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Wall St. futures rebound as oil falls ahead of inflation test
U.S. stock index futures rebounded as oil prices dropped on Friday, and investors placed their hopes in the consumer inflation report. This helped end a tough week with a positive ending. Oracle's premarket price jumped by nearly 7% after it surpassed estimates for its quarterly results, announced late Thursday. This reassured investors that their AI investments are paying off. Nvidia gained 0.9%. The market is weakened by fluctuating interest rates expectations as stocks face a number of challenges, such as the intensifying Middle East conflict or the elevated Treasury yields. The market now faces the Consumer Price Index report, another data point that could shift rate expectations, following Thursday's slightly ?hotter-than-expected Producer Price Index reading that did little to reassure investors. Haidar Capital Management founder Said Haidar said, "We think the Federal Reserve must respond in the near term to avoid a repeating of the high inflation that occurred in the 1970s. This would be yet another failure for discretionary monetary policies." At 5:31 am. At 5:31 a.m. ET, Dow E Minis rose by 276 points or 0.53%. S&P 500 E-minis climbed by 40.75 or 0.54%. Nasdaq E-minis grew 166.75 or 0.57%. The blue-chip Dow Jones was heading for its steepest drop since March, and the S&P 500 benchmark was on course for its largest weekly loss since last June. Some investors wonder how far this year's rally will go. Jeff Schulze is the head investment strategist of Franklin Templeton Institute. He wrote that history shows that strong starts are likely to continue. According to Schulze, since?1950 the S&P 500 has risen more than 10% by the end of the month of August in 25 out of 28 instances. Brent crude futures fell more than 3%, but they were still over $104 per barrel. West Texas Intermediate crude futures fell?2.6%, but they were still close to $100 a barrel. Bill Adams, Fifth Third Commercial Bank's chief U.S. economic at the time, said: "The rise in energy prices since January has created a new risk of inflation." According to GasBuddy, the average national price of diesel in the U.S. on Thursday exceeded $6 per gallon for first time. Separately the yield on 10-year U.S. Treasury notes dropped 0.16?basis point but was still at its highest since 2023, 4.9424%. Stocks are less appealing when Treasuries have high yields. Adobe's premarket price dropped by more than 3% after its midpoint revenue forecast for the fourth quarter fell short of expectations. ACV Auctions shares soared by 44% following the agreement of online vehicle auctioneer Copart to purchase it for nearly $1.9 billion.
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Nearly one third of India’s coal-fired power plants are running on low fuel supplies.
Government data revealed that despite efforts by the government to increase fuel supplies, nearly a third (33%) of India's coal-fired plants operate with "critically low" fuel stock levels. This is because an extended period of hot weather has kept electricity demand high. India's peak electricity demand, which is a measure for the maximum amount of electricity required, hovers around the record 270.70 Gigawatts reached in May. The demand for electricity has been around 267 GW in the last few days, driven by an El Nino weather pattern and increased cooling requirements. Central Electricity Authority data showed that the number of power plants with coal inventories below 25% or only capable of producing power for three days, rose sharply from 45 to 59 on September 9, up from 45 at the end of August. Manoj Kumar is an analyst with the Centre for Research on Energy and Clean Air. Analysts said that while clean energy, mostly solar power, is meeting most of the electricity needs during the day, inadequate battery storage and lower levels of water reservoirs are placing pressure on coal-fired generators. Kumar said that India needs to increase coal supplies to utilities via the rail network in the near term to maintain normal levels of stock. India deployed 444?or rakes? on September 6, up from 370 the previous day, to increase coal?supplies? to power plants. Coal India, and its subsidiaries, have also increased coal shipment by road. Coal India, world's largest coal miner, has said that it holds adequate stocks at its pitheads of 76 million tons.
