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August 6, 2026 - 20:54
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(Bloomberg) — A rally in oil prices sent stocks lower and lifted Treasury yields, fueling worries about inflation in the countdown to Friday’s jobs report.Escalating tensions in the Middle East and lack of clarity on a deal to revive the Strait of Hormuz drove Brent crude to around $82. Higher energy costs stoked concerns the Federal Reserve will have to raise rates. The S&P 500 fell for a second straight day. Memory companies Sandisk Corp. and Western Digital Corp. tumbled as their forecasts underwhelmed investors. The dollar rose.Iran will seek to bar US and Israeli ships from Hormuz and require compensation from hostile countries before they’re allowed to use it, according to local media reports on a proposed Iran-Oman deal to manage the crucial waterway.Tehran says a full reopening would require the lifting of the American maritime blockade. And Washington hasn’t signaled whether it’s ready to go back to the terms it accepted under the last effort to reopen the strait.Those geopolitical tensions resurfaced at a time when some Fed officials are pushing to boost rates to tamp down price pressures. The latest round of data continued to reflect labor-market resilience, reinforcing the assumption that inflation will drive the September central bank decision, said Vail Hartman at BMO Capital Markets.“Near-term risks remain, especially if US data stay firm, oil prices keep inflation concerns alive, or markets continue to price in a more hawkish Federal Reserve rate path,” said Ulrike Hoffmann-Burchardi at UBS Chief Investment Office.Employers in the US likely stepped up their pace of hiring in July, showing a steady appetite for workers despite the overhang of elevated inflation. Economists estimate the monthly jobs report on Friday will show an 80,000 increase in payrolls after the lower-than-expected 57,000 gain in June.“Friday’s jobs report is of greater importance for markets given how fast this stock market has rallied over the past week, and ultimately we will need to see a number that is not too hot and not too cold in order for the market to keep grinding higher,” said Clark Bellin at Bellwether Wealth.Applications for unemployment benefits were little changed, remaining below 200,000 for a third straight week. A separate report showed labor productivity accelerated at a faster-than-expected pace in the second quarter as employers sought to mitigate higher costs.“The labor market is holding up well in the face of elevated interest rates and AI productivity gains,” Bellin noted. “We are still seeing plenty of companies hold onto their labor force even as AI investments take hold.”Corporate Highlights:Alphabet Inc. is set to raise $25 billion from a bond sale after generous yield payouts helped secure one of the year’s largest order books for AI-related debt. Trump administration officials are considering a months-long delay in collecting planned tariffs on solar panels and other items containing polysilicon — a phase-in period that could encourage a rush of imports by renewable-energy companies working on US projects. Honeywell Aerospace Inc.’s unexpected reduction in its outlook startled investors just weeks after the supplier began operating as an independent company. Peloton Interactive Inc. gave a revenue forecast for the fiscal 2027 year that disappointed investors, marking the latest setback for the fitness technology company. Nscale is telling prospective investors it has about $51 billion of total contracted revenue ahead of a US initial public offering that could take place as soon as in September, according to people familiar with the matter. Some of the main moves in markets:StocksThe S&P 500 fell 0.2% as of 2:53 p.m. New York time The Nasdaq 100 fell 0.3% The Dow Jones Industrial Average fell 0.8% The MSCI World Index fell 0.2% CurrenciesThe Bloomberg Dollar Spot Index rose 0.2% The euro fell 0.3% to $1.1522 The British pound fell 0.1% to $1.3453 The Japanese yen fell 0.4% to 158.36 per dollar CryptocurrenciesBitcoin fell 0.7% to $64,335.88 Ether fell 0.7% to $1,903.04 BondsThe yield on 10-year Treasuries advanced six basis points to 4.67% Germany’s 10-year yield advanced three basis points to 3.14% Britain’s 10-year yield advanced five basis points to 4.94% CommoditiesWest Texas Intermediate crude rose 2.8% to $77.34 a barrel Spot gold was little changed ©2026 Bloomberg L.P.
