North American Morning Briefing: Oil Rises on Mideast Jitters, Pushing Yields Higher

Stock futures fell Thursday as oil climbed following a fresh tanker

attack in the Persian Gulf, pushing up government bond yields around the world.

Oil rose by 4% to top $104 a barrel on heightened concerns of U.S.-Iran escalation.

"Global equity markets fell on Thursday as surging crude prices and escalating Middle East tensions reignited stagflation concerns, ending a rally that had brought major benchmarks back toward record highs," Tickmill Group said.

Investors were reassessing the balance between hype surrounding artificial intelligence and cost pressures driven by energy price spikes, it added.

Treasury prices were falling early Thursday, pushing yields back towards multi-year highs, as rising oil prices added to concerns about inflation and traders eyed a sale of long-term debt later in the day.

Meanwhile, the minutes of the Fed's September meeting released Wednesday showed most policymakers expected another rate increase this year. Speaking at an event in Turkey, Fed Gov. Christopher Waller said additional hikes will be needed if economic data comes in as expected, "but there is some flexibility about when those hikes will occur."

The market expects a rate increase in December followed by two rises next year, LSEG data show.

"We think that is too aggressive, but doubt the market will want to fight against that hawkish pricing this year," ING said.

Stocks to watch

Applied Digital Corp. rose premarket after the data-center developer reported that quarterly revenue more than quadrupled thanks to demand from AI hyperscalers, though it still lost money.

PepsiCo is due to report earnings before the bell.

Taiwan Semiconductor Manufacturing's September sales rose 55% on year, but they were down 0.6% from the previous month. Its U.S.-listed shares slipped premarket.

Watch For:

U.S. Weekly Jobless Claims; U.S. Wholesale Inventories for August; PepsiCo 3Q earnings; Federal Reserve Bank of St. Louis President Alberto Musalem speaks at Bloomberg's The Future of Fixed Income event

Today's Top Headlines/Must Reads:

- Electric Big Rigs Struggle to Compete, Even With Diesel at $8 a Gallon

- Choosing the Right Bond Strategy for Today's High-Yield World

- The AI Price War Is Heating Up-and OpenAI Is Gaining Ground on Anthropic

MARKET WRAPS Forex:

The dollar remained firm as the Federal Reserve's latest meeting minutes pointed to further rate increases.

The euro traded flat. The currency is likely to face further weakness in the near term due to concerns about France's fiscal position, Commerzbank said.

Sterling's recent gains against the euro could extend further on the prospect of the BOE raising interest rates at its next meeting, ING said.

Bonds:

Treasury yields rose on Thursday, with the U.S. borrowing costs hovering just shy of fresh multidecade highs reached during Wednesday's session.

Higher Treasury yields reflect an economy that has remained resilient, inflation that is still above target, and a fiscal backdrop that requires substantial Treasury issuance, said BondBloxx Investment Management.

Infrastructure Capital Advisors are bullish on the 10-year Treasury note as it anticipates the Fed will raise interest rates only one more time. One rate hike would be in line with the Fed's dot plots, and would be fewer than priced in by markets. Energy:

Brent crude rose 3.9%, while WTI gained 3.7%.

Metals:

Gold prices ticked higher as traders assess the possibility of another Federal Reserve interest-rate hike this year.

"The price action highlights an ongoing battle between macro and technically focused traders selling gold in response to higher funding costs and dollar strength, and investors seeking protection against the potential fiscal fallout from rising debt and borrowing costs," said Saxo Bank.

TODAY'S TOP HEADLINES

Tesco Lifts Lower End of Profit Outlook on Sales Momentum

Tesco lifted the lower end of its annual profit outlook, saying resilient consumer confidence helped it sustain sales momentum as the group continues to dominate the U.K. grocery sector.

The British supermarket chain now expects adjusted operating profit to be 3.15 billion pounds to 3.30 billion pounds, or $4.16 billion to $4.36 billion, for the fiscal year ending in February.

Samsung Expects Operating Profit to Exceed $80 Billion For First Time

Samsung Electronics expects quarterly operating profit to exceed $80 billion for the first time, putting the world's largest memory-chip maker on track to extend its run of record earnings.

The staggering preliminary estimate-more than twice what Samsung made for the whole of 2025-comes as it remains a key beneficiary of global demand for advanced chips as companies invest heavily in AI infrastructure and applications.

Porsche AG Increases Stake in Manthey Racing to 67%

Porsche has increased its stake in German auto racing team and performance tuning company Manthey Racing as part of its new strategy that will see it expand the number of optional performance extras it can offer to Porsche buyers.

The German luxury sports car maker on Wednesday outlined a plan to accelerate profitability over the coming years, which included expanding the individualization options on its cars.

