Oil is above $90.

The US 10-year Treasury yield is near 4.80%.

Markets now see roughly a two-thirds chance of a September Fed rate hike.

That combination is already hitting stocks and bonds.

Oil Pushes Rates and Markets Lower

WTI closed above $90, while Brent traded near $95 after renewed US strikes on Iranian targets.

The Dow fell 0.79%. The S&P 500 fell 0.71%. The Nasdaq fell 1.03%.

Higher oil can mean more inflation pressure. That makes easier rate policy harder.

The US 10-year Treasury yield reached roughly 4.80%, its highest level since early 2025. The 30-year yield traded around 5.21%.

Markets now price roughly a two-thirds chance of a 25 basis point Fed rate hike in September. That probability is up sharply from a week earlier.

Inflation Supports the Rate Debate

Euro area flash inflation rose from 2.9% in July to 3.3% in August. Energy prices increased 14.3%.

US manufacturing remained in expansion, but slowed. The August ISM Manufacturing PMI fell from 55.6 to 54.6, below roughly 55.2 expected. Its prices index stayed high at 71.1.

The labor market added less pressure. July job openings were little changed at 7.271 million. Hires, quits, and layoffs were also little changed.

Officials are pushing back against the market's view.

Scott Bessent said that traditionally, “you don’t raise into a supply shock.” Donald Trump called interest rates “too high.”

For now, markets are still leaning toward a hike.

Higher Yields Create Global and Fiscal Pressure

Global bond yields returned to their highest level in almost two decades.

Japan's 10-year government bond yield reached 3%, its highest since 1996, after Bessent signaled that Washington wants the Bank of Japan to raise rates more aggressively.

Higher yields also matter for government finances.

US annual interest expense has reached a record $1.25T. That equals 18.5% of federal government revenue.

The Oil Map Is Moving

Venezuela granted North American Blue Energy Partners 100-year concessions covering 17 oil fields. The company plans to invest up to $100B in Venezuelan oil infrastructure.

Reuters reported that some of those fields were previously controlled by several Chinese companies and a Russian firm.

Bloomberg reported that an $80B fuel trade has shifted from eastern India to the Panama Canal. The changed route has become a measure of the Iran war's energy shock.

Trump said ships were averaging about 30 departures per night from the Strait of Hormuz.

All of this sits inside the same unresolved question driving inflation, yields, and stocks: does oil stay near these levels?

Nvidia Sits Across the AI Deal

The Wall Street Journal reported that Anthropic signed a $35B cloud deal with Nvidia-backed Lambda.

Hut 8 is building the Texas data center. Nvidia holds the lease and secured the capacity. Lambda will buy Nvidia chips for the site. Nvidia is also an investor in Lambda.

Nvidia is tied to the cloud provider and the data center capacity behind the deal, not only the chip sales.

Retail investors bought roughly $250M of Nvidia shares on Wednesday. That extended their buying streak to 15 consecutive trading sessions and more than $2.5B.

China's CXMT has reportedly started small-scale HBM3E production. It faces low yields and remains roughly 3 to 5 years behind the leading HBM producers.

Tesla's Cybercab Event Still Has Unanswered Questions

Tesla rose 5% before the Cybercab Launch Event.

Investors are looking for timing, fleet size, city expansion, and cost-per-mile economics.

One author predicts deployments involving hundreds of Cybercabs in Austin, Dallas, Houston, Las Vegas, and other cities. The author also expects financial details, the unboxed manufacturing process, and a Robovan update.

Those are predictions, not announced deployment plans.

Tesla led options activity with 4.4M contracts. Nvidia followed with 3.3M.

Company Risks and Earnings Moves

The FTC and 22 states are reportedly preparing to sue Amazon over alleged secret advertising price increases that generated tens of billions of dollars over seven years.

BofA reiterated a Buy rating on Meta with an $810 price target. It cited a potential early September launch of the Hatch consumer AI agent and a reported October launch target for the Watermelon AI model.

Take-Two fell 7% as reported GTA 6 leaks continued before the November 19 release.

Dell's implied earnings move is plus or minus 10.4%. Its last three reactions were up 32.8%, 21.9%, and 5.8%.

Palo Alto Networks' implied move is plus or minus 9.3%. Its last three reactions were down 5.6%, 6.8%, and 7.4%.

Cheap Stocks Can Keep Falling

Vistra trades at 13 times earnings. Constellation Energy trades at 22 times.

But their power fleets are different.

Vistra generates roughly 25% of its power from nuclear and 20% from coal. Constellation generates around 60% from nuclear and has no coal exposure.

The source argues that Constellation's scarce nuclear assets and longer-term contracts deserve a premium. It also argues that the current valuation gap is too wide.

Beaten-down consumer stocks show the same problem.

Nike has fallen 75% over five years, from a little above 177 to below 40. Lululemon trades at one-quarter of its previous level, while Michael Bur points to a P/E ratio of 10, buybacks, and its brand.

PayPal was described as cheap at 180, 90, and 60. Then it fell into the 40s.

A falling share price does not tell us where the bottom is. The speaker focuses on the value being purchased while accepting that the bottom cannot be known in advance.

Shein Falls in Its Hong Kong Debut

Reuters reported that Shein shares fell 8% on their first day of Hong Kong trading.

Investors were concerned about setbacks that delayed the listing and weakened its competitive advantages. Shein was once valued at $100B.

September Views Split

September finished higher in 40% of US midterm election years since 1854.

Tom Lee still thinks September could be strong. He expects the jobs report, August CPI, and the September Fed decision to show weakening inflation. He says that could take the probability of a September rate hike to zero.

Scott Rubner sees more near-term risk. Earnings are behind the market. Retail buying has historically weakened in September. Systematic exposure has rebuilt. Buybacks will fade as blackout windows return. The large decline in volatility has already happened.

Rubner would use market strength to reduce exposure and add inexpensive protection. He is looking for a tactical reset, not a broader bearish turn.

Lee points to crypto as the counterexample. He says crypto rallied 30% after a similar setup and has historically led the S&P by roughly a month. He believes the equity bottom might already be here.

China, Taiwan, and VIE Risk

Chinese equities come with a different kind of uncertainty.

One speaker says 80% of Nvidia's chips are made in Taiwan. In his view, a conflict would reach far beyond Chinese shares.

He believes nothing should happen, but allows for skirmishes and preserves the uncertainty.

Foreign investors hold contractual interests in Chinese internet companies through Cayman variable interest entities. They do not directly own the operating companies.

The speaker says these structures have had no issues for 20 years. But nobody knows what will happen over the next 20 to 40 years.

For the wider market, the immediate unresolved question is still oil. Whether it stays near these levels remains central to the inflation and rates problem already hitting stocks and bonds.