PPI Accelerates to 5.4% and Brent Briefly Tops $108 — the 10-Year Hits 4.95%, Up Nearly a Full Point Since the War Began
Data:
Main Theme: “Energy Pass-Through Reaches the Wholesale Data” — August producer prices rose 0.4% in line with consensus, but the annual rate accelerated to 5.4% from 4.8% and energy costs jumped 4.2% after two months of declines. Brent briefly topped $108, the 10-year reached 4.95%, and hike odds moved to more than 70%. The S&P fell for a fourth straight session.
Thursday delivered the first hard evidence that the oil shock is entering the official inflation data. The producer price index rose a seasonally adjusted 0.4% in August, matching the Dow Jones consensus — but the annual rate accelerated to 5.4% against a 5.3% expectation and up from 4.8% in July. Energy prices increased 4.2% over the month after declining for two straight months, and wholesale food prices edged up 0.1% after dropping 0.9%.
The market repriced the September meeting immediately. Traders moved to roughly 70% odds of a 25 basis point increase — CNBC put it above 73% on the CME FedWatch gauge — up from 62% earlier in the session. The two-year Treasury yield reached its highest level in more than two years at 4.55%.
Oil went considerably further than that. Brent crude briefly topped $108 a barrel as the war with Iran continues to clog the global flow of crude, and US oil hit $100. Treasury yields leaped on inflation worries, with the 10-year jumping to 4.95% — up nearly a full percentage point since the war with Iran began.
Equities fell for a fourth consecutive session. The S&P 500 dropped 44.66 points (0.6%) to 7,591.70, the Dow Jones Industrial Average fell 316.56 points (0.6%) to 52,064.10, the Nasdaq Composite declined 171.62 points (0.7%) to 26,081.72, and the Russell 2000 fell 30.29 points (1.0%) to 2,890.95.
🟥 U.S. Equities | A Fourth Straight Loss
| Index | Close | Change | % | Week to date |
| S&P 500 | 7,591.70 | 🟥 −44.66 | −0.6% | −126.90 (−1.6%) |
| Dow Jones Industrials | 52,064.10 | 🟥 −316.56 | −0.6% | −1,350.15 (−2.5%) |
| Nasdaq Composite | 26,081.72 | 🟥 −171.62 | −0.7% | −425.27 (−1.6%) |
| Russell 2000 | 2,890.95 | 🟥 −30.29 | −1.0% | −84.70 (−2.8%) |
It was the S&P 500’s fourth straight loss. The Russell 2000 remains the worst performer of the week at −2.8%, followed by the Dow at −2.5% — the two indices most exposed to financing costs and to the operating economy respectively.
Year-to-date the picture is still positive but narrowing: the S&P is up 746.20 points (10.9%), the Dow 4,000.81 points (8.3%), the Nasdaq 2,839.73 points (12.2%) and the Russell 2000 409.04 points (16.5%).
Oracle and Adobe were among the companies scheduled to report earnings on Thursday. Weekly initial jobless claims and August existing home sales were also released.
📰 PPI | In Line at the Headline, Hot in the Detail
| Measure | August | Consensus | Prior |
| PPI (MoM) | +0.4% | +0.4% — in line | +0.1% (revised up from 0.0%) |
| PPI (YoY) | 5.4% | 5.3% | 4.8% — accelerating |
| Core PPI (MoM) | +0.2% | +0.3% | Below forecast |
| Core PPI (YoY) | 4.6% | 4.6% — in line | 4.3% |
| Core less trade services | +0.3% | — | — |
| Energy prices (MoM) | +4.2% | — | After two straight monthly declines |
| Wholesale food (MoM) | +0.1% | — | −0.9% in July |
Charles Schwab’s summary captured the split: the report was “mostly as expected, showing headline growth of 0.4%. However, several key metrics were hot.”
The genuinely important line is energy at +4.2% month-on-month after two consecutive monthly declines. This is the first clear appearance of the oil shock in the official inflation statistics. Brent was near $88 for much of August and has since closed above $101 and briefly topped $108 — meaning the September producer data will carry considerably more.
The dovish element is core. At +0.2% month-on-month, core PPI came in below the 0.3% forecast — though the annual core rate still accelerated to 4.6% from 4.3%, and core less trade services rose 0.3%.
Investrade noted the sequencing precisely: “Today’s PPI report pushed up expectations for a Federal Reserve interest rate hike next week while rallying oil prices also prompted inflation worries.”
At 5.4%, annual producer inflation is running far above the Fed’s 2% target and well above consumer inflation at 3.4% — a gap that represents margin pressure on corporates before it represents a policy problem.
🟦 Rates | The 10-Year at 4.95%
Treasury yields leaped on increased worries about inflation, with the 10-year jumping to 4.95%. The Associated Press supplied the framing that matters most: that is up nearly a whole percentage point since the war with Iran began.
