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Update: US Equity Indexes Drop as Robust Output Growth Galvanizes Fed Rate-Increase Bets

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(Updates with index/price moves, macroeconomic data, and geopolitical news from the first paragraph.)

US equity indexes fell after a surge in private-sector output growth to the highest in more than five years lifted bets for a back-to-back interest rate increase in October and sent government bond yields sharply higher.

The Nasdaq Composite dropped 1.1% to 26,939.6, the Dow Jones Industrial Average fell 0.6% to 51,538.2, and the S&P 500 slid 0.7% to 7,708.3 ahead of Wednesday's close. All sectors except industrials and energy declined. Utilities and communication services led decliners.

Most US Treasury yields jumped after US private-sector output growth accelerated to a 62-month high in September amid strength in both services and manufacturing, while price pressures intensified. The 10-year yield soared 15.8 basis points to 5.13%, and the two-year rate surged 13.1 basis points to 4.91%.

S&P Global's (SPGI) flash purchasing managers' index data released Wednesday showed September's composite output gauge increased to 58.4 from 56 in August, marking a fourth straight monthly rise. The consensus was for 55.3 in a survey compiled by Bloomberg.

Traders are now pricing a 69% probability that the Federal Reserve will raise its target rate range for federal funds by 25 basis points to 4% to 4.25% in October, up from 55% a day earlier and 9% a month ago, according to the CME FedWatch tool. The Fed raised rates by the same magnitude in September.

Iran's President Masoud Pezeshkian told the United Nations that Tehran will not surrender to the pressures being brought on by the US, while saying he is of the view that diplomacy is the way to end the war, Reuters reported Wednesday. This comes as US President Donald Trump warned on Tuesday that he could annihilate Iran if there is no deal to end the war, but also suggested an agreement could come soon, the news report said.

The front-month US West Texas Intermediate crude oil contract jumped 1.9% to $92.20 per barrel, while the global benchmark North Sea Brent shot up 4% to $103.18 per barrel amid worsening Iran geopolitics.

What else is happening in Japan?

Japan

US Equity Markets Mixed After Data Shows Cooling Trend, Crude Oil Price Drops

US equity indexes were mixed Tuesday as crude oil prices fell and economic data pointed to weaker manufacturing and service-sector activity.* US President Donald Trump told the UN General Assembly that a deal with Iran is possible after the midterm elections, but his other choice is to "annihilate the Islamic Republic," CNN reported.* Redbook US same-store sales rose by 7.6% from a year earlier in the week ended Sept. 19 after an 8.5% year-over-year increase in the previous week.* The Richmond Fed's monthly manufacturing index fell to minus 2 in September from 4 in August, compared with the expectations for 2 in a survey compiled by Bloomberg.* The Philadelphia Federal Reserve Bank's monthly non-manufacturing activity index worsened to minus 22.0 in September from minus 10.6 in the previous month, compared with the expectations for an improvement to minus 8.7 in a Bloomberg-compiled survey.* October West Texas Intermediate crude oil fell $1.19 to settle at $94.59 per barrel, while November Brent crude, the global benchmark, was last seen down $1.89 at $98.45.* Shopify (SHOP) shares were up 7.1%, one of the top gainers on the Nasdaq, after the company said it will incorporate Meta Platforms' (META) Muse agentic AI into its checkout options.

Dow JonesNasdaq CompositeS&P 500$META$SHOP
Japan

Update: US Equity Indexes Trade Mixed in Final Leg; Nasdaq Makes New Record Intraday

(Updates with index/price moves from the first paragraph.)US equity indexes were mixed in the final leg of trading on Tuesday, with financials among the steepest decliners and materials leading the gainers.The Nasdaq Composite rose 0.6% to 27,274.5, after hitting an intraday record earlier in the session, and the S&P 500 climbed 0.2% to 7,776.9. The Dow Jones Industrial Average fell 0.2% to 51,959.7. Financials and communication services led decliners.US President Donald Trump told the UN General Assembly that a deal with Iran is possible after the midterm elections, but his other choice is to "annihilate the Islamic Republic," CNN reported.The front-month US West Texas Intermediate crude oil contract dropped 1.2% to $94.59 per barrel, and the global benchmark North Sea Brent declined 2% to $98.36 per barrel.US Treasury yields were mixed in the final leg of trading, with the 10-year yield unchanged at 4.96% and the two-year rate less than one basis point lower to 4.75%.

Dow JonesNasdaq CompositeS&P 500
Japan

Update: US Equity Indexes, Crude Oil Prices Mixed in Midday Trading

(Updates with index/price moves and company/geopolitical news from the first paragraph.)US equity indexes traded mixed, with materials leading gainers and financials fronting decliners after midday on Tuesday.The Nasdaq Composite edged up 0.2% to 27,181.3, while the Dow Jones Industrial Average fell 0.5% to 51,781.1 and the S&P 500 slipped less than 0.1% to 7,759.8.US Treasury yields traded mostly higher, with the 10-year yield adding 1.5 basis points at 4.98% and the two-year rate up 1.3 basis points at 4.77%.US President Donald Trump told the UN General Assembly that a deal with Iran is possible after the midterm elections, but his other choice is to "annihilate the Islamic Republic," CNN reported.The front-month US West Texas Intermediate crude oil contract climbed 0.4% to $96.12 per barrel, while the global benchmark North Sea Brent declined 0.2% to $100.19 per barrel.In company news, Amgen's (AMGN) phase 3 study of dazodalibep met its primary endpoint, showing statistically significant and clinically meaningful improvement in systemic disease activity at week 48 in adults with Sjogren's disease, the drugmaker said. Shares jumped 3.6%, the Dow's top gainer.

Dow JonesNasdaq CompositeS&P 500$AMGN