Trump Says US Won't Attack Iran Before Midterms as Oil Swings in Americas Market Wrap
Key Takeaways
- •President Trump said the US will not attack Iran any time soon and ruled out a strike before the midterm elections, comments that helped crude rebound after an early spike.
- •Arab sources reported several severe explosions in the Strait of Hormuz, a waterway between Iran and Oman that carries a significant share of the world's seaborne oil.
- •OpenAI's run-rate revenue was reported at $50 billion, short of the $70 billion modeled by the Street, creating headwinds for chipmakers and electricity producers and triggering some US dollar selling.
- •US weekly initial jobless claims came in at 197,000 versus 200,000 expected, staying near rock-bottom levels, while Fed and Bank of England officials emphasized further tightening to bring down inflation.
- •WTI crude rose $2.82 to $91.09, gold gained $23 to $4,133, the S&P 500 fell 0.5%, and 10-year yields ended at the day's lows after a $22 billion 30-year bond auction priced at a 5.618% high yield.
US President Donald Trump said the United States will not be attacking Iran "any time soon," adding in a social media post that no strike would occur before the midterm elections, the vote that determines the makeup of Congress. The comments came after oil prices spiked in European trading on reports and remarks about renewed attacks on Iran, and crude bounced following the post, though skepticism about the pledge persisted, according to Investinglive's Americas market news wrap. With single-session swings in crude now being driven by headlines, traders treated the pledge as unconfirmed until events back it up.
Earlier in the session, Arab sources reported that several severe explosions had occurred in the Strait of Hormuz, the waterway between Iran and Oman that carries a significant share of the world's seaborne oil. The developments set a poor tone for markets to start the day.
Economic data
- Atlanta Fed GDPNow Q3 tracker: 3.6%, versus 3.7% prior — the tracker is the Atlanta Fed's running estimate of quarterly growth, updated as data arrive
- US August wholesale inventories: +0.5% versus +0.7% expected
- US weekly initial jobless claims: 197,000 versus 200,000 expected
Central banks
- Bank of England Governor Andrew Bailey: monetary policy needs "an unwavering commitment to returning inflation to target"
- St. Louis Fed President Alberto Musalem: more monetary policy firming will be required
Treasury supply
The US Treasury sold $22 billion of 30-year bonds at a high yield of 5.618%. Long-dated auctions like this one serve as a barometer of demand for US debt at the long end of the curve.
Markets
- S&P 500: down 0.5%
- WTI crude oil: up $2.82 to $91.09
- Gold: up $23 to $4,133
- US 10-year yields: down 5 bps to 5.22%
- CAD leads, USD lags
Equally significant was a report that OpenAI's run-rate revenue — an annualized figure extrapolated from recent months, not booked sales — stands at $50 billion, short of the $70 billion the Street had been modeling. The figure created headwinds for chipmakers and electricity producers and also triggered some US dollar selling, a reminder that AI-related flows have been a substantial part of the dollar's outperformance this year. Further AI-sector disclosures now stand as a variable for both the equity and currency sides of that trade.
Economic data was light overall, but initial jobless claims remained near rock-bottom levels. Federal Reserve commentary continued to emphasize a desire to bring down inflation, underscoring the likelihood of a hike this year and more beyond — keeping upcoming Fed speakers and inflation prints on rate watchers' calendars.
The wrap closed with a final observation: Treasury yields turned around during the session and finished at the lows of the day. "Could it be The Economist marking the top yet again?" the author asked — a nod to the long-running market trope that the magazine's covers tend to coincide with turning points.