Uniqlo Owner Posts Record Annual Profit, Expects Further Growth

Fast Retailing reported record annual net profit, driven by strong earnings across regions, and projected further profit growth this fiscal year.

The Japanese owner of Uniqlo and other clothing brands said Thursday that net profit rose 25% to 542.52 billion yen, equivalent to $3.43 billion, for the 12 months ended August. That beat the estimate of -Yen510.7 billion in a poll of analysts by data provider Visible Alpha.

U.S. Treasury Yields, Eurozone Bond Yields Rise Relentlessly

U.S. Treasury and eurozone government bond yields rose in early European trade on Thursday, with the U.S. borrowing costs hovering just shy of fresh multidecade highs reached during Wednesday's session.

In Europe, French government bonds continued to underperform eurozone peers as investors remained cautious about French debt on concerns over the government's ability to lower the budget deficit to the intended 5% of gross domestic product in 2027.

Fed's Waller Sees Multiple Rate Increases Ahead to Cool Inflation

Federal Reserve Governor Christopher Waller said Thursday that he expects the central bank will need to implement multiple rate increases to cool inflation in a timely fashion.

In prepared remarks at the Istanbul Economic Forum, Waller said that the economic data didn't shift the narrative much from the Federal Open Market Committee's September meeting. In fact, he sees the U.S. economy in "roughly the same place."

Oil Prices Rise More Than 2% Amid Houthi Attacks, U.S. Gulf Shut-Ins

Oil prices rose more than 2% Thursday amid escalating Houthi attacks in Saudi Arabia, another tanker strike in the Persian Gulf and growing U.S. offshore production shut-ins as Hurricane Isaias approaches the northern Gulf Coast.

December Brent crude futures rose 2.6% to $102.79 a barrel, while December West Texas Intermediate futures gained 2.2% to $89.46 a barrel.

Land Mines in the Korean DMZ Deliver Warning Against Defections

SEOUL-News that North Korean land mines left South Korean troops wounded in the Korean Demilitarized Zone last month sent a clear message: North Korean dictator Kim Jong Un is bent on keeping his people from escaping.

The land mines in the western part of the DMZ-the roughly 2-miles-wide strip of land that separates the North and South-injured three soldiers. Officials in Seoul said the mines were almost certainly deliberately planted by North Korea.

Israel Orders U.K. Consulate in Jerusalem Closed Over West Bank Trade Ban

TEL AVIV-Israel on Thursday ordered the British Consulate in Jerusalem to be closed, ending a nearly 200-year presence there and sending the consul general and 19 other diplomats out of the country.

The decision, triggered by the U.K.'s recent ban on trade from Israeli settlements in the West Bank, comes as Israel prepares for an election this month that pits Prime Minister Benjamin Netanyahu in a tough race against his opposition.

Suspected Iranian Drone Plot Raises Security Questions at U.K. Bases

A suspected Iranian plot to attack prized U.S. B-1 bombers housed at Britain's RAF Fairford exposed an Achilles' heel in U.K. defenses: Its air bases are far from drone-proof.

A dozen B-1 bombers were abruptly flown out of Fairford after U.S. officials said they had intelligence that Iran was plotting to target them with drones and other devices. Fears spiked after five men were arrested in the woods next to Fairford last month on suspicion of plotting a terrorist attack.

Democrats Expect to Win the House. Here's Their To-Do List.

WASHINGTON-House Democratic Leader Hakeem Jeffries said Democrats would move swiftly to reverse Trump-era cuts to healthcare spending and bring down households' costs, expressing confidence that his party would win a majority during President Trump's final two years in office.

The New York Democrat, speaking with a group of reporters, laid out some of his key priorities Wednesday should his party win back control of the House in November's midterm elections, while also nodding toward planned investigations of GOP "crooks" but giving few details.

Write to priscila.barrera@wsj.com

TODAY IN CANADA Earnings:

Aritzia Inc. 2Q Novagold Resources Inc 3Q Tilray Brands Inc. 1Q

Economic Indicators (ET):

Nothing major scheduled. Stocks to Watch:

Aris Mining Remains on Track to Meet Lower End of 2026 Production Guidance of 300,000 to 350,000 Ounces

Firan Technology 3Q Adj Net Income CAD 10.3M; 3Q Revenue CAD 64.1M; FactSet Est. CAD 52.3M; 3Q Adj EBITDA CAD 15.1M; 3Q Revenue Beats Estimates; 3Q Sales C64.1M;3QNetC10M

(MORE TO FOLLOW) Dow Jones Newswires

October 08, 2026 06:16 ET (10:16 GMT)