Major indices are all in the red as Middle Eastern tensions push oil over the $85 level.

As a result of this oil rise, Energy (XLE) remains the only sector in the green. Technology (XLK) is mixed, showing some resilience and moving around its baseline. Meanwhile, Communication Services (XLC) are at the bottom of the list with weakness in its Magnificent Seven components, Alphabet (GOOG/L) and Meta Platforms (META). Additionally, Take-Two Interactive (TTWO) is adding downward pressure in the sector as their highly anticipated GTA 6 game continues to be targeted by a viral hacker.

The move in oil is also adding a bit of upward pressure to yields, with the ten-year treasury yield edging above the 4.75% level.

Bessent at the G20

The G20 finance ministers meeting kicked off this morning in Asheville, with Bessent hosting.

Bessent gave comments this morning saying Operation Economic Outcast and the blockade are squeezing Iran toward the table and pushed back on the idea it cannot work without Beijing. On bonds, he insists he is not trying to change direction or the equilibrium price, only to slow the move, while touting the U.S. as the best performing major market this month with the 30-year yield down and the 10-year flat. He would not speculate on the Fed but noted you traditionally do not hike into a supply shock, with core inflation still tame. Notably, he also indicated that growth is the way out of debt.

Japanese Yen Update

The yen is strengthening back below the key 160 level after Bessent said he believes the Japanese government and the Bank of Japan will take steps that lead to a stronger yen. 

Chips Talk

China's CXMT has begun small-scale production of HBM3E, the high-bandwidth memory used in advanced AI processors, with Alibaba's (BABA) T-Head and Cambricon already testing it and possible product use by 2027. Yields remain low and CXMT is still likely years behind SK Hynix (SKHY), Samsung, and Micron (MU), which are mass-producing HBM4.

Nvidia (NVDA) is investing $3.5B in MediaTek convertible bonds, with MediaTek adopting NVLink Fusion and the new NVHBM technology to build custom XPUs for rack-scale AI factories. The two will also keep developing RTX Spark and DGX Spark chips for PCs, developer systems, and workstations, plus AI vehicle platforms.

In other news, Trump took to Truth to highlight the case against the anti-data center movement.

Economic Data

The Dallas Fed Manufacturing Index surged to 11.6 in August from 1.3 in July.

Production, new orders, and shipments all accelerated with capacity utilization increasing.

Additionally, future outlooks saw a rise in nearly every metric.

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