Pre-Market Pulse 6th September – Yields weigh on equity market and oil rallies on production cuts

Overnight – Yields weigh on equity market and oil rallies on production cuts

Equities were weighed down by rising Treasury yields, but a rally in energy stocks kept a lid on losses as oil prices climbed after major oil producers agreed to extend their oil production cuts.

Treasury yields climbed even as Fed officials signaled that the central bank could skip a rate hike at its Sept. 19-20 meeting later this month. In a sign that of support for a skip in September, Federal Reserve Governor Christopher Waller said in an interview with CNBC on Tuesday that there “is nothing that is saying we [the Fed]need to do anything imminent anytime soon.” The growing odds of a September pause come amid optimism of the U.S. avoiding a recession, or achieving a soft landing, following recent data showed that the pace of inflation remains steady and the economy continues remain resilient.

Energy stocks rose more than 1% as oil prices jumped after Saudi Arabia detailed plans to extend its production cuts until the end of 2023, while Russia said it would extend export cuts of 300,000 barrels for the day until the of the year. The production cuts — that have supported a recent revival in oil prices — delivered by OPEC and its allies have pushed the oil market to a deficit of 2.3 million barrels per day