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IEA warns that the oil gap in 2026 will increase due to the delayed return of normal Gulf flow
The International Energy Agency announced on Friday that global oil demand and supply will be lower than originally thought. This is because the Iran War has not been resolved, and the return to 'normal Middle East flows' until 2027 is delayed. Fuel prices are also expected to rise as a result. Crude prices have reached $110 per barrel for the first week since May due to an increase in attacks on oil tankers along Middle East shipping routes. This increase is overshadowed, however, by the record-breaking price of diesel. The IEA has now predicted that the world's oil supply will decline by 5.7 millions barrels per day in?2026, which is an increase from a previous drop of around 4%. The world's oil supplies are short and inventories are being used at an unprecedented rate. The IEA reported that global stocks dropped by 3.1 mbpd during August. In a report published every month, the IEA - which advises industrialised nations - stated that "Inventories played a critical role in balancing markets to date." "With buffers'shrinking' and the 'global refining systems stretched to the limits, the need to resolve the conflict in the Middle East - and the Russia/Ukraine War, now in its fifth year – is greater than ever in order to avoid further tightening of the market." The demand is also lower than expected due in part to the record fuel prices. The IEA predicted that world oil demand 'will fall by 2.5 million bpd in this year. This is more than their previous estimate of a 1.6million bpd drop.
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Sources say Asian refiners are seeking a Brent price swap in Saudi crude term negotiations
Two Asian refiners, according to sources familiar with the matter, have asked Saudi Aramco to switch the benchmark for their long-term crude contracts from Dubai to ICE Brent. Middle Eastern price indicators have surged over Brent since August, due to the increasing tensions between Iran and the United States. The APPEC Conference in Singapore is an annual gathering of Middle Eastern producers and Asian refining companies to discuss long-term contracts. These are usually finalised by the end of the year. Sources said that refiners requested supplies for 2027 during this week's discussions. They cited the increased volatility of the Middle East benchmark, as the amount of tradeable oil has decreased since a number of grades were removed from the Strait of Hormuz at the start of the Iran War. One of the producers said that other Middle Eastern producers have also received the same request to change benchmarks. Saudi?Aramco refused to comment. Saudi Arabia, which is the largest oil exporter in the world, releases monthly official selling price (OSP) differentials from the average of Platts Oman and GME Dubai quotes for crude sold on a term basis. Aramco's and other producers' reactions to renewed requests for a "change in benchmarks" were unclear. The disruptions in shipping and the uncertainty caused by conflicts in the Middle East also clouded future prospects for supply. This raises questions about how much crude oil producers are able to deliver. Platts 'Dubai and Oman Futures' traded on the Gulf Mercantile Exchange on Thursday stood at $119.40 a barrel and $119.30 a barrel, respectively. This was a multi-month high level. Brent crude futures closed at $101.75 at Asia’s market close. Cash premiums on Dubai and Oman crude have also reached multi-month highs, at $26,91 and $26,81 per barrel, respectively, reflecting the acute shortages in the physical market. Dubai and Oman benchmarks have experienced similar volatility in the past. Cash-market premiums soared in March after aggressive bidding from major trading houses pushed benchmark-linked prices higher.
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IEA cuts further Russian oil production forecasts due to Ukrainian attacks
The International Energy Agency announced on Friday that it had again revised its?outlook on Russia's oil output due to the ongoing Ukrainian drone attacks on energy infrastructure. The oil production in?Russia has declined due to the Ukraine's attacks on energy infrastructure and refineries. In its monthly review, the Paris-based IEA stated that Russia's crude production forecast?was reduced by 125,000 barrels a day to 8,7?million bpd by 2026. By 235,000 bpd by 2027 when?it was expected to average 8,6 million bpd. The draft government forecast, seen by?last weekend, showed that Russia has downgraded its oil?output for this year to the lowest level in 17 years and revised fuel exports for 2026-2027 because of the conflict with Ukraine. According to the IEA's report, Russia's oil output decreased by 200,000 barrels a day last month from July to 8,36 million bpd. The IEA reported that this is a 940,000 bpd drop from the peak in January 2026 of 9.3 millions bpd and 695,000 bpd down on the previous year's levels. Russia stopped publishing oil production data?in April of 2023. This was a little over a year after the beginning of the conflict in Ukraine. On 'Thursday, the Organization of Petroleum Exporting countries said that Russia's oil production fell by 160,000 barrels per day (bpd) in August compared to July. This brings it down to 8,718 million bpd.