The two-year yield reached its highest level in more than two years at 4.55%, reflecting the repricing of the September meeting rather than the term premium.
This continues Wednesday’s pattern and confirms it. The Treasury announced on Wednesday it would triple its buyback of longer-dated debt to $6 billion — specifically buying up to $6 billion in 10- to 20-year Treasury bonds during an operation held on Thursday — and the 10-year rose to 4.857% on the announcement, then to 4.95% on Thursday.
Three official interventions in three weeks have now been followed by yields at successively higher levels. The 19 August doubling to at least $4 billion was retraced within two sessions; the 24 August general account signal faded; and the 9 September tripling to $6 billion has been followed by a further nine basis point rise.
🛢️ Oil | Brent Briefly Above $108
Brent crude briefly topped $108 a barrel, its highest point since July, because the war with Iran continues to clog the global flow of crude. US oil hit $100.
The move from Wednesday’s close above $101 is roughly $7 in a single session, and it comes after a run in which WTI has risen in eight of the past nine sessions.
The escalation sequence over the past twelve days explains it:
- 31 August: two Saudi supertankers struck by projectiles minutes apart, outbound through the Strait.
- 2 September: Iran’s Revolutionary Guards said tankers struck naval mines on an “illegal route.”
- 5–6 September: US forces struck three Iranian oil tankers.
- 8 September: attacks reported on Saudi Arabia’s oil facilities; a previously undisclosed second Iranian salvo against US Navy ships emerged after the settle.
- 10 September: Brent briefly above $108.
Bill Adams, chief US economist at Fifth Third Commercial Bank, drew the policy conclusion directly: “The September Fed decision looked finely balanced at the turn of the month. September’s surge in energy prices will likely tip the balance towards a hike when the Fed meets next week.”
📉 Breadth | A Warning and a Counterpoint
Two breadth statistics circulated on Thursday and they point in opposite directions. Both deserve recording.
The warning: the S&P 500 McClellan Oscillator fell below −72, its lowest level in more than five months. After similar signals, the S&P was lower 10 of 13 times five days later. As the analysis put it: “Not a good sign heading into next week’s FOMC.”
The counterpoint is more interesting and less widely noticed. Wednesday was the third worst breadth day of 2026 for the S&P 500, with more than 60% of index constituents down. But 2026 has seen just three such days in total — the fewest since 2010, making this one of the best years for breadth in more than two decades.
Both can be true and the reconciliation matters. Breadth has been exceptionally healthy across the year, which supports the constructive case JPMorgan’s Mislav Matejka made on Wednesday. But it is deteriorating sharply right now, and the McClellan reading is a short-horizon signal with a poor five-day forward record.
Investrade’s framing: “market breadth has been negative and standing out despite major averages remaining not far off record highs.”
📌 Reading the Session
- The oil shock has reached the official data. Wholesale energy prices rose 4.2% in August after two months of declines, and that is measured against a month when Brent averaged near $88. With Brent briefly above $108, the September producer and consumer data will carry far more — and it arrives after the Fed has decided.
- The 10-year at 4.95% is up nearly a full percentage point since the war began. Three Treasury interventions in three weeks have each been followed by higher yields. The long end is not responding to official support.
- Hike odds moved from 62% to above 70% on a report whose core component came in below forecast. That tells you the market is now weighting the energy and headline lines over the core — which is Warsh’s framework, and which Bill Adams says will “tip the balance towards a hike.”
Friday: August CPI at 8:30am ET — the last inflation reading before the 15–16 September FOMC. Dow Jones consensus is 0.4% monthly headline and 3.4% annual, with core at 0.2% and 2.4%.
Companies
Theme: “Nowhere to Hide Except the Barrel” — A fourth consecutive decline with the Russell 2000 down 2.8% on the week and the Dow down 2.5%. Oracle and Adobe reported into a market where the 10-year sits at 4.95% and Brent briefly touched $108.
Thursday was another rates-and-oil session with little idiosyncratic corporate news. The value in the day is in what the index composition reveals about where the damage is concentrating, and in two reports that landed into an unusually hostile discount-rate environment.
📊 1. The Week’s Damage Is Structural, Not Random
Week-to-date through Thursday: the Russell 2000 is down 2.8%, the Dow 2.5%, the S&P 1.6% and the Nasdaq 1.6%.
That ordering is not noise. It maps precisely onto the two shocks running simultaneously.
| Index | Week to date | Why |
| Russell 2000 | −2.8% | Floating-rate debt and short refinancing horizons — most exposed to a 10-year at 4.95% |
| Dow Jones | −2.5% | Industrials, transport, consumer, healthcare — most exposed to $108 Brent and financed demand |
| S&P 500 | −1.6% | Cap-weighted, cushioned by megacap technology |
| Nasdaq Composite | −1.6% | Technology has no direct energy input cost |
The market is not selling growth. It is selling leverage and energy consumption. That is a different episode from mid-August, when a synchronised global long-bond selloff took the semiconductor gauge down 5.5% in a session and technology led the decline.
