Overnight Recap

Previous Session Context

Orientation from Tuesday's cash session and its wrap, for the open:

• Tuesday's session closed lower as U.S.-Iran turmoil kept oil elevated — "stocks fell while bond yields stayed elevated" wrap, published 18:07 ET (Bloomberg Markets).
• Gold extended its decline into Tuesday evening on inflation-driven higher real yields — "gold extends decline as inflation risks pull yields higher," published 19:40 ET (Bloomberg).
• U.S. diesel reached its highest since April (a level set during the initial phase of the war) as the conflict strains global supply — published 05:03 ET (Bloomberg).

Global Equity Movers

• US futures (pre-market): ES1 -0.24% to 7,625.00, NQ1 -0.51% to 28,977.75, RTY1 -0.25% to 2,917.50 (06:35 ET). Dell (DELL) up pre-market on the AI-server quarter and analyst price-target hikes (Morgan Stanley/Goldman/Citi); Palo Alto Networks (PANW) muted-to-lower despite the beat, consolidating after its run (MarketWatch, 05:03 ET). Sector proxies: XLK -0.58%, XLE +0.29% — energy resilient while tech leads lower (snapshot).
• Japan: Nikkei slumped ~2.9% (near 64,250) and Topix ~-2.4%, snapping a nine-session rally, as rising JGB yields and BOJ-hike bets compounded global risk aversion; SoftBank Group fell over 6%, Tokyo Electron ~-2.8%, Advantest ~-4% (InvestingLive, 03:42 ET).
• Korea: Kospi dropped more than 3%, with the scale of foreign selling pointing to investors treating the escalation as a regime shift, not a headline (InvestingLive, 02:54 ET; Guardian, 04:54 ET).
• China/HK: CSI 300 lost ~1.4%; Beijing kept Iranian President Pezeshkian at arm's length at the SCO summit ahead of a high-stakes Trump meeting (Guardian, 04:54 ET; CNBC, 03:26 ET).
• Australia/New Zealand: AUD up on the Q2 GDP beat (above 0.7150) with RBA-hike pricing firming; RBNZ's back-to-back hike pressures the NZD outlook but AUD/NZD cross leans AUD (InvestingLive, 22:30 ET; Bloomberg, 22:05 ET).
• Europe/London: gilts to multi-year highs (10y just under 5.3%) lead the reopening; European gas at a three-year high is the energy driver (Guardian, 04:54 ET; FT, 05:54 ET).

Rates, FX, and Commodities

• Rates: U.S. 10-year 4.80% — highest since November 2023 (+~4bp on the day); 30-year 5.27%; the curve steepens as the long end reprices on fiscal-risk and energy-inflation concern. JGB 10-year ~3.0% (highest since 1996), 2-year ~1.8%; UK 10-year gilts just under 5.3% (highest since mid-2008). The read across markets is a fiscal/energy-risk signal rather than a growth signal — analysts explicitly warn this yield rise is not the kind that accompanies economic strength (CNBC, 04:39 ET; InvestingLive, 05:29 ET; Guardian, 04:54 ET).
• FX: USD/JPY corrected lower off near-five-week highs (~160 area) but remains bid with BOJ-hike pricing the swing factor; AUD/USD above 0.7150 on the strong GDP print; EUR soft with option markets pricing heavy downside protection — the longest rush since 2017. USD/CNY reference mid set at 6.7829, weaker than the ~6.724 estimate (InvestingLive, 05:29 ET; Bloomberg, 05:17 ET; InvestingLive, 21:15 ET).
• Oil: WTI ~$90.38/bbl (CL1 +0.18% vs prior settle, o/n -0.64% as it backed off an intraday print above $90), Brent hovering near $95; renewed U.S.-Iran strikes and the Hormuz tanker incidents underpin the war premium. U.S. diesel at its highest since April; middle-distillate cracks at records on the Russian export ban plus refinery strikes (futures anchor, 06:36 ET; Bloomberg, 05:03 ET; OilPrice, 05:45 ET).
• Gold: -0.9% to ~$4,356 as higher real yields and a firmer dollar bite; silver erased earlier Treasury-led gains as hawkish Fed pricing (Warsh) retightened conditions (futures anchor, 06:36 ET; InvestingLive, 04:49 ET).
• Natgas: +1.4% to ~2.95; European gas at a three-year high on supply/energy-transition strains (futures anchor; FT, 05:54 ET).

