Wall Street Today | Oil Surges to $90 After Saudi Arabia and Russia Prolong Cuts

Federal Reserve Governor Christopher Waller said policymakers can afford to "proceed carefully" with interest-rate increases given recent data showing inflation continuing to ease.

"There is nothing that is saying we need to do anything imminent anytime soon," Waller said in an interview on CNBC Tuesday, signaling he supports holding rates steady at the central bank's next meeting. "We can just sit there and wait for the data."

Treasuries fell amid a flurry of investment-grade bond sales, the dollar hit the highest since March, and stocks pushed lower. Bloomberg reported a rally in Brent oil to $90 a barrel increased concern about a flare-up in inflation.

Ten-year US yields climbed to around 4.25%. At least 40 businesses are tapping high-grade debt markets worldwide Tuesday, looking to lock in borrowing costs ahead of key economic data and monetary policy decisions. The S&P 500 hovered near 4,500, an index of small caps slid 2%, and a gauge of homebuilders sank 5%.

Goldman Sachs Group Inc. now sees a 15% chance the US will slide into recession, down from 20% previously, as cooling inflation and a still-resilient labor market suggest the Fed may not need to raise interest rates any further.

To Chris Senyek at Wolfe Research, last week's "bad news is good news" trading action was a sign that the market continues to strongly believe in the "disinflation" and "soft landing" narratives that have driven up stocks over the past six months.

Brent oil rose above $90 a barrel for the first time since November as the largest OPEC+ producers extended their supply cuts to year-end.

In a move that risks a fresh inflationary impetus for the global economy, Saudi Arabia will continue its unilateral production cutback of 1 million barrels a day until December, according to a statement on the state-run press agency. The move will hold output at about 9 million barrels a day — the lowest level in several years — for six months in total.

Russia's Deputy Prime Minister Alexander Novak announced in a separate statement that his country's export reduction of 300,000 barrels a day will be extended for the same duration — the latest sign that Riyadh and Moscow are in lockstep on oil policy.

British chip designer Arm Ltd. is targeting a valuation of more than $52 billion from what is expected to be the largest initial public offering this year, according to the company's latest regulatory filing. Bloomberg reported that the offering hopes to raise $4.87 billion at the top of its range.

The parent company of CNN, HBO and other networks had hoped the strikes would be resolved by early September. Warner Bros. said Tuesday in a securities filing that it can’t predict when the strikes will end, and it now expects the financial fallout to affect the company through the end of the year.

Tesla shipped 84,159 units from its plant in Shanghai in August, according to local reports citing data from the Chinese Passenger Car Association. The figure was up from 64,285 in July and 76,695 in August 2022.