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German environmental group sues to block Rosatom-linked nuclear fuel permit
BUND Niedersachsen, a German environmental group, has filed a lawsuit against the Lower Saxony state to overturn the approval of a?project to expand the Lingen nuclear power plant as part of 'a project 'linked to Rosatom in Russia. The case challenges the regional government's approval for a French subsidiary, Framatome, to produce nuclear fuel in Lingen (northern Germany) under a license agreement with a state-backed Russian company. Lower Saxony’s environment ministry - with guidance from the federal ministry of environment - had approved approval subject to a few?conditions despite concerns about Russia’s war in Ukraine. They said there was no 'legal basis' for rejecting. BUND, in collaboration with the anti-nuclear.ausgestrahlt group, claimed that the permit was a result of procedural errors and would pose a risk to security because of the?Rosatom role. They claim that the screening of the environment was based on old documents, and Rosatom's involvement in the filings wasn't fully disclosed. Olaf Bandt, BUND Germany's Chair, said that production and inspection could have been manipulated because Rosatom machines were used in Lingen for both manufacturing and quality control. Berlin said that it was critical of the cooperation, but the decision had been made in accordance with German nuclear laws. The EU should impose sanctions to address these 'concerns'. Rosatom and Lower Saxony have not responded to comments immediately. Framatome has said that the collaboration is a 'transitional step' to assist customers operating Russian-designed nuclear reactors in diversifying away from direct Russian purchase until it develops their own production technology.
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What are India's largest share offerings as NSE and Reliance Jio look to list?
The largest stock exchange in India, the National Stock Exchange (NSE), will open its initial public offer next week. The NSE IPO, which 'doesn't include any new capital being raised', would value the company at close to $46 billion. This would make it a third largest IPO in the country. Mukesh Ambani, the billionaire owner of Reliance Jio Platforms, is likely to launch his IPO later this year. It's expected to raise $3.8 billion and be the largest stock offering in India's history. The five biggest Indian IPOs so far: HYUNDAI MOTOR INDIANA Hyundai, India's 4th largest passenger vehicle manufacturer and the 3rd largest automaker in the world, raised $2.95 billion in October 2024, in what was India's 'biggest ever IPO'. The South Korean parent of the manufacturer sold a 17.5% share in a pure "offer-for-sale" where existing shareholders are selling shares and no new capital was raised. Jio Platforms will likely follow a similar strategy, as the company's largest investors are expected to dilute their shares. LIFE INSURANCE COMPANY OF INDIA The government made 205 billion rupees (2.17 billion dollars) by selling a 3.5% share in India's largest financial investor and insurer. This is far less than its original target of up to $12 billion. On their debut, the shares fell?nearly 8 percent. Paytm is an Indian fintech company that raised 183 billion rupees (about $36 billion) in November 2021 through a combination of a new share offering and a sale. Ant Group reduced their stake from 28% to 23% and SoftBank Vision Fund's holding was cut to 16%. Paytm's debut listing saw a drop of more than 27%, which was the largest in the history of Indian IPOs. TATA CAPITAL Tata Group Financial Services raised 155 billion rupees (approximately $155 billion) in October 2025. Tata Sons, IFC and other companies sold?in an offer for sale component along with a new issue. This was the largest IPO ever by a non-banking financial firm in India. The shares were listed at a small premium of 1.23%. LG ELECTRONICS INDIA In a pure sale offer, LG Electronics of South Korea sold a 15% stake in its Indian unit. This unit makes refrigerators, washing machine, air conditioners and televisions. The deal netted 116 billion rupees by October 2025. The IPO attracted bids of?about 4.4 billion rupees. It was the'most heavily subscribed Indian IPO' since?Reliance Power listed in 2008. The shares of LG surged by 50% in their first trading day, making the unit more valuable than its parent company based in Seoul.