For allocation purposes the distinction is actionable. A duration shock is addressed by shortening duration. A combined rate-and-input-cost shock is addressed by owning the input and avoiding balance-sheet leverage — which is why energy remains the year’s best sector while small caps have given back most of the lead they held on 13 August, when the Russell set its 27th record close of 2026.
💾 2. Oracle and Adobe Report Into a 4.95% Ten-Year
Oracle and Adobe were among the companies scheduled to report on Thursday.
Both arrive into the reaction function this publication has documented throughout the reporting season: the market pays for forward visibility and cash generation, and charges heavily for their absence.
The precedents from the past three weeks are consistent. Nvidia rose 8.4% on a $108 billion guide and a roughly 70% fiscal 2028 growth projection. Analog Devices rose on a 52% adjusted operating margin. Marvell fell 8% for declining to put numbers on fiscal 2028 despite a Google partnership worth up to $12.2 billion in shares. Broadcom fell 5% on a fourth-quarter guide roughly 0.7% below consensus, after revenue grew 86% and semiconductor revenue tripled.
Oracle carries a specific overhang. It has fallen repeatedly this cycle on concerns that its AI spending bill is catching up with it — the same free-cash-flow question that hit Meta on 29 July and that Nvidia answered only partially when its own free cash flow halved to $21.3 billion while it raised roughly $24.9 billion in new debt.
Adobe sits in the category the market has rewarded — application-layer software that consumes AI compute rather than funding it. GitLab rose 21% on 9 September, Salesforce 11.2% and CrowdStrike 9% on 27 August, all outpacing the hardware complex. But Adobe also carries genuine AI-displacement risk in creative tooling, a concern the market applied aggressively to DocuSign earlier in the year before partially unwinding it.
⛽ 3. Energy Remains the Only Sector Working
With Brent briefly above $108 and US oil at $100, the energy complex continues to be the year’s outlier.
The position as of 31 August: energy up 43% for 2026, leading all eleven S&P sectors, and up 21% quarter-to-date. On 8 September the SPDR S&P Oil & Gas Exploration & Production ETF reached its highest level since June 2015 — a decade high. On 9 September Occidental, APA, ConocoPhillips, Chevron and ExxonMobil all bounced as Brent cleared $100.
The consistent feature of the buying is that investors are selecting production that cannot be interdicted. US independents with Permian assets, integrated majors with diversified portfolios, and national oil companies outside the Gulf have all outperformed — this is a considered trade rather than indiscriminate energy beta.
The crowding risk has grown in proportion. Commonwealth Bank of Australia’s framework put Brent at $70–100 for the second half, with the downside triggered by Hormuz flows recovering to just 50–60% of pre-war quantities. Brent briefly at $108 is above the top of that range, and with naval mines reportedly laid, both sides striking tankers and Saudi facilities attacked, the recovery condition is more remote than at any point in this conflict. The upside case is stronger; any genuine resolution would be correspondingly more violent.
📌 Analyst Take
The most useful corporate-level observation from Thursday is what the PPI detail implies for margins across the market.
Annual producer inflation accelerated to 5.4% while consumer inflation is expected at 3.4% on Friday. A two-percentage-point gap between what companies pay and what they can charge is margin compression, and it has been visible in company reporting for a month.
Campbell’s named it exactly on 3 September: “top-line softness and inflation-driven margin pressure.” Cisco guided fiscal Q1 gross margin below consensus on 13 August while announcing a 3.4–4.0% global price increase across core hardware — a company raising prices and still expecting lower margins. Applied Materials reported record revenue with free cash flow down 80%.
Energy at +4.2% month-on-month in the wholesale data, measured in a month when Brent averaged near $88, means that pressure intensifies from here. With Brent briefly at $108, the September producer data will be materially worse — and third-quarter earnings season, which begins in October, will report against it.
The sectors with genuine pricing power are the ones to identify now. ISM Services new orders reached 60.9 on 3 September, a three-and-a-half-year high, alongside prices at 72.6 — services businesses are both busy and passing costs through. Goods producers, transport and consumer-facing businesses do not have that combination, which is why the Dow has fallen 2.5% on the week while the cap-weighted S&P has fallen 1.6%.
General
Thursday, September 10th, 2026: The Shock Enters the Data
For six weeks the argument about the September Federal Reserve decision has turned on whether the inflation impulse is domestic or imported. Thursday supplied the first official measurement of the imported component: wholesale energy prices rose 4.2% in August after two consecutive monthly declines, pushing annual producer inflation to 5.4% from 4.8%.
And it did so measuring a month in which Brent averaged near $88. Brent briefly topped $108 on Thursday. The data the Federal Reserve will decide on next week describes an energy environment that no longer exists.
