Global exports of refined fuels such as diesel and gasoline were about 25% lower in late July and August than a year earlier, according to Deloitte's weekly global economic update, which estimates that roughly 75% of the decline came from the Middle East or Russia. Iranian strikes destroyed refining capacity in the Middle East, Ukrainian drones have hit Russian plants, and product tankers cannot pass the Strait of Hormuz while the conflict continues. Saudi Arabia is repairing an attacked pipeline, a job expected to take weeks. West Texas Intermediate traded near $107 a barrel, the 30-year Treasury yield reached 5.17% and the S&P 500 slipped 0.3%.
IMTS 2026, the largest manufacturing technology show in the Western Hemisphere, opened Monday at McCormick Place in Chicago with 1,788 exhibiting companies, including 400 first-time exhibitors. The show covers 1.17 million square feet and runs through September 19, with attendance on pace to top 90,000 visitors from all 50 U.S. states and 113 countries. Organizers estimate a $250 million economic impact for Chicago and Illinois. Exhibitors are focused on robotic machining, cobots and AI-driven production, betting that automation will close a gap: surveys show fewer than 40 percent of U.S. job shops use any automation at all.
The Federal Reserve raised its benchmark interest rate on Wednesday, its first increase in more than three years, and signaled that another move is likely before the end of 2026. Officials pointed to inflation that has stayed elevated for 65 months, pushed higher by oil prices after the closure of the Strait of Hormuz. Chairman Kevin Warsh has argued the central bank must show it can return inflation to target. Treasury yields had already climbed toward 5 percent before the decision. The hike lifts costs on credit cards, auto loans and variable-rate debt, and raises financing costs for companies funding data centers and factories.
The 10-year US Treasury yield rose above 5% on Monday for the first time in nearly three years, as energy prices tied to Middle East supply disruptions kept inflation pressure high. The Federal Reserve meets on September 15-16, and traders now price roughly an 80% to 90% chance of a rate increase, up sharply from a week earlier. Goldman Sachs chief economist David Mericle wrote that pricing is high enough that the committee will likely want to avoid the market reaction that would follow from holding steady. Asian shares and US stocks fell as investors weighed higher oil, higher yields and slower AI spending.
Saudi oil buyers and traders say the kingdom will run out of crude stocks available for export if its East-West pipeline to the Red Sea is not restarted within days. The line has been shut since attacks last week, and Iran denies involvement. Brent crude crossed $107 a barrel on Monday, near a four-month high, while US diesel has hit a record $6 a gallon. The White House is weighing emergency powers to expand refining capacity, and August inflation data has hardened expectations of a Fed rate rise.
JPMorgan Chase has ended its lending relationship with Situational Awareness, the AI-focused hedge fund run by former OpenAI researcher Leopold Aschenbrenner, after large losses on concentrated bets tied to AI infrastructure. The fund had to sell most of its public equities to Ken Griffin's Citadel during a broad selloff in global chip stocks. It managed as much as $45 billion at its peak. Goldman Sachs, Citigroup and Bank of America remain brokers. The episode shows how quickly leverage can turn an AI conviction into a forced sale.
US consumer prices rose 3.4% in the 12 months to August and 0.4% from July, the Bureau of Labor Statistics reported, matching forecasts but keeping inflation well above the Federal Reserve's 2% target. Core prices, which exclude food and energy, rose 2.4% on the year. After the report, traders using CME FedWatch put the odds of a quarter-point hike at the September 16 meeting near 90%, up from about 70%. EY-Parthenon switched its call from a hold to a 25 basis point hike that would lift the funds rate to 3.75%-4%. It would be the first increase since 2023.
Oil prices moved above $100 a barrel as fighting in the Middle East widened, with Bloomberg reporting crude topping $109 at one point. Global bond yields jumped to multi-year highs and stocks in the United States and Europe slumped on Thursday as investors priced in a longer conflict and faster inflation. The dollar also gained as money moved toward safer assets. Companies continued to spend on AI capacity: Microsoft plans to build data-center capacity to about 38 gigawatts by 2032, more than triple its current footprint. Electric vehicle demand rose for a sixth straight month in August, led by Europe, according to Benchmark Mineral Intelligence.
China is putting 360 billion yuan, about $53.6 billion, into eight state-owned banks and insurance companies to strengthen its financial system as growth slows. The injection is led by the finance ministry and was announced by state news agency Xinhua. The Global Times said the capital will give institutions more resources to channel into credit for the real economy and strengthen their ability to withstand external shocks. The money gives the eight groups more room to absorb losses and keep lending, as banks face narrowing margins and rising bad loans tied to property and local government debt. Analysts say the funds may ease short-term pressure but will not on their own revive credit demand.
Global oil prices topped $100 a barrel this week for the first time since July, after U.S. forces destroyed five Iranian tankers carrying crude oil. U.S. Central Command said the strikes were a response to two attempts to hit a U.S. Navy warship with ballistic missiles in as many days. Iran has vowed retaliation, and the White House has threatened a stronger response. Crude is up more than 12% over the past month as the standoff around the Strait of Hormuz, a waterway that carries about one-fifth of the world's oil, keeps traders on edge. Analysts say shipping insurance costs are climbing, and higher energy prices now complicate the inflation picture for central banks as consumers face rising fuel costs.