitive sectors.
• Softer inflation may lower yields and revive the rally, although crude nearing $100 makes declaring victory over price pressures increasingly ambitious.
• Cross-asset markets remain surprisingly composed. The US dollar index fell 0.4% to a two-week low near 98.80, helping gold rebound toward $4,430 and Bitcoin remain above $80,000.
• Apple’s product event Wednesday adds a major corporate catalyst, with its first foldable iPhone potentially joining the new lineup. The ECB is then expected to raise rates Thursday.