- What the PPI Detail Actually Shows
The headline was in line and the composition was not.
| Component | August | Interpretation |
| Headline PPI (MoM) | +0.4% | In line with consensus |
| Headline PPI (YoY) | 5.4% vs 5.3% expected | Accelerating from 4.8% — well above the 2% target |
| Core PPI (MoM) | +0.2% vs +0.3% expected | Below forecast — the dovish element |
| Core PPI (YoY) | 4.6% | Accelerating from 4.3% |
| Core less trade services | +0.3% | Hot |
| Energy (MoM) | +4.2% | After two consecutive monthly declines |
| Wholesale food (MoM) | +0.1% | After −0.9% in July |
| July revision | +0.1% | Revised up from 0.0% |
Charles Schwab described it as “mostly as expected, showing headline growth of 0.4%. However, several key metrics were hot.” That is the correct reading: the monthly core number was the only genuinely soft line, and both annual rates accelerated.
The energy component is the one that changes the analysis. A 4.2% monthly increase after two months of declines is the reversal of the disinflationary energy contribution that helped produce benign CPI prints in July and August. It is the mechanism by which a supply shock becomes a measured inflation problem.
And the timing is unfavourable in a specific way. August PPI measures August. Brent traded near $88 for much of that month, closed above $101 on 9 September and briefly topped $108 on 10 September. The September data — which will capture that — is released after the FOMC has already decided.
- Why Hike Odds Rose on a Soft Core Number
This is the most analytically revealing feature of the session and it deserves explanation.
Core PPI came in at +0.2% month-on-month against a +0.3% forecast — a downside surprise. Yet traders moved from 62% to roughly 70% odds of a hike, with CNBC citing above 73% on the CME FedWatch gauge.
The market is weighting the headline and energy lines over the core. That is a departure from the standard framework, and it reflects two things.
First, Warsh has told the market to do so. At Jackson Hole he said financing conditions “didn’t look restrictive,” that this summer’s better readings “do not tell me that underlying trends have meaningfully improved,” and that the 2% PCE target is “firm and fixed.” Professor Jeremy Siegel argued on 2 September that Warsh has shifted the Fed’s input set toward money supply, bank credit, commodity prices and credit spreads rather than lagging core data. On that framework, a 4.2% jump in wholesale energy matters more than a tenth on core.
Second, expectations are the transmission mechanism. Headline inflation is what households and businesses observe. Core is a statistical construct designed to filter noise — and a six-month war that has taken Brent from the $80s to $108 is not noise. St. Louis Fed President Musalem warned on 6 August that inflation expectations remain anchored but that conditions are fertile for them to become unanchored.
Bill Adams of Fifth Third Commercial Bank stated the conclusion plainly: “The September Fed decision looked finely balanced at the turn of the month. September’s surge in energy prices will likely tip the balance towards a hike when the Fed meets next week.”
Governor Waller had set the test in advance: he said he was willing to support holding rates if inflation continued moving toward the 2% goal, but would consider a hike if August inflation “comes in hot.”
- Nearly a Full Percentage Point Since the War Began
The Associated Press supplied the single most useful framing of the rates move: the 10-year yield jumped to 4.95%, up nearly a whole percentage point since the war with Iran began.
That is the cumulative cost of this conflict expressed in the risk-free rate, and it is worth setting against the interventions attempted.
| Date | Action or event | 10-year yield |
| Pre-war (late February) | — | Below 4% |
| 19 Aug | Treasury doubles buybacks to at least $4bn | Retraced within two sessions |
| 24 Aug | Report: $1 trillion general account available | Faded within days |
| 2 Sept | — | 4.818% — highest since November 2023 |
| 9 Sept | Treasury triples buyback to $6 billion | 4.857% — new 52-week highs |
| 10 Sept | PPI 5.4%; Brent briefly $108 | 4.95% |
Three official interventions in three weeks have each been followed by higher yields. The Treasury bought up to $6 billion of 10- to 20-year bonds during Thursday’s operation, and the 10-year rose nine basis points on the day.
The two-year at 4.55%, its highest in more than two years, is a different signal. That reflects the repricing of the September meeting rather than the term premium — which means the curve is now being pushed higher from both ends simultaneously: policy expectations at the front, fiscal and inflation persistence at the back.
For equities that combination is the most difficult available. A rising front end compresses multiples; a rising back end compresses them further and raises the cost of the corporate borrowing that has been funding the AI capital cycle — roughly $600 billion since last year, with $135 billion of convertible issuance year-to-date and just under half of that from the AI industry.
- The Breadth Argument Cuts Both Ways
Two statistics circulated on Thursday that appear contradictory and are not.
The near-term warning: the S&P 500 McClellan Oscillator fell below −72, its lowest level in more than five months. After similar signals, the S&P was lower 10 of 13 times five days later — “not a good sign heading into next week’s FOMC.”
