Oil Prices Climb Again
Brent crude trades near $106 per barrel. WTI sits just below $93. Prices rose during the session after President Trump rejected Iran's offer to open the Strait of Hormuz, which raised worry about global oil supplies. Americans already face sharp fuel price jumps. Diesel is at record levels. Gasoline averages $4.47 per gallon nationwide as the conflict shakes energy markets.
The Trump administration approved new, lower fuel economy rules. The U.S. fleet will need to average 34.9 miles per gallon by 2031, down from 50.4 miles per gallon under Biden-era rules. The administration says the rollback makes new cars cheaper and gives buyers more choice. Critics say less efficient cars will burn more fuel and raise carbon emissions.
Treasury Yields at 19-Year Highs
Yields rose again. The 10-year bond yield passed 5.2% and the 30-year yield passed 5.5% as a global bond sell-off pressures U.S. Treasuries. These are the highest levels in 19 years, with oil prices reviving inflation fears. Investors focus on ongoing budget deficits, heavy government borrowing, and the chance of one or more added Fed rate hikes this year. The 10-year hit its highest level since 2007, which shows how much long-term borrowing costs have risen for mortgages, corporate financing, and stock valuations.
This week's inflation and jobs data matter here, including PCE and Friday's employment report, to see if yield pressure holds. This lands right as earnings season begins.
US-China Tariff Cut and Nvidia Chips
The U.S. and China agreed to cut tariffs on goods worth $60 billion. Both sides released matching product lists worth about $30 billion each. The American side covers about 1,600 goods imported into China, mostly farm products. The Chinese side covers more than 70 categories for export to the U.S., including fireworks, household goods, toys, and Christmas decorations. Lowering tariffs before the holiday season could help American retailers and consumers, though the timing and size remain unclear. Presidents Xi and Trump plan to meet again in Shenzhen in November.
China's government reportedly signaled it will let some domestic firms like Alibaba (BABA) and ByteDance buy Nvidia (NVDA) RTX 5500 chips. Chinese authorities asked the company to report plans for this chip, which is built for high-end professional computers and is not banned, unlike Nvidia's (NVDA) most powerful accelerators. Shares of Chinese chipmakers fell overnight on worry that Nvidia's (NVDA) product would cut demand for local rivals. That trend did not carry much into the U.S. session for large tech firms.
Tomorrow's Watch List
Carnival Cruise Lines (CCL) reports in the morning. Analysts expect earnings per share to drop about 5%, to $1.36 per share on revenue of $8.37 billion. This gives the first look at how the industry did in the third quarter. Carnival (CCL) has beaten expectations for the last four straight quarters. Carnival (CCL) does not hedge fuel costs, likely the only cruise line that skips this, so high oil prices could weigh on results. The report offers a preview of the third quarter for other cruise lines. Royal Caribbean (RCL) rose sharply after several rating upgrades.
Also due tomorrow: the consumer confidence index, a sentiment reading that could move markets, given how strongly markets and yields reacted to last week's University of Michigan data. That reaction shows the gap between strong economic data and weak consumer mood. The JOLTS report also comes out. In weeks with many other labor market releases, JOLTS usually lags other jobs data by about a month, so it may not be the biggest market driver.
