MARKET SNAPSHOT

U.S. stocks fell as the war in the Middle East continued to escalate and to drive up oil prices. Investors sold U.S. bonds, sending U.S. yields higher, despite the Treasury's announcement of a $6 billion buyback for Treasurys maturing in 10 to 20 years. Gold futures edged higher as the U.S. dollar weakened.

MARKET WRAPS EQUITIES

U.S. stocks extended their recent decline as the war in the Middle East continued to escalate and to drive up oil prices.

The Dow Jones Industrial Average fell 0.8%. The S&P 500 lost 0.5%, and the tech-heavy Nasdaq Composite dropped 0.6%.

Oil rallied after the U.S. launched another round of attacks on Iranian tankers near the Strait of Hormuz in reprisal for Iranian strikes at warships. The U.S., Iran and Houthi rebels have all targeted oil infrastructure in recent days.

The U.S. Treasury Department unveiled plans to buy back $6 billion in bonds maturing in 10-20 years. That was more than Treasury Secretary Scott Bessent's initial estimate of roughly $4 billion in purchases intended to tame the "fever" in bond markets.

Earlier Wednesday, equity markets across the Asia-Pacific region ended mixed.

China's benchmark Shanghai Composite Index rose 0.3%, the Shenzhen Composite Index ended flat and the ChiNext Price Index edged 0.1% lower.

Hong Kong's Hang Seng Index closed down 0.2%.

Japan's Nikkei Stock Average fell 0.2%.

South Korea's Kospi rose 1.4%.

Australia's S&P/ASX 200 Index declined 0.1%.

New Zealand's S&P/NZX 50 Index gained 0.2%.

COMMODITIES

Oil futures settled at their highest level since May 22 as strikes between the U.S. and Iran escalated and Houthis stepped up attacks on Saudi oil facilities.

The escalation is cause for concern as inventories are low and drawing down and it doesn't look like the U.S. is making any progress with the conflict, said John Deal, managing director of capital markets at Post Oak Group.

"I frankly think we're in really risky territory right now," he said, with significant risk of damage to infrastructure in Saudi Arabia. "I wouldn't be surprised, if this conflict doesn't wrap up soon, I think we could be looking at prices over $100 maybe as high as $120."

Brent settled up 3.4% at $101.21 a barrel, and WTI rose 3.2% to $96.05

Gold futures made small gains despite a rise in Treasury yields after the Treasury Department said it would buy back $6 billion in bonds this week, less than some in the market expected. The dollar weakened, however, which tends to support gold.

An easing in Japanese yields and continued central bank buying--with China's central bank adding 20 tons in August--also helped support prices, while the market remains focused on U.S. inflation data later this week, Konstantinos Chrysikos of Kudo.com said in a note.

Front month gold settled up 0.5% in New York at $4,416 a troy ounce. Silver gained 2.5% to $67.942 a troy ounce.

TODAY'S TOP HEADLINES

U.S. Treasury Plans $6 Billion Buyback, Yields Rise

The U.S. Treasury raised the size of its planned buyback operation for Treasurys maturing in 10 to 20 years to $6 billion, triple the typical amount, but not enough to send yields lower.

The Treasury Department said last month that it would at least double buybacks of longer-term bonds to $4 billion. Yields rose following the release of that plan which suggested the increased size lacked enthusiasm for bond investors.

"Investors were looking for a much larger increase, with expectations centered around $7 billion to $8 billion...the continued climb in yields suggests the announcement fell short of those expectations," wrote Tracey Manzi, senior investment strategist at Raymond James.

Apple Debuts New Foldable iPhone Duo, New CEO and New (Higher) Prices

Apple kicked off its most consequential product event in years on Wednesday, where it debuted a truly new iPhone, a new chief executive, as well as higher prices. It hopes consumers will concentrate on the first two.

The headline is the first foldable iPhone, which will start at $1,999. An almost tablet-like device, the new iPhone Duo will fit comfortably in a pocket and allows people to use more than one app at a time. It comes in two colors: white and dark grey.

Equally important was the man introducing it. John Ternus took over as Apple's CEO last week, becoming Apple's third CEO since 1997, when Steve Jobs returned. Hopes are high that the longtime hardware engineering executive can spark a new wave of innovation and the foldable iPhone is the most significant Apple device in a decade.

Albertsons Names Former HP, eBay CEO Meg Whitman as Executive Chair to Help Spur Growth

Albertsons named former eBay and Hewlett Packard chief Meg Whitman to the newly created post of executive chair, as the grocery-store operator grapples with falling sales and cautious consumer spending.

Albertsons on Wednesday said Whitman will serve as an operations and strategic adviser to Chief Executive Susan Morris as the company works to sharpen strategy, strengthen execution and increase profitable growth throughout all parts of its business.

Whitman will also work with Morris to refine the Boise, Idaho, company's long-term strategy, Albertsons said.

Google to Invest $15 Billion in AI Infrastructure in Finland

Alphabet's Google said it would spend more than $15 billion to develop artificial-intelligence infrastructure in Finland, the latest big-ticket commitment from a U.S. tech giant to bolster its AI capacity overseas.

The company said the investment of at least 13 billion euros, equivalent to $15.11 billion, would fund data centers and other infrastructure, including clean energy projects, between 2027 and 2028 across four locations.

The commitment, which Google said was its largest single investment in Europe, underscores the company's efforts to expand operations overseas in a bid to capitalize on growing demand for AI services.

Anthropic Researcher Quits Over 'Out-of-Control' AI Fears

An Anthropic researcher is quitting the artificial-intelligence industry over fears that the lab and its competitors are racing to build systems they won't be able to control, a sign of mounting safety concerns within top AI companies.

Jacob Coxon, a researcher who specializes in training new AI models by having them consume vast amounts of data, said Tuesday that he is leaving the company because he doesn't want to participate in an industrywide rush to build AI systems that can improve themselves, worried such systems could spiral out of control and destroy humanity.

The 27-year old Brit, who previously studied mathematics, said many of his industry colleagues now use phrases like "crunchtime" and "endgame" to describe the trajectory toward self-improving models.

Expected Major Events for Thursday 01:00/AUS: Sep Consumer Inflationary Expectations Survey

22:30/NZ: Aug BNZ - BusinessNZ Performance of Manufacturing Index (PMI)

23:50/JPN: 3Q Business Outlook Survey

23:50/JPN: Aug Corporate Goods Price Index

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