The Prime Daily: 11 September 2026

U.S. stock indexes fell on Thursday as the Dow Jones, S&P 500, and Nasdaq Composite all recorded losses. Equity markets faced downward pressure following wholesale inflation data that showed producer prices rising 5.4% from a year earlier. Investors are increasingly concerned that the Federal Reserve will implement an interest rate hike at its upcoming policy meeting.

Energy prices spiked significantly as Brent crude surged above $108 per barrel. This surge reflects growing geopolitical anxieties and supply disruption fears regarding the Strait of Hormuz due to the prolonged conflict between the United States and Iran. The steep rise in energy costs has intensified overall market worries about persistent inflationary pressures.

The bond market selