CNBC Daily Open: Rising oil prices reignite inflation fears

This information is sourced from today's CNBC Daily Open, our latest global markets newsletter. The CNBC Daily Open keeps investors informed about everything essential, regardless of their location. If you like what you see, feel free to subscribe.

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Today's essential information

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Markets facing stress

Stocks in the U.S. declined.

Tuesday was burdened by increased oil prices and

increasing Treasury yields

Across Europe

The Stoxx 600 ended with a 0.2% decrease.

Mixed economic data has been reported for the region. Producer prices in the Euro zone saw a decrease of 7.6% in July compared to the previous year. However, business activity experienced its sharpest decline in almost three years in August, as per the HCOB/S&P Global Purchasing Managers' Index.

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Everyone is focused on Arm.

Designer of chips

Arm will offer 95.5 million shares for listing.

According to an estimate, each piece is priced between $47 and $51.

revised submission

for its debut on the New York Stock Exchange, potentially valuing the company at $52 billion. This places it in the league of tech behemoths such as Alphabet, Apple, Nvidia, and semiconductor firms like Intel, Samsung, and TSMC.

Interested in purchasing Arm stocks

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Oil reductions to continue until December

Saudi Arabia is prolonging its reduction in oil production.

According to the state-owned, 1 million barrels per day will continue until the year's end.

Press Agency of Saudi Arabia

Russia has also committed to decreasing its oil exports by 300,000 barrels daily until December 2023.

Futures for Brent and West Texas Intermediate increased.

to their highest levels since November by a dollar.

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'An excellent week of data'

We gained knowledge last week.

Inflation is becoming less severe.

as anticipated, and the

The job market is becoming less tight.

Governor of the Federal Reserve

Christopher Waller spoke to CNBC.

The recent week presented an impressive amount of data regarding inflation, which enables the Federal Reserve to remain patient, observe the data, and see if the trend persists. This suggests that the Federal Reserve may likely maintain the current rates in its forthcoming September meeting.

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Goldman reduces recession probabilities once more

Goldman Sachs has reduced its prediction of the U.S. falling into a recession from 20% to 15%, due to positive indications from the latest economic data. Consequently, the investment bank believes that the chance of the Fed raising rates in September is now unlikely.

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What else is the bank commenting on regarding the U.S. economy and the direction of interest rates.

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The final result

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As a Governor of the Federal Reserve,

Christopher Waller confirmed to Steve Liesman from CNBC.

He highlighted that while recent inflation data has been promising, it's crucial to observe if prices maintain a downward trend in the long term.

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"Waller stated, "We received two positive reports consecutively." The crucial aspect now is to "determine if this low inflation is a consistent pattern or merely an anomaly or a stroke of luck."

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The oil production cuts by Saudi Arabia and Russia pose a risk to the recent months of low inflation, potentially making them an anomaly. Following the announcement, West Texas Intermediate (WTI) contracts for October surged to $86.75 per barrel, while Brent contracts for November reached $90.05 a barrel. These are the highest levels for both in the past 10 months.

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"Higher oil prices significantly contribute to the narrative on inflation," stated Bill Merz, the head of capital market research at U.S. Bank Wealth Management. "This narrative on inflation, in turn, influences bond yields and the narrative about the Federal Reserve's potential actions."

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U.S. Treasury yields rose following the news, as increased inflationary pressures indicate potentially higher or consistently high interest rates for an extended period. The 10-year and 2-year Treasury yields surged approximately 9 basis points, closing at 4.266% and 4.96% respectively.

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Increased Treasury yields and escalating oil prices negatively impacted stocks, with the exception of those within the energy sector.

Halliburton Company

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Petroleum from Occidental

, contributing an increase of over 2%). Even

Goldman's

The prediction that a U.S. recession is increasingly improbable this year failed to boost investors' mood.

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The first trading day of a holiday-shortened week concluded with major indexes falling. The S&P 500 experienced a loss of 0.42%.

Industrial Average of Dow Jones

experienced a decrease of 0.56%.

Composite of Nasdaq

Additionally, there was a 0.08% decrease.

2000 Russell

The small-cap stocks index experienced a 2.1% decline, marking its poorest performance since April 25.

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September, living up to its reputation, already appears to be a challenging month for stocks. However, as Waller noted, this is based on a single data point, which could be an anomaly or a stroke of luck.