Wednesday, September 2

Renewed US–Iran hostilities drove the day’s most consequential cross-asset move: WTI jumped 5.2% to $90.22 and Brent 4.6% to $94.65, while the US 10-year yield reached roughly 4.81%. The shock extended across sovereign markets, pushing Japan’s 10-year yield to about 3.0% and UK gilts to 5.25%, before a modest easing in US yields helped equities recover on Wednesday. The S&P 500 rose 0.46%, the Nasdaq 0.45% and the Russell 2000 1.13%, but the rebound did not erase the prior session’s losses or the inflation concern embedded in the bond market.

The macro data reinforced a less comfortable growth mix. August ADP payroll growth slowed to 38,000, missing the 47,000 expectation, while ISM manufacturing remained expansionary at 54.6% but new orders cooled sharply. The Bank of Canada held its policy rate at 2.25%, underscoring a preference for stability as energy prices and activity send conflicting signals. Gold gained 0.86%, while Bitcoin barely moved, highlighting that rates and crude—not crypto—were carrying the risk repricing.

The clearest technology-market takeaway was the widening cash-flow transfer from hyperscalers to chipmakers. Amazon, Alphabet, Meta, Microsoft and Oracle are directing enormous sums toward data centers, chips and power infrastructure, while Nvidia, Micron, Broadcom and Applied Materials capture a growing share of free cash flow. Bank of America Global Research describes the shift as generational: chipmakers’ cash generation is rising as cloud platforms’ free cash flow moves toward, or in some cases below, zero under the weight of the build-out.

That spending cycle remains strategically important even as AI-exposed equities were pressured during Tuesday’s yield-driven selloff. Meta’s planned “Iris” chip, manufactured through Broadcom and TSMC, and its targeted expansion from 7 gigawatts of AI capacity in 2026 to 14 gigawatts in 2027 illustrate the scale of demand being created. The implication is a sharper distinction within technology: platform companies face financing and depreciation burdens, while scarce compute and semiconductor capacity retain stronger structural support.