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Lenders tell investors to show them the money as bond chaos spreads
Stella Qiu gives us a look at what the future holds for European and global markets. Maybe promising to borrow $1.3 billion to 'give' to each American who votes for your party wasn’t a good idea. This fiscal excess at a time of high inflation may not have directly caused the latest bond market 'rout', but it sure did not help. Bond markets are sending a message to governments around the world: If you want to continue borrowing, you will have to pay more. Much more. The benchmark 10-year U.S. Treasury Yield hit a three-year high in Asia of 4.9708%, closing in on 5% which could slow down the economy and disrupt the stock markets. The Australian bond yields reached 15-year highs.?New Zealand swap rate surged by 22 basis points. Even the Japanese benchmark government's yield rose 9 basis points as traders bet that central banks will have to raise rates to stop inflation running wild. Brent crude's surge back above $108 per barrel - now more than?50% higher from its lows in July - is the primary culprit. The Strait of Hormuz remains effectively closed and the narrow Bab al-Mandab Strait at the southern end of Red Sea could fall to Houthi control following the?capture of the Red Sea port of Mokha. This would lead to more shipments being rerouted through the Suez Canal or around Africa. This would create additional logistical problems and add weeks to Asian journeys. Imagine the impact on oil prices. Asia's shares are in the red, with Japan's Nikkei down over 2% and South Korea's KOSPI down more than 2%. European stock exchanges are likely to open calmer, as yields in Europe have already reached multi-decade highs. Wall Street?futures in Asia were not much different, as they awaited the arrival of liquidity. The U.S. CPI is the key factor that will determine the Federal Reserve's policy. It could also seal the deal for an increase in interest rates next week. Forecasts center?on an increase of 0.2% monthly in the core CPI measure, but the Fed's decision may come down to the 2nd or 3rd decimal places in the figure. Futures indicate a 70% chance that the Fed will increase rates on Wednesday. A "hot" result could easily push 10-year Treasury yields over the psychologically difficult 5% barrier. Donald Trump is watching and he will not be happy. It is clear that interest rates will remain higher, as the Gulf conflict may continue beyond the U.S. Midterm Elections, if not years. The following are key developments that may influence the markets on Friday. CPI data in the U.S. for August University of Michigan Consumer Sentiment Report U.K. Industrial output and trade figures for July
Pakistan, the mediator in the conflict between Saudi Arabia and Iran-backed Houthis, is under pressure to pick a side.
Pakistan's dual role in the past year as Riyadh’s partner and Washington’s backchannel to Tehran has been evident. But this week, fighting between Yemen’s Iran-backed Houthi and Saudi forces will test how long Islamabad is able to hold both positions simultaneously.
The fights are the first major test of the'mutual defence alliance' that was signed last month between Pakistan, Saudi Arabia and Turkey, and adds to an existing pact already in place between Islamabad & Riyadh. According to the agreement, any armed attack against one of the countries will be considered an attack against all three.
Officials in Pakistan are concerned that the Houthi menace is more likely than earlier this year's Iranian missile attacks on Saudi energy infrastructure to drag Islamabad into war. Two Pakistani officials said in July that Pakistani soldiers were deployed near the Saudi border to Yemen, increasing their exposure.
Pakistan has been working to improve its economy, which is still recovering from years of turmoil. Deals with Gulf countries have played a major role in this.
Pakistan relies also on oil and natural gas shipments via the Strait of Hormuz, and through the Red Sea - routes that Iran and Houthis can disrupt. This gives Islamabad a reason to not alienate Tehran while it strengthens its ties with Gulf.