The structural counterpoint: Wednesday was the third worst breadth day of 2026, with more than 60% of S&P constituents declining. But 2026 has produced only three such days in total — the fewest since 2010, making it one of the best years for breadth in more than two decades.
The reconciliation is that a market with genuinely healthy underlying participation is experiencing a sharp but concentrated deterioration. Investrade’s observation captures it: “market breadth has been negative and standing out despite major averages remaining not far off record highs.”
That supports both the constructive and the cautious case, and clients should hear both.
The constructive version is JPMorgan’s. Mislav Matejka wrote on Wednesday that “the downside risk to the overall market should be easing,” citing index resilience near record highs, an expectation that the momentum unwind is nearly complete, and an anticipated broadening in the second half. A year with only three heavy-decline days since 2010 is consistent with that.
The cautious version is in the composition of the current deterioration. The Russell 2000 is down 2.8% on the week and the Dow 2.5%, against 1.6% for the S&P and Nasdaq. Broadening requires small and mid caps to lead, and they cannot lead with the 10-year at 4.95%. The breadth that has been so healthy all year is being removed by the rate move specifically.
- Friday Is the Last Data Before the Decision
The Bureau of Labor Statistics releases the August consumer price index at 8:30am ET on Friday. It is the last piece of the inflation puzzle the Federal Reserve will receive before deciding on rates next week.
| Measure | Dow Jones consensus | Prior |
| Headline CPI (MoM) | +0.4% | — |
| Headline CPI (YoY) | 3.4% | 3.4% |
| Core CPI (MoM) | +0.2% | — |
| Core CPI (YoY) | 2.4% | 2.5% |
The threshold is unusually precise and unusually narrow. A 0.2% core reading would strengthen the case for waiting. A 0.3% print would make the argument for a September hike considerably stronger. One tenth of a percentage point separates the two outcomes.
Combined with Thursday’s producer price data, the CPI will also tell Federal Reserve officials what their primary inflation gauge — the personal consumption expenditures price index — will show when it is released at the end of September, after the meeting.
Expectations have been volatile and highly dependent on data and on fluctuating energy prices. Polymarket traders put the chance of a September hike near 50% at the start of the week; it now sits above 70% after PPI. Three Fed officials — Hammack, Kashkari and Logan — already voted to raise rates by 25 basis points at the July meeting.
📊 Global Macro Sentiment Summary — Thursday, September 10th, 2026
| Narrative Channel | Core Fundamental Trigger | Net Portfolio Posture |
| Index Structure | S&P −0.6% to 7,591.70 (fourth straight loss); Dow −316.56 (−0.6%); Nasdaq −0.7%; Russell −1.0% | 🟥 Broad decline |
| Week to date | Russell −2.8%, Dow −2.5%, S&P and Nasdaq −1.6% | 🟥 Leverage and energy consumption sold |
| Producer prices | PPI +0.4% MoM in line; 5.4% YoY vs 5.3% expected, up from 4.8% | 🟥 Accelerating |
| Energy pass-through | Wholesale energy +4.2% MoM after two months of declines | 🟥 The shock enters the data |
| Core PPI | +0.2% MoM vs +0.3% expected; but 4.6% YoY from 4.3% | 🟨 The only soft line |
| Rates | 10-year 4.95% — up nearly a full point since the war began; 2-year 4.55%, highest in over two years | 🟥 Both ends rising |
| Oil | Brent briefly topped $108; US oil hit $100 | 🟥 Above the $70–100 range |
| Fed pricing | ~70%, CNBC citing above 73% — up from 62% earlier | 🟥 Repriced on headline, not core |
| Breadth — warning | McClellan Oscillator below −72, lowest in 5+ months; S&P lower 10 of 13 times five days later | 🟥 Near-term |
| Breadth — counterpoint | Only three 60%-decliner days in 2026 — fewest since 2010 | 🟩 Structurally healthy |
| Friday | August CPI: consensus 0.4% headline / 3.4% annual; core 0.2% / 2.4% | 🔴 0.2% vs 0.3% decides it |
Compliance and framing notes. Note explicitly that core PPI came in below forecast at 0.2% — presenting the report as uniformly hot would be inaccurate. Hike odds varied by source between roughly 70% and above 73% — cite a range. And the breadth statistics should be presented together: the McClellan warning is short-horizon, while 2026 has had the fewest heavy-decline days since 2010.
Upcoming News
Friday, September 11th, 2026 — Theme: “One Tenth of a Percentage Point” — August CPI arrives at 8:30am ET as the final inflation reading before the FOMC, with a 0.2% core print strengthening the case for holding and a 0.3% print making the argument for a hike considerably stronger.