Today's Setup and Risk Map

Calendar (session events):

• US: ADP employment report — consensus ~47K vs 44K prior; analysts flag it is unlikely to move markets unless it is a large downside surprise, given the Fed is focused solely on inflation (InvestingLive, 02:37 ET).
• Canada: Bank of Canada rate decision — widely expected to hold at 2.25%; markets now price only ~60% of a hike by year-end and 93bp of tightening by end-2027, with focus on any dovish language around the collapsed US-Canada trade talks (InvestingLive, 02:37 ET).
• Earnings before the bell (BMO): no big-cap reporters; 7 smaller-cap names (earnings_calendar.json).
• Earnings after the close (AMC): AVGO, SNOW, HPE, NTAP — a heavy AI-infrastructure/software docket that sets up tomorrow's tape (earnings_calendar.json).

Key levels into the open: ES1 7,625 (-0.24%), NQ1 28,978 (-0.51%), RTY1 2,918 (-0.25%); WTI ~$90.38 with Brent near $95; U.S. 10-year 4.80%; gold ~$4,356; USD/JPY ~160 with BOJ-hike sensitivity (futures anchor, 06:35 ET).

Scenarios:

• Bull: Gulf escalation stays contained (tanker hits isolated, no Kharg/full-closure), oil's premium partially unwinds, and dip-buyers use the deep NQ discount after Tuesday's flush — Dell/energy strength providing a leadership pocket.
• Base: Tape opens lower and rangebound; energy and the dollar outperform while long-duration tech stays under pressure; ADP and the BoC statement dictate whether the yield-fear loop pauses; tonight's AVGO/SNOW/HPE/NTAP prints set the tone into Thursday.
• Bear: A further Hormuz flow interruption (Kpler crossings already at 4 vs a 13 average) or another strike pushes Brent through $95-100, yields follow, and September-hike odds harden further — a coordinated rates-and-oil squeeze on growth multiples.

Biggest risk to the base case: Hormuz. The market is pricing an escalation-contained strike; the tanker-crossing collapse and the record distillate cracks are the numbers that turn this from a headline into a regime shift, and each oil print feeds directly into both the Fed's and the RBNZ/BOJ hiking calculus today.

Earnings Calendar and Results

Earnings Calendar (deterministic — sourced from DoltHub + DuckDB warehouse):
Already reported (pre-open, BMO):
- …plus 7 smaller-cap reporters (<$20B market cap) — micro-caps collapsed for readability.
Upcoming today (after close, AMC):
- AVGO (After market close, $1768B) — EPS cons 19.10 (YoY +62.7%)
- SNOW (After market close, $114B) — EPS cons 2.62 (YoY +33.0%)
- HPE (After market close, $69B) — EPS cons 4.09 (YoY +18.9%)
- NTAP (After market close, $37B) — EPS cons 9.93 (YoY +9.7%)
- …plus 32 smaller-cap reporters (<$20B market cap) — micro-caps collapsed for readability.
Tomorrow (2026-09-03):
- CIEN (Before market open, $54B) — EPS cons 9.63 (YoY +47.5%)
- CPRT (time unconfirmed, $31B) — EPS cons 1.66 (YoY +5.1%)
- ZS (After market close, $29B) — EPS cons 4.51 (YoY +8.9%)
- IOT (After market close, $24B) — EPS cons 0.93 (YoY +25.7%)
- …plus 59 smaller-cap reporters (<$20B market cap) — micro-caps collapsed for readability.
Source: DoltHub earnings_calendar (local clone) + DuckDB warehouse market_cap. 43 reporters today, 4 ≥$20B.