Morning Bid: Labor days

Over the course of the last 24 hours, a semblance of tranquility has emerged in global markets. Oil prices have stabilized, and the bond market's frenzy has subsided. However, tensions between the United States and Iran remain unresolved, as President Trump has expressed a desire to limit the attacks' duration. In anticipation of the upcoming midterm elections, top aides are striving for a peaceful resolution to the conflict.

U.S. Treasury yields have decreased from their multi-year peaks, while European equivalents remain volatile due to a sharp rise in natural gas prices to three-year highs ahead of the winter season. In the realm of equities, Asian shares have been volatile on Thursday, whereas Wall Street futures were up before the opening bell, following a higher close on Wednesday for major U.S. indexes.

Japan's yen experienced a brief surge of approximately 1% in response to concerns of fresh intervention by the Bank of Japan to bolster the currency. However, traders' increased expectations of a BOJ rate hike this month, possibly exceeding the typical amount, seem to be the primary driver of the yen's rise. Attention is now shifting towards the U.S. labor market updates, as the ADP private sector payrolls for August fell short of forecasts, while the nationwide jobs report is scheduled for the following day.

Broadcom reported earnings on Wednesday, exceeding expectations, but its fourth-quarter outlook fell short, leading to a decline in the stock's value outside of trading hours. Despite this, Broadcom has forecasted robust sales of AI chips for the next two years, indicating sustained demand for AI infrastructure by Big Tech firms.

However, the company's shares dropped over 1% in extended trading due to a slightly disappointing outlook for the rest of the year. While Broadcom's shares have climbed by 6% this year, they have underperformed compared to rivals and the broader semiconductor index as concerns over AI spending and heightened competition, particularly from Marvell Technology, persist.

Additionally, the Federal Reserve's Christopher Waller is set to participate in a Reuters NEXT Newsmaker interview at 8:30 a.m. EDT, and the Cleveland Fed's Beth Hammack and Chicago Fed's Austan Goolsbee will also be speaking before the day concludes. Market participants should keep an eye on the U.S. weekly jobless claims, July trade balance, and the ISM August non-manufacturing PMI released at 8:30 a.m. EDT.