A run-of-the-mill down day on Wall Street is accelerating in late-morning action.
An expansion in the Iran war has crude oil surging — with Brent crude up more than 7% and over $100 per barrel for the first time in two months. That’s ratcheting up inflation expectations, and, in turn, interest rates, with traders now baking in nearly a 40% chance of a Fed rate hike next week. Those odds were in the single digits a few days ago.
On top of that are rising AI spending concerns. Tesla and Google reported second-quarter results last night, with each company boosting expected AI-related capex spend far beyond what analysts had estimated.
Google, in fact, posted its first negative quarterly free cash flow since going public more than 20 years ago, and the company expects that to remain the case for the foreseeable future.
Tesla is lower by 14% and Google by 8% on Thursday, helping push the Nasdaq to a 2.65% loss. The S&P 500 is down 1.5%.
Bitcoin was trying to hold the $65,000 level, but recently lost it, now down about 2% over the past 24 hours at $64,700. Ether (ETH), XRP (XRP), and solana (SOL) are posting somewhat larger declines.
What’s working today? Let’s just say it’s good to be a weapons manufacturer or oil producer. Lockheed Martin is higher by 11% and RTX by 7.5%. Exxon and Chevron are each ahead just shy of 3%.
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