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Update: US Equity Indexes Fall as Hot Producer Prices, Soaring Crude Oil Boost Treasury Yields

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

US equity indexes fell as crude oil and government bond yields soared after an inflation gauge grew at the quickest pace in three months and an Iran-aligned militia group's threat to the alternative shipping route to the Strait of Hormuz escalated.

The Nasdaq Composite declined 0.6% to 26,091.2, the S&P 500 retreated 0.6% to 7,594.1, and the Dow Jones Industrial Average dropped 0.7% to 52,036.6 ahead of Thursday's close.

The Bureau of Labor Statistics' wholesale price inflation gauge, the Producer Price Index, jumped 5.4% from a year ago in August, above the 5.3% forecast in a Bloomberg-compiled survey, and 4.8% in July. The PPI edged up 0.4% month over month, as expected, following a 0.1% increase in July. The August print is the highest growth rate since May.

Core PPI, which excludes volatile food and energy prices, climbed 4.6%, as anticipated, from a year ago, and up from 4.3% in July. Core PPI climbed 0.2%, below July's 0.3% and the 0.3% forecast.

"Based on the timing of the PPI survey, we expect another rise in September's report, as diesel prices have climbed nearly 60 cents and gasoline prices have risen close to 20 cents during the survey window, which is in the middle of the month," Grace Zwemmer, US economist at Oxford Economics, said in a note.

US Treasury yields traded sharply higher in the final leg of trading. The two-year soared 13.3 basis points to 4.56%, and the 10-year yield surged 11.7 basis points to 4.96%.

Iran-aligned Houthis seized control of Yemen's port city of Mocha on Thursday, military sources said, gaining further leverage over the Bab el-Mandeb Strait, the southern outlet of the Red Sea, according to a report from Reuters. Bab al-Mandeb is a geopolitical chokepoint similar to the Strait of Hormuz linking Asia and Europe via the Suez Canal.

Saudi Arabia reported to the Organization of the Petroleum Exporting Countries that its crude oil production plunged again last month, down by 1.9 million barrels a day to 6.238 million barrels, the lowest since 1990, as renewed hostilities between the US and Iran squeezed the kingdom's export routes, Bloomberg reported.

The front-month US West Texas Intermediate crude oil contract catapulted 6.3% to $102.06 per barrel, and global benchmark North Sea Brent shot up 6% to $107.23 per barrel.

What else is happening in Japan?

Japan

US Equity Markets End Lower as Crude Oil, Government Bond Yields Rise

US equity indexes ended lower Wednesday after crude oil climbed and government bond yields rose despite the US Treasury Department's move to triple government debt buybacks to as much as $6 billion.* Iran is prepared for a more intense phase of the war and will increase counterstrikes if the US attacks on its territory and infrastructure continue, Bloomberg reported, citing a senior official from the Islamic Republic.* Redbook US same-store sales last week surged 8.3% from a year earlier after a 9.6% increase in the previous week.* October West Texas Intermediate crude oil rose $3.45 to settle at $96.48 per barrel, while November Brent crude, the global benchmark, was last seen up $3.39 at $101.31.* Casey's General Stores (CASY) shares fell 14%, the steepest drop on the S&P 500, after fiscal Q1 same-store sales growth slowed and missed Wall Street estimates, even though earnings and revenue topped expectations.* Meta Platforms (META) shares rose 6.6%, the second-biggest gain on the S&P, after the company launched a new personal AI agent called Muse AI, which can send emails, book travel plans, and continue working after users close the app.

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Japan

Update: US Equity Indexes Drop as Crude Oil Tops $100 Mark, Treasury Yields Surge

(Updates with index/price moves and geopolitical news from the first paragraph.)US equity indexes fell after Brent crude oil futures surpassed $100 a barrel and government bond yields jumped after the Treasury Department unveiled plans to triple government debt buybacks to as much as $6 billion.The Nasdaq Composite declined 0.6% to 26,252.1, the S&P 500 retreated 0.4% to 7,640.2, and the Dow Jones Industrial Average dropped 0.6% to 52,456.9 ahead of Wednesday's close.Iran is ready for a more intense war and will escalate counterstrikes if the US continues attacking its territory and infrastructure, Bloomberg reported, citing a senior official from the Islamic Republic. Tehran has no intention of backing down in the face of an American naval blockade and attacks on its oil tankers, the official told the news outlet. Economic pain may be increasing, they said, but the country's leaders see the war with the US as posing an existential threat that leaves them little choice but to keep fighting.The front-month US West Texas Intermediate crude oil contract surged 3.6% to $96.39 per barrel, and global benchmark North Sea Brent soared 3.5% to $101.34 per barrel.The Treasury Department plans to buy back up to $6 billion of government debt, CNBC reported. The move triples the normal buyback operation, following an announcement on Aug. 19 from Treasury Secretary Scott Bessent that the department would at least double the normal amount for already issued securities.Most US Treasury yields rose, with the 10-year yield up 3.3 basis points to 4.84%, trading close to its highest since late 2023.

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Japan

US Equity Indexes Decline as Crude Oil Tops $100 Mark While Treasury Yields Jump

US equity indexes fell as Brent crude oil futures crossed $100 a barrel, while a surge in government bond yields wiped the shine off the Treasury Department's move to triple government debt buybacks to as much as $6 billion.The Nasdaq Composite declined 0.4% to 26,306.5, the S&P 500 retreated 0.3% to 7,651.3, and the Dow Jones Industrial Average dropped 0.6% to 52,541.7 after midday Wednesday.The Iranian Revolutionary Guard Corps plans to declare a restricted zone stretching from Chabahar into parts of the Gulf of Oman and the Arabian Sea, Al Jazeera, a Middle Eastern broadcaster, reported. Any vessel entering this area will face sanctions, it said. The Strait of Hormuz accounted for about a fifth of global oil and gas flow daily before the Iran war.Iran said on Wednesday it had attacked 10 ships near the Strait of Hormuz after the U.S. sank five Iranian oil tankers, in the biggest declared wave of tit-for-tat attacks on shipping by both sides since the start of the six-month-old war, Reuters reported.The front-month US West Texas Intermediate crude oil contract surged 3.1% to $95.91 per barrel, and global benchmark North Sea Brent soared 3.2% to $101.04 per barrel.The Treasury Department on Wednesday said it will buy back up to $6 billion of government debt in an operation aimed at keeping bond markets functioning, CNBC reported. The much-anticipated announcement triples the normal buyback operation, it said.Most US Treasury yields rose, with the two-year up 3.2 basis points to 4.43%. The 10-year yield jumped 4.5 basis points to 4.85%, its highest since late 2023.

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