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German Stocks Close Higher; Eurozone Inflation Rises

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German shares ended Thursday's trading in the green, with the blue-chip DAX index up 0.77%, following the release of the latest eurozone inflation print.

According to final data from Eurostat, the euro area's annual inflation rate rose to 3.2% from 2.9% in July, below the flash estimate. Meanwhile, the core rate, which excludes energy, food, alcohol and tobacco, came in at 2.4%, consistent with the initial reading and lower than the previous month's 2.5%. The highest contributors for the month were services, followed by energy, non-energy industrial goods, and then food, alcohol and tobacco.

On the geopolitical front, trade tensions were in focus after US President Donald Trump threatened to impose trade restrictions and "very serious tariffs" following European Commission President Ursula von der Leyen's proposal to make Canada the bloc's first "associate member." Trump warned of swift retaliation if the move is deemed hostile toward the US.

Meanwhile, the European Commission adopted the EU Kids Act, proposing a total social media ban for children under 13 and requiring parental supervision via "mini accounts" for those between the ages of 13 and 15. The draft legislation aims to hold technology providers, including social media, video, gaming, and artificial intelligence platforms, legally responsible for ensuring their services are safe by design for minors.

In corporate news, Bayer (BAYN.F) climbed 0.47% after announcing that it secured US Food and Drug Administration approval for Kerendia, or finerenone, to treat adults with chronic kidney disease linked to type 1 diabetes, marking the third approved indication for Kerendia in the US. The German life science company said the approval was backed by positive data from its phase 3 Fine-One study.

Deutsche Bank Research raised its price target for Porsche AG's (P911.F) buy-rated stock to 55 euros from 45 euros, saying the German automaker's capital markets day on Oct. 7 arrives at a "pivotal moment."

"After years of declining China volumes, weaker-than-expected [battery electric vehicle] execution and repeated earnings downgrades, investors are looking for evidence that management has a credible plan to rebuild value creation through factors largely within its own control. We expect the CMD to focus on five key pillars: 1) premiumization & portfolio simplification, 2) productivity improvements and 3) rightsizing the organization, 4) stronger capital efficiency and free cash flow generation, 5) supporting increased shareholder returns," the research firm said. Porsche AG ended the trading session 4.42% higher on Xetra.

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Asia Markets

Update: US Equity Indexes Fall, Treasury Yields Jump as Fed Raises Interest Rates for First Time in Over Three Years

