Oil is back above $100 as the US and Iran battle for control of a route that carried about a fifth of the world’s oil and gas before the war.
That is the immediate market problem.
The longer problem is inflation.
Oil Above $100 Raises the Inflation Risk
Brent rose 2.1 per cent to just over $100 a barrel. It crossed $100 for the first time since July 24.
The Strait of Hormuz sits at the center of the conflict. About a fifth of the world’s oil and gas passed through it before the war.
The US military said it destroyed five Iranian oil tankers after the Islamic Revolutionary Guard Corps targeted an American warship with ballistic missiles twice this week.
Iran said it targeted two American vessels and eight oil tankers, causing heavy damage. The IRGC also said it targeted 10 ships trying to cross a prohibited and unsafe part of the Strait.
Houthi rebels fired dozens of ballistic missiles and drones at Saudi energy facilities. Saudi Arabia reported a temporary halt at some operations, but did not identify the sites or the extent of the damage.
The Houthis have threatened to close the Bab al-Mandeb Strait. That route became important for Saudi oil exports after Iran closed the Strait of Hormuz.
Oil reached $126 in late April. It fell to $70 after the US and Iran agreed to a memorandum of understanding.
The agreement quickly collapsed. Crude has risen steadily over the past six weeks during repeated US and Iranian strikes.
Traders and analysts have warned of another supply crunch as countries use strategic reserves.
More supply risk can push crude prices higher. Higher crude adds inflation pressure. More inflation pressure makes central-bank decisions harder.
Apple Puts a $1,999 Foldable at the Top
Apple unveiled the iPhone Duo, its first foldable smartphone. Reuters called it the biggest change in years to the company’s flagship product.
The Duo starts at $1,999 and will sit at the top of the iPhone lineup.
It is shaped like a passport and opens into a wide horizontal screen. It can also be viewed vertically. Apple said it is the company’s thinnest phone when open.
New CEO John Ternus introduced the Duo after unveiling the iPhone 18 Pro, AirPods 5 and Apple Watch Series 12. Former CEO Tim Cook attended.
Ternus called the iPhone the best device for AI.
Investors were already watching for higher starting iPhone prices because of a global computer parts shortage. Apple had raised Mac and iPad prices over the summer.
Bloomberg described the foldable as an attempt to energize growth in Apple’s biggest-selling lineup.
Can it create fresh growth at a $1,999 starting price?
Nvidia Now Carries About 8% of the S&P 500
Nvidia represents approximately 8% of the S&P 500’s market value, close to its highest share on record.
Its market value is $5.3 trillion. That is larger than five of the index’s 11 sectors. It also exceeds the combined value of the Energy, Utilities, Real Estate and Materials sectors.
A huge amount of index value now rests on one company.
Nvidia and TSM bounced off their trendlines, while Broadcom lagged.
AI Infrastructure Extends From Compute to Electricity
Palantir named Nebius its preferred sovereign AI infrastructure partner.
The companies plan to integrate Nebius compute and inference endpoints directly inside Palantir’s enterprise perimeter.
A separate portfolio snapshot said about 72% of Peter Thiel’s portfolio is in energy and power.
The stated opportunity covers power generation, transmission, grid equipment, natural gas, nuclear and utilities.
AI needs electricity. The US also needs a stronger and more secure grid for the next generation of demand.
Palantir and Nebius address compute and inference. The portfolio snapshot addresses the power needed to support that infrastructure.
A $6bn Buyback Disappoints Bond Investors
US government bond yields rose to their highest level in almost three years.
Treasury Secretary Scott Bessent’s expanded $6bn debt buyback program disappointed investors.
The Treasury said it would buy back $6bn of government debt in its first buyback operation since Bessent announced the expanded program in mid-August.
Bloomberg separately said the limits of Bessent’s public pressure campaign on traders were becoming clear.
Xiaomi’s Decline Creates a Setup Without Enough Numbers
Xiaomi operates across smartphones, artificial intelligence of things and electric vehicles.
Its stock is down 50%, according to the @value-investing blog.
That mix of businesses and the share-price decline prompted the author to examine the company as an investment. But the discussion provided no further operating or valuation figures needed to judge the business and valuation.
China’s Reported Popularity Gains
The @geopoliticaleconomyreport blog argued that historic changes are taking place in global politics.
It said recurring studies show China becoming more popular internationally than the United States. The blog pointed to a comprehensive Pew Research Center survey published this July.
That is the blog’s argument, based on the studies it cited.
SPACs Are Returning
The @wallstreetmillennial blog warned that SPACs are returning and are “even worse than last time.”
Its comparison starts with the explosion of companies going public through SPAC mergers in 2020 and 2021.