Tuesday's Final Takeaways: Robotaxi Race Gains Speed, Global Bond Selloff Accelerates

**Marley Kayden** (0:01)
Welcome back to Market Unclosed. I'm Marley Kayden here in Chicago alongside Sam Vadas at the New York Stock Exchange. Here's some final thoughts on the session. We saw bond yields surging to multi-month and in some cases multi-year highs today with the 10-year treasury yield climbing up towards 4.8%.
The 30-year yield above 5.3%.
Japan's 10-year government bond yield also hit 3%. That's the highest level since 1996, underscoring that this is a global bond market sell-off. The move comes as investors reassess the path forward for interest rates following Kevin Warsh's hawkish message at Jackson Hole, while we have renewed tensions between the US and Iran, adding to inflation concerns. Oil prices also moving higher. We've got Brent crude trading above $95 a barrel right now. That's its highest level since at least July. We've got WTI up to about $90 a barrel. It's up almost 6% today. The concern for investors is that a sustained rise in energy prices could slow the progress on inflation and then make it harder for the Central Bank to ease policy. Higher treasury yields also increase the discount rate applied to future corporate earnings, putting particular pressure on richly valued growth and technology stocks. At the same time, investors really watching the Strait of Hormuz closely because any disruption to those energy shipments could push crude prices even higher. For now, the combination of higher oil, higher yields and renewed geopolitical risk is creating a tougher backdrop for stocks as we kick off a historically turbulent month. Also, the Robotaxi race intensifying today with Waymo expanding into new markets while Amazon's backed Zucs is also ramping up its rollout. Waymo now operating in 14 different cities after adding San Diego, Denver and Tampa with more than 4,000 vehicles in its commercial fleet. Zucs is expanding its testing in Houston and San Diego and will have a presence in 12 US markets when those two cities open. This announcement particularly of interest because it comes just ahead of Tesla's CyberCab launch which is later this week. Sam, we'll cut your eye during the session.

**Sam Vadas** (1:58)
The data, Marley manufacturing continues to be a bright spot. The headline ISM easing slightly last month but still came in comfortably above that 50 mark which separates expansion from contraction. That survey showed new orders, production and jobs all growing. That's the good news although supply and deliveries are slowing and prices are increasing which continues to reinforce sticky inflationary pressures. One of the respondents in the business of chemicals suggested that economic pressure especially with tariffs and the war in Iran is making it harder for them to compete and could reduce consumer spending making it another difficult year for them. So I think that just encapsulates the sentiment there but dollar yen also watching that back at 160 that's raising the expectations of intervention now again given that that's the level that authorities have previously stepped in to the market to defend the currency. According to Japanese media reports Treasury Secretary Besant has been upping the pressure on Japan to hike rates. He also told CNBC has information the market doesn't and believes Japan and the BOJ will do things to strengthen the yen. The BOJ will meet September 17 and the markets are currently pricing in a hike. But heading into tomorrow Marley what are you going to be looking out for?

**Marley Kayden** (3:07)
We've got Broadcom. It has its earnings tomorrow after the close. Certainly has the power to move the broader market just based on its sheer size. Wall Street expecting EPS of $3.22 on revenue of $29.47 billion which would be slightly ahead of what management is guiding for and equating to roughly 90% growth year over year for both of those metrics. AI semiconductor revenue may matter even more though as investors want to see continued acceleration from the 143% growth that the company reported last quarter. How about you Sam, what will you be watching?

**Sam Vadas** (3:38)
Yeah, sticking with the data and the macro, nothing sort of topped here, but we will get ADP that's going to add to the labor market picture that we're getting this week. We had a lot of jolts today that eased but sort of stayed stable. Let's see if that's a similar thing there and mortgage apps as well. Obviously, we've been watching that housing data coming off. We know those high yields have been pressuring things, particularly with respect to those buyers coming off the sidelines. So we'll see what that tells us about the month of August and also July, Marley.

**Marley Kayden** (4:07)
Absolutely.
Wrapping a busy one here and preparing for another one tomorrow, but that's going to do it for us on Market On Close today. For Sam Vadas, I'm Marley Kayden. You can download our Schwab Network app in the Apple App Store for free and you can tune in 24-7 on schwabnetwork.com. We hope you have a great rest of your Tuesday.