Friday is the last data the Federal Reserve receives before it decides. CNBC characterised it as “even more important than usual,” and the reason is the precision of the threshold: the entire meeting may turn on whether core inflation prints at 0.2% or 0.3%. Traders have already moved to above 70% odds of a hike following Thursday’s producer price data, from near 50% on Polymarket at the start of the week.
🔴 Calendar — Friday, September 11th, 2026
Times in ICT (Hanoi). ET is ICT minus 11 hours.
| Time (ICT) | Currency | Event / Indicator | Consensus | Impact |
| 19:30 | USD | August CPI (MoM) | +0.4% | 🔴 High |
| 19:30 | USD | August CPI (YoY) | 3.4% | 🔴 High |
| 19:30 | USD | August Core CPI (MoM) | +0.2% | 🔴 High |
| 19:30 | USD | August Core CPI (YoY) | 2.4% (from 2.5%) | 🔴 High |
| 21:00 | USD | University of Michigan Consumer Sentiment — September preliminary | — | 🟠 Med |
| 00:00 (Sat) | USD | Baker Hughes Rig Count | — | 🟢 Low |
| 15–16 Sept | USD | FOMC decision and dot plot | >70% odds of a 25bp hike | 🔴 High |
- Why One Tenth Decides the Meeting
The framing comes from the Fed itself. Governor Christopher Waller said he was willing to support holding rates if inflation continued moving toward the 2% goal, but would consider a hike if August inflation “comes in hot.”
That converts a statistical release into a binary. A 0.2% core reading would strengthen the case for waiting. A 0.3% print would make the argument for a September hike considerably stronger.
The context that makes the threshold so sharp:
- Three Fed officials — Hammack, Kashkari and Logan — already voted to raise rates by 25 basis points at the July meeting, in the first three-way same-direction dissent since September 2016.
- The employment objection was removed on 4 September when payrolls came in at 162,000 against a 53,000 consensus with participation improving and prior months revised up 55,000.
- ISM Services prices reached 72.6 on 3 September, with the twelve-month average at its highest since April 2023 — establishing that services inflation is domestic rather than energy-imported.
- Thursday’s PPI showed wholesale energy up 4.2% and annual producer inflation accelerating to 5.4%.
What to watch inside the release:
Core services excluding shelter — the series that maps to the ISM Services prices reading and the cleanest test of whether the pressure is genuinely domestic.
The core CPI to core PCE gap — core CPI is expected at 2.4% while core PCE stood at 3.3% at the last reading. Warsh named the 2% PCE target as “firm and fixed,” which indicates which measure the committee weights. Combined with Thursday’s PPI, the CPI will tell officials what PCE will show when it is released at the end of September, after the meeting.
The energy component, with the standing caveat — August CPI measures August, when Brent averaged near $88. Brent briefly topped $108 on Thursday. A contained August energy line reflects pricing that events have overtaken.
- What Happens Under Each Outcome
| Core CPI (MoM) | Reading | Likely consequence |
| ≤ +0.1% | Clearly cool | Hike odds collapse below 50%; the front end rallies hard; small caps lead a relief rally; the dollar softens |
| +0.2% | Consensus — “strengthens the case for waiting” | Odds ease from above 70%; equities recover some of the week’s 1.6–2.8% decline |
| +0.3% | “Considerably stronger” hike argument | A September increase becomes the base case; the 10-year pushes through 5%; the Russell extends its decline |
| ≥ +0.4% | Clearly hot | Hike near-certain; a disorderly repricing across the curve and in rate-sensitive equities |
The asymmetry favours caution for a specific reason. The market has already moved from near 50% to above 70% on the producer data alone. A 0.2% core print removes some of that but leaves the energy problem entirely intact — and the September energy data, which will capture Brent above $100, is released after the Fed decides.
- Carry-Over Into Friday
- August PPI rose 0.4% month-on-month in line with consensus, but the annual rate accelerated to 5.4% against 5.3% expected and up from 4.8%. Core PPI rose 0.2% against a 0.3% forecast, with the annual core rate at 4.6% from 4.3%. Wholesale energy prices rose 4.2% after two consecutive monthly declines.
- Brent crude briefly topped $108 and US oil hit $100. The 10-year Treasury yield jumped to 4.95%, up nearly a full percentage point since the war with Iran began; the two-year reached 4.55%, its highest in more than two years.
- The S&P 500 fell 0.6% to 7,591.70 for a fourth straight loss; the Dow fell 316.56 points to 52,064.10; the Nasdaq fell 0.7% to 26,081.72; the Russell 2000 fell 1.0% to 2,890.95.
- Hike odds moved to roughly 70%, with CNBC citing above 73% on the CME FedWatch gauge, up from 62% earlier in the session.
- The S&P 500 McClellan Oscillator fell below −72, its lowest in more than five months — a signal after which the index has been lower 10 of 13 times five days later.
- Oracle and Adobe reported Thursday.
