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Morning Bid U.S.

What matters in U.S. and global markets today

By Anna Szymanski, Editor-in-Charge, Reuters Open Interest

Oracle’s skyrocketing share price lifted Asian equities on Thursday, as AI enthusiasm shows no signs of abating. Meanwhile, European markets remain in wait-and-see mode ahead of the European Central Bank’s rate decision later today. The focus will be less on what the ECB does – which is expected to be nothing – and more on what President Christine Lagarde says.

Investor attention will then turn once again to U.S. inflation data, with a consumer price update due following a soft producer price report yesterday. This is one of the last major data releases before the Federal Reserve’s meeting next week, and the question now is not whether the central bank will cut but by how much.

Mike is enjoying some well deserved time off, and will be back with the Morning Bid next week.

I’d love to hear from you, so please reach out to me at anna.szymanski@thomsonreuters.com.

Data refreshes every time you open this email. For more U.S. market news, click here. Please send any feedback to morningbid@thomsonreuters.com.

Today's Market Minute

Police and federal agents mounted an intense manhunt on Thursday for the sniper believed to have fired the single gunshot that killed conservative activist Charlie Kirk as he was fielding questions about gun violence during a university appearance.
Protesters across France obstructed highways, burned barricades and clashed sporadically with police on Wednesday in a show of anger against President Emmanuel Macron, the political elite and planned spending cuts.
Klarna (KLAR.N) shares jumped 30% in their hotly anticipated New York debut, valuing the Swedish fintech at $19.65 billion, ending the company's years-long wait for a listing and underscoring a rebound in the broader U.S. IPO market.
The global crude oil market is facing two long-term fundamental shifts that will change how cargoes flow around the world and how they are priced, writes ROI columnist Clyde Russell.
The dollar has been beaten down this year amid rising expectations for Fed easing, but ROI markets columnist Jamie McGeever argues that even if lower nominal rates are already reflected in the greenback's price, lower 'real' rates may not be.

Another day, another AI record

Oracle (ORCL.N) shares skyrocketed around 40% on Wednesday, its biggest one-day percentage jump since 1992, after the company announced four multi-billion-dollar contracts on Tuesday. Oracle co-founder Larry Ellison saw his fortune rise by about $100 billion to around $392.6 billion, according to Forbes. The cloud service firm’s surge boosted Asian tech stocks on Thursday, pushing indices in Japan, Taiwan and South Korea to fresh highs.

European shares edged up modestly early on Thursday, as investors await the ECB’s decision. with the STOXX 600 rising modestly as investors await the ECB’s decision. Most economists expect no change in policy, but ECB President Christine Lagarde’s remarks will be closely watched for signals about future easing amid the ongoing trade and geopolitical tensions. The ECB cut its key policy rate to 2% in the year through June but has been on hold ever since, arguing that the 20-country euro zone economy is in a "good place". Lagarde is likely to keep the door open for further rate cuts, especially since inflation is expected to temporarily dip below the ECB's 2% target next year, supporting market bets that a final "insurance" cut could come around the turn of the year.

The dollar steadied during Asian trading and gold continued to hover near record highs after an unexpected drop in U.S. producer prices on Wednesday reinforced bets for a Fed rate cut next week. The U.S. Producer Price Index fell 0.1% during August, the Labor Department's Bureau of Labor Statistics said on Wednesday. This followed a 0.7% jump in July, which was revised downwards. Traders are essentially certain there will be at least a 25 basis point cut at the Fed meeting next week, with a slim chance for a 50 bps move. U.S. CPI data due later today is expected to show a 0.3% monthly rise and 2.9% annual increase. While a weaker print could fuel bets for a larger cut, the report would have to be very hot indeed to shake up easing expectations.

Today's key chart

Graphics are produced by Reuters.

Oracle (ORCL.N) shares surged more than 40% to hit a record high on Wednesday, putting the company on track to join the trillion-dollar club. The company unveiled four multi-billion-dollar contracts on Tuesday, amid an industry-wide shift to spend aggressively to stay ahead in the AI race.

Today's events to watch

ECB interest rate decision (8:15 AM ET)
U.S. CPI for August (8:30 AM ET)
U.S. weekly jobless claims (8:30 AM ET)
U.S. 30-year Treasury bond auction (1:00 PM ET)