(Updates with index/price moves, Fed policy statements, and geopolitical news from the first paragraph.)US equity indexes fell after the Federal Reserve unanimously raised interest rates for the first time in more than three years and forecast another move up of the same magnitude this year, sending government bond yields higher.The Dow Jones Industrial Average dropped 1.2% to 51,461.90, the S&P 500 declined 0.5% to 7,551.81, and the Nasdaq Composite slipped less than 0.1% to 25,978.43 on Wednesday. Energy and financials led decliners, with all but three sectors in the red.The Federal Open Market Committee raised the target range for federal funds to 3.75% to 4.00% following a 12-0 vote. This marks the first rate increase since 2023, according to Stifel Securities.Median expectations in the Summary of Economic Projections now show a further rate increase this year, as the median outlook was adjusted to 4.1% from 3.8% in the earlier June update. The SEP indicated an upward revision to inflation forecasts for 2026, with the personal consumption expenditures, or PCE, price index unlikely to fall to the Fed's 2% goal until 2029."After more than five years of significantly elevated inflation, a period which included a rate-cutting cycle, the new Warsh Fed appears to be taking a step in the right direction to combat dangerously high price pressures," Lindsey Piegza, chief economist at Stifel, said in the note. "Furthermore, with the latest SEP signaling the majority of Fed officials support some further policy firming by year-end, the Committee appears sincere in its commitment to restore price stability."Meanwhile, retail sales grew 1.2% in August following a 0.5% decline in July, the Census Bureau said. The consensus was 0.8% in a Bloomberg-compiled survey. Sales at gasoline stations jumped 3.1% after falling 0.2% the month before, while motor vehicle and parts dealers' receipts rose 0.6% following a 1.8% drop."Retail sales roared back to life in August following a disappointing performance in July," Ksenia Bushmeneva, economist at TD Economics, said in a report. "Stronger results in the volatile auto and gasoline categories, along with a rebound in online sales, played a role but were not the whole story, given the broad-based gains in core sales."US Treasury yields advanced after the Fed policy decision, turning the corner from earlier in the day. The 10-year yield climbed 2.4 basis points to 5.02%, its highest since 2007. The two-year yield soared 7.1 basis points to 4.73%, the strongest level in about three years.Oil prices fell after reports that Saudi Arabia was offering additional crude cargoes through Oman eased some concerns about Middle East supply disruptions, according to Reuters. Saudi Arabia is facilitating crude oil loadings to Asian refiners via ship-to-ship transfers off Oman's Sohar port, people familiar with the matter told Reuters.Excluding inventories in the Strategic Petroleum Reserve, US commercial crude oil stocks fell by 600,000 barrels after a 400,000-barrel decline in the previous week, versus the 1.5-million-barrel drop expected in a survey compiled by Bloomberg.The front-month US West Texas Intermediate crude oil contract sank 3.6% to $101.99 per barrel, and the global benchmark North Sea Brent slid 3.1 to $105.39 per barrel.Gold futures fell 0.7% to $4,303.6, and silver futures rose 0.6% to $66.46.J.B. Hunt Transport Services (JBHT) expects earnings from Q2 to Q3 to fall 5% to 10%, Chief Financial Officer Brad Delco said Tuesday on a conference call. The company faced "one of the most acute changes in the cost of purchased transportation," with intra-quarter spot rates rising 30%, Delco said. Shares sank 13%, among the worst performers in the S&P 500.

Dow JonesNasdaq CompositeS&P 500$JBHT
Asia Markets

Update: US Equity Indexes Mixed as Fed Almost Certain to Tighten Monetary Policy, Crude Oil Slumps

(Updates with index/price moves, macroeconomic data, and company/geopolitical news from the first paragraph.)US equity indexes traded mixed ahead of a likely interest-rate increase from the Federal Reserve later on Wednesday.The Nasdaq Composite rose 0.7% to 26,152.2, the S&P 500 climbed 0.3% to 7,609.5, and the Dow Jones Industrial Average was little changed at 52,121.8 after midday. All sectors except energy and financials advanced. Technology and industrials led gainers.Ahead of the Fed's policy announcements on Wednesday, including an update of the Summary of Economic Projections, interest rate traders are now pricing in a 93% probability that the central bank will raise its target rate by 25 basis points, up from 33% a month ago, according to the CME FedWatch tool. The remaining likelihood is that the Federal Open Market Committee will extend its pause.The Fed should raise rates, as that has never been the question, according to a note from Stifel."The real question is: Will they? And will they continue hiking?," Lindsey Piegza, chief economist at Stifel, said in the note. "The Committee may be poised to hike this afternoon, but the telltale sign of conviction to tackle inflation - as opposed to a one-time token increase - will be a willingness to follow through with additional hikes into year-end."Retail sales grew 1.2% in August following a 0.5% decline the month before, the Census Bureau said Wednesday. The consensus in a Bloomberg-compiled survey was for a 0.8% increase last month. Sales at gasoline stations jumped 3.1% in August after falling 0.2% the month before, while motor vehicle and parts dealers' receipts rose 0.6% following a 1.8% drop."Retail sales roared back to life in August following a disappointing performance in July," Ksenia Bushmeneva, economist at TD Economics, said in a report. "Stronger results in the volatile auto and gasoline categories, along with a rebound in online sales, played a role but were not the whole story, given the broad-based gains in core sales."US Treasury yields, however, retreated ahead of the policy decision. The 10-year yield dropped 4.3 basis points to 4.95%, declining from its highest since 2007. The two-year yield slumped 5.3 basis points to 4.61%, after touching multi-year highs this week.Saudi Arabia said a drone launched by the Houthis towards Mecca was intercepted, while the Iran-aligned militia group denied targeting the holy site, calling the accusation a "nauseating lie," Al Jazeera, a Middle Eastern broadcaster, reported Wednesday. The Houthis said they targeted oil facilities in Saudi Arabia's Yanbu port and Khamis Mushait airbase, the news report said, adding that Riyadh has not commented on the claims.The front-month US West Texas Intermediate crude oil contract sank 3.1% to $102.56 per barrel, and the global benchmark North Sea Brent slid 2.7 to $105.86 per barrel.Gold futures jumped 1.3% to $4,389.5, and silver futures rose 1.8% to $65.01.J.B. Hunt Transport Services (JBHT) expects earnings from Q2 to Q3 to fall 5% to 10%, Chief Financial Officer Brad Delco said Tuesday on a conference call. The company faced "one of the most acute changes in the cost of purchased transportation," with intra-quarter spot rates rising 30%, Delco said. Shares sank 13%, among the worst performers in the S&P 500.

