Crude Oil Drops on Demand Concerns; Equities Mixed Ahead of US CPI

Lead Crude oil prices are experiencing significant downward pressure, with WTI trading below $82 a barrel, down over 2% today. This decline is attributed to weakening demand prospects and a surge in US inventories. Equity futures are showing a mixed picture; Nasdaq futures are up slightly by 0.0762%, while S&P 500 futures are also in positive territory, up 0.1737%. The US 10-year yield has moved lower by 0.0427%, now at 4.68%. The dollar index is down 0.139%. Session narrative European markets are displaying a varied performance during the midday session. The FTSE 100 is notably underperforming, extending its decline for a fourth consecutive session, primarily due to weakness in commodity-related stocks. This comes despite stronger-than-expected UK GDP figures. Germany's Economy Ministry has issued a warning, flagging that insolvencies remain at an exceptionally high level and are expected to persist in the coming months. On the inflation front, Spain reported its core CPI year-on-year rose to 3.0%, an increase from the previous 2.9%. Sweden's CPI month-over-month printed at -0.3%, matching forecasts. In corporate news, Semtech announced a definitive agreement to sell its cellular module business to Compal Electronics for $62 million in cash. Additionally, ARX Accelarant is set to be taken private by Thoma Bravo at $20.25 per share. JD.com and Golar LNG have both announced their second-quarter and interim 2026 results. India's July merchandise trade shortfall hit $31.98 billion, exceeding a poll forecast of $30.2 billion, despite merchandise exports rising to $44.24 billion. Cross-asset check In commodities, WTI crude is down 2.1016% to $81.52, and Brent crude is down 1.933% to $87.26. Gold is down 0.5081% to $4444.8, and silver is down 0.9665% to $65.07. Copper is also lower by 0.5895%. In equities, the S&P 500 ETF is up 0.2583%, the Nasdaq 100 ETF is up 0.6307%, while the Dow ETF is down 0.0298%. The Russell 2000 ETF is up 0.6246%. Volatility, as measured by the VIX, is up 0.4124% to 14.61. In fixed income, the US 10-year yield is at 4.68%, down 0.0427%. The US Dollar Index is at 99.88, down 0.139%. EUR/USD is up 0.1215% to 1.1541, and GBP/USD is up 0.0445% to 1.3501. USD/JPY is down 0.0427% to 159.338. Themes & continuing stories A key theme is the ongoing weakness in commodity markets, particularly crude oil, driven by demand concerns and inventory data. European economic data continues to be a focus, with inflation figures from Spain and insolvency warnings from Germany providing a mixed picture. Geopolitical tensions, especially those concerning the Strait of Hormuz, remain a persistent factor influencing energy markets. Corporate M&A activity is also notable, with several deals announced today. What’s ahead Market participants will be closely watching for upcoming US CPI data, which is expected to provide further direction for monetary policy expectations. The consensus among economists points to a 25 basis point ECB hike in September, which will remain a key focus. Developments in the Middle East, particularly around shipping risks, will continue to influence oil prices.