Iran conflict latest: Trump pauses Iran energy plant strikes by 10 days
Alphabet won an antitrust case to keep Google search, only insisting that they can’t enter exclusive search agreements and must share their data. The shares surged 8% to a new all-time high.
Apple shares jumped on the ruling, as it will continue to receive revenue-sharing agreements from Google searches, where Apple receives $20 billion annually. Part of the judge’s rationalization is that the advent of AI has introduced new competition in search.
The defeat of the antitrust lawsuit has lifted the megatech sector, as it has been seen as an ongoing risk due to their dominance, which is only going to get stronger as they build out their AI systems. The Magnificent 7 is up 2.6% today. This has left the market-weighted S&P firmly in the green, while the even-weighted S&P lingers in the red. The NASDAQ is pushing towards +1.2% while the Dow is down 200 points, and the Russell 2000 is flat.
Today, interest rates are lower across the yield curve, helped by a weaker JOLTS job opening number, continuing a 2-year downward trend, and comments from Fed governor Waller, who indicated that labor weakness justifies multiple cuts and that tariffs aren’t going to ignite an inflationary spiral. Both the 2-year and 10-year yields are down 5bps this morning.
Importantly, the 30-year is also down 5bps to 4.91%, after printing 5.00% overnight. This has become a focus maturity as the Japanese, British, and German 30-year bonds have all hit +10-year highs over concerns about surging debt levels.
The Japanese spike in yields is meaningful as investors there have been buying yield in other markets for decades and can now have a domestic alternative. The aversion to long maturities also speaks to higher longer-term inflation expectations.
On the commodity front, gold continues to set new highs, hitting $3,630/oz as money flows out of long-term government bonds looking for safe-haven assets. Silver is higher as well, while copper is flat. Crude oil is down 2.4%, back to $64/bbl as OPEC+ weighs another output hike. The US dollar index is back to 98.0 on lower interest rates. Crypto is higher with Bitcoin at $112.3K.
The US continues to be treated as a safe haven, both for stocks and bonds. The Google ruling takes some risk out of AI antitrust concerns. Bets for a series of Fed cuts have increased materially. Concerns about further legal challenges to the tariffs have brought concerns about disrupted global trade, but Trump is likely to find a strategy to keep them in place.
The trend remains positive, though September may remain volatile.