Dow JonesNasdaq CompositeS&P 500$JBHT
Asia Markets

Exchange-Traded Funds Rise, US Equities Mixed After Midday

Broad Market IndicatorsBroad-market exchange-traded funds IWM and IVV were higher. Actively traded Invesco QQQ Trust (QQQ) added 0.8%.US equity indexes traded mixed ahead of a likely interest-rate increase from the Federal Reserve later on Wednesday.EnergyIShares US Energy ETF (IYE) and the State Street Energy Select Sector SPDR (XLE) fell about 1.9% each.TechnologyThe State Street Technology Select Sector SPDR ETF (XLK) rose 1%; iShares US Technology ETF (IYW) gained 0.8%, and iShares Expanded Tech Sector ETF (IGM) was up 0.8%.The State Street SPDR S&P Semiconductor (XSD) rose 1.2%, and iShares Semiconductor (SOXX) added 1.9%.FinancialThe State Street Financial Select Sector SPDR (XLF) dropped 0.7%. Direxion Daily Financial Bull 3X Shares (FAS) declined 2.3%, and its bearish counterpart, Direxion Daily Financial Bear 3X Shares (FAZ), gained 2.2%.CommoditiesCrude oil lost 3.1%, and the United States Oil Fund (USO) was down 3.1%. Natural gas shed 0.8%, and the United States Natural Gas Fund (UNG) moved 1.9% lower.Gold on Comex rose 2.9%, and the State Street SPDR Gold Shares (GLD) increased 1.1%. Silver was up 1.9%, and iShares Silver Trust (SLV) gained 1.1%.ConsumerThe State Street Consumer Staples Select Sector SPDR (XLP) was up 0.2%. The Vanguard Consumer Staples ETF (VDC) added 0.3%, and iShares Dow Jones US Consumer Goods (IYK) rose fractionally.The State Street Consumer Discretionary Select Sector SPDR (XLY) was up 0.4%. VanEck Retail ETF (RTH) fell fractionally, and the State Street SPDR S&P Retail (XRT) gained 0.7%.HealthcareThe State Street Health Care Select Sector SPDR (XLV) added 0.4%, while iShares US Healthcare (IYH) and Vanguard Health Care ETF (VHT) gained 0.5% each. IShares Biotechnology ETF (IBB) was up 0.8%.IndustrialThe State Street Industrial Select Sector SPDR (XLI) rose 0.8%. Vanguard Industrials Index Fund (VIS) was up 0.9% and iShares US Industrials (IYJ) gained 0.5%.CryptocurrencyIn midday activity, bitcoin (BTC-USD) fell 0.5%. Among cryptocurrency ETFs, ProShares Bitcoin ETF (BITO) was 0.5% lower, ProShares Ether ETF (EETH) was down 0.9%, and ProShares Bitcoin & Ether Market Cap Weight ETF (BETH) dipped 0.7%.

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