WARNING TO IRAQ
Tensions between Iran, a nuclear-armed country, and Pakistan have sometimes escalated to deadly clashes. In two years, Iran launched missiles and drones against alleged militant hideouts along the shared border with Pakistan in Balochistan Province. This sparked retaliatory strikes from Islamabad.
This time, Pakistan wants to stop an escalation of violence before it is too late.
Saudi, Pakistani, and Iranian sources said that the Saudis sent a warning to Iran this week urging it to rein in their Yemeni Houthi ally, according on Wednesday. On Thursday evening, Field Marshal Asim Muniz spoke with Abbas Araqchi, the Iranian Foreign Minister. They discussed "ways to restore diplomatic effort to de-escalate in all fronts", according to a Pakistani report.
A second Pakistani official said that Pakistan is "trying to maintain a low-profile in the Saudi Houthi conflict" because Pakistan's stakes are very high. It does not wish to ruin relations with Iran.
Sajjad Hajder Khan, spokesman for the Pakistani foreign ministry, said in a press briefing held on Thursday that no military response was being discussed to the Houthi attacks.
In response to a comment request, Khan said that the Iranian leadership had always appreciated Pakistan's efforts at mediation. "Pakistan is a staunch opponent of escalation, and advocates restraint and dialogue."
BALANCING ACT
Officials from Iran have publicly praised Pakistan and stated that they don't see the defence pact in a negative light. Three Iranian sources who were familiar with the talks said that the private story was different. They explained that although Pakistan may have good intentions, they lack the resources to carry out the agreement or the negotiation experience of Qatari negotiators.
The Iranian Foreign Ministry did not reply to a comment request.
Islamabad appears to be recalibrating its efforts as it takes in the magnitude of the balance act it has undertaken.
Kuwait, which was involved in the initial talks between Pakistan and Saudi Arabia, pushed for an agreement that was largely similar. Sources said that Pakistani officials were wary of establishing deeper military ties with a Gulf state which was exposed to Iranian bombardment. They therefore scaled back the talks.
Last month, the two countries signed a more limited protocol covering border security, training and capacity building. This was far from what Kuwait had expected.
On Thursday, foreign ministry spokesman Khan said there were no ?plans to expand the broader Pakistan-Saudi-Turkey alliance to new members at the moment.
MEDIATOR OR COMBATANT:
Farzana Shaikh is an associate fellow of Chatham House. She questioned if Tehran's faith in Islamabad has ever been as solid as presumed.
She claimed that Pakistan did not possess the same level of expertise or wherewithal that Qatar and Oman could have provided, and that Islamabad’s increased role was due less to its diplomatic capital and more to "the friendship" between Donald Trump and Pakistani field marshal Asim Munir.
Trump has repeatedly called Munir "his favorite field marshal", following a 'charm offensive' by Pakistan centered around crypto deals and American access to rare mineral deposits, as well as counterterrorism.
Some argue that the role of Islamabad as a?mediator may not be affected by this.
Kamran Bokhari is a Washington-based analyst of Pakistan-Iran Relations. He said that Tehran engages Islamabad because it aligns itself with Riyadh, and Washington.
He said that Islamabad’s alignment allows it to deliver messages in a way a neutral party cannot. This is the exact value Riyadh, and Washington, are counting on, when they route their messages through?Islamabad.
An escalation of fighting between Saudi Arabia and the Houthis could change this calculus.
Bokhari said, "Relaying and shaping a message is one thing, but active air-defense support or intelligence?support are another. This is what turns Pakistan from a stakeholder to a combatant."
Pakistan has the seventh largest military in the entire world, measured by the number of active military personnel. It had already sent thousands of soldiers, as well as a squadron fighter jets, to Saudi Arabia, under an earlier defence agreement. Islamabad, which has troops deployed on Pakistan's border with India as well as fighting insurgencies across the western provinces of Pakistan and along its tense border to India, is now trying temper demands from other Gulf States eager for similar assurances.
Bokhari stated that the Pakistani forces were stretched, and any additional commitments would be "daunting".
(source: Reuters)