- The Meeting and What Follows
| Date | Event | Why it matters |
| Fri 11 Sept | August CPI; UMich September preliminary | The last data before the decision |
| 15–16 Sept | FOMC decision and dot plot | >70% odds of a 25bp hike; first three-way dissent since 2016 already on record |
| Late September | August core PCE | Released after the meeting — the Fed’s primary gauge |
Two structural risks to carry into the decision.
The data lag. Every inflation reading the committee will use describes August, when Brent averaged near $88. The energy shock that has taken Brent briefly above $108 will not be measured until data released after the meeting. That is a genuine information problem for a committee that has said it weights commodity prices.
The political dimension. President Trump publicly demanded rate cuts on 4 September, telling the Fed Board it “must get smart — BE PATRIOTS for a change.” The Treasury has separately escalated bond buybacks three times in three weeks — to $6 billion on Wednesday — with yields rising each time. A hike delivered against explicit presidential opposition would move the central bank independence question from theoretical to observed, and that transmits through the dollar and the term premium rather than the policy rate.
Compliance note: CPI consensus figures are the Dow Jones estimates as reported by CNBC; other providers may differ — verify against your own terminal. Hike odds varied between roughly 70% and above 73% across sources on Thursday. And present the central bank independence question as a risk factor to monitor rather than as a prediction about the decision.
Snapshot
Thursday, September 10th, 2026 — Theme: “The Shock Reaches the Statistics” — Wholesale energy prices rose 4.2% after two months of declines, pushing annual producer inflation to 5.4% from 4.8%. Brent briefly topped $108, the 10-year hit 4.95% — up nearly a full point since the war began — and hike odds moved above 70%. The S&P fell for a fourth session.
Thursday supplied the first official measurement of the oil shock entering the inflation data, and the market repriced the September meeting on it. August producer prices rose 0.4% in line with consensus, but the annual rate accelerated to 5.4% and wholesale energy jumped 4.2% after two consecutive monthly declines. Critically, hike odds rose from 62% to above 70% even though core PPI came in below forecast — the market is now weighting energy and headline over core, which is the framework Chair Warsh described at Jackson Hole.
🏛️ The Bottom Line
(Sources: Bureau of Labor Statistics / CNBC / Associated Press / Investrade / Charles Schwab)
The S&P 500 fell 44.66 points, or 0.6%, to 7,591.70 — its fourth straight loss. The Dow Jones Industrial Average fell 316.56 points, or 0.6%, to 52,064.10. The Nasdaq Composite fell 171.62 points, or 0.7%, to 26,081.72. The Russell 2000 index of smaller companies fell 30.29 points, or 1.0%, to 2,890.95. Week-to-date, the Russell is down 2.8%, the Dow 2.5%, and the S&P and Nasdaq 1.6% each.
The producer price index, a measure of final-demand costs for goods and services, increased a seasonally adjusted 0.4% in August, in line with the Dow Jones consensus. On an annual basis that put PPI at 5.4% — still well above the Fed’s 2% inflation target and 0.1 percentage point higher than expected, up from 4.8% in July. PPI rose 0.1% in July, a slight upward revision from the original estimate of no change.
Excluding food and energy, core PPI accelerated by 0.2%, against the forecast for a 0.3% increase; the annual core rate rose to 4.6% from 4.3%. Core less trade services was up 0.3%. Energy prices increased 4.2% over the month after declining for two straight months, and wholesale food prices edged up 0.1% after dropping 0.9% in July.
Charles Schwab described the report as “mostly as expected, showing headline growth of 0.4%. However, several key metrics were hot and U.S. oil hit $100, pressuring Wall Street early.”
Brent crude briefly topped $108 a barrel because the war with Iran continues to clog the global flow of crude. Treasury yields leaped on increased worries about inflation, with the 10-year jumping to 4.95% — up nearly a whole percentage point since the war with Iran began. The two-year Treasury yield reached its highest level in more than two years at 4.55%.
After the data, traders were betting on roughly a 70% chance the Fed would raise rates by 25 basis points at its 15–16 September meeting, up from 62% earlier; CNBC cited more than 73% on the CME Group’s FedWatch gauge. Yields had climbed on Wednesday after the Treasury Department said it will buy up to $6 billion in 10- to 20-year Treasury bonds during its buyback operation held on Thursday.
On breadth, the S&P 500 McClellan Oscillator fell below −72, its lowest level in more than five months; after similar signals the index was lower 10 of 13 times five days later. Against that, 2026 has seen just three days with more than 60% of S&P constituents declining — the fewest since 2010, making it one of the best years for breadth in more than two decades.
Bill Adams, chief US economist at Fifth Third Commercial Bank: “The September Fed decision looked finely balanced at the turn of the month. September’s surge in energy prices will likely tip the balance towards a hike when the Fed meets next week.” Oracle and Adobe were among the companies reporting Thursday.
📉 Reference Levels for the Friday Open (September 11th)
Derived from recent session closes and range extremes — not vendor-published levels. Verify against your own charts.
| Asset | Support | Resistance | Operational Bias |
| S&P 500 | 7,591 → 7,500 | 7,636 → 7,798.99 (record) | 🟥 Fourth straight loss |
| Dow Jones | 52,064 → 52,000 | 52,380 → 53,414 | 🟥 −2.5% week-to-date |
| Nasdaq Composite | 26,081 → 26,000 | 26,253 → 26,803 | 🟥 −1.6% week-to-date |
| Russell 2000 | 2,890 → 2,850 | 2,921 → 3,045 | 🟥 −2.8% week-to-date |
| US 10Y Yield | 4.857% | 4.95% → 5.00% | 🟥 +~100bp since the war began |
| US 2Y Yield | 4.35% | 4.55% — highest in 2+ years | 🟥 Policy repricing |
| Brent Crude | $101 → $95 | $108 → $115 | 🟥 Above the $70–100 range |
| WTI Crude | $95 | $100 → $105 | 🟥 Eight of nine sessions higher |
| Energy sector | — | +43% YTD, best of 11 | 🟩 The only sector working |
📊 Market Sentiment & Bias
Inflation: 🟥 The energy shock has entered the data. Wholesale energy +4.2% after two months of declines; annual PPI at 5.4% from 4.8%. And this measures August, when Brent averaged near $88.
Core: 🟨 The only soft line. Core PPI at 0.2% against a 0.3% forecast — but the annual rate still accelerated to 4.6% from 4.3%.
Rates: 🟥 Rising from both ends. The 10-year at 4.95%, up nearly a full point since the war began; the two-year at 4.55%, the highest in more than two years.
Fed pricing: 🟥 Above 70%, from 62% earlier in the session and near 50% on Polymarket at the start of the week — and it repriced on a soft core number.
Breadth: ⚠️ Deteriorating from a healthy base. McClellan below −72, lowest in five months, against a year with the fewest heavy-decline days since 2010.
Friday: 🔴 One tenth of a percentage point. A 0.2% core CPI strengthens the case for waiting; 0.3% makes the hike argument considerably stronger.
💡 Top Trade Takeaway: “The Fed Will Decide on Data That No Longer Describes the World”
Focus: Recognise that every inflation reading the committee will use predates Brent crossing $100. Watch the Russell 2000 for the fastest read on Friday’s print. Retain energy while acknowledging it now trades above the range analysts had set. Keep gross exposure moderate into a decision that may turn on a single decimal.
Logic. Thursday delivered the first official measurement of the oil shock reaching the inflation statistics. Wholesale energy prices rose 4.2% in August after two consecutive monthly declines, pushing annual producer inflation to 5.4% from 4.8% — above the 5.3% expected. That is the reversal of the disinflationary energy contribution that produced the benign summer prints, and it is the mechanism by which a supply shock becomes a measured inflation problem.
The most revealing feature of the session was that hike odds rose from 62% to above 70% even though core PPI came in at 0.2% against a 0.3% forecast — a downside surprise. The market is weighting the headline and energy lines over the core, which is precisely the framework Warsh set out at Jackson Hole when he said the summer’s better readings “do not tell me that underlying trends have meaningfully improved” and that financing conditions “didn’t look restrictive.” Fifth Third’s Bill Adams stated the conclusion: September’s surge in energy prices “will likely tip the balance towards a hike.”
The rates consequence is now cumulative and large. The 10-year at 4.95% is up nearly a whole percentage point since the war with Iran began, and the two-year at 4.55% is at its highest in more than two years. The curve is being pushed higher from both ends simultaneously — policy expectations at the front, fiscal and inflation persistence at the back. That is the hardest combination for equities, and the week’s damage confirms it: the Russell 2000 down 2.8% on floating-rate exposure and the Dow down 2.5% on energy costs and financed demand, against 1.6% for the cap-weighted S&P.
The structural problem for the committee, and the one clients should understand, is the data lag. Every inflation reading the Fed will use next week describes August, when Brent averaged near $88. Brent briefly topped $108 on Thursday. The energy shock that has driven the 10-year up nearly a full point will not be measured until data released after the meeting. A committee that has explicitly said it weights commodity prices is being asked to decide on statistics that predate the commodity move.
Calendar discipline: Friday 11 September — August CPI at 8:30am ET, the last data before the decision. Consensus is 0.4% headline and 3.4% annual, with core at 0.2% and 2.4%. A 0.2% core reading strengthens the case for waiting; 0.3% makes the hike argument considerably stronger. Watch core services excluding shelter against ISM Services prices at 72.6, and note that the energy component reflects August pricing. 15–16 September — FOMC and dot plot, with above 70% odds of a 25 basis point hike priced. Late September — August core PCE, released after the meeting.
The report belongs to The Concept Trading and Van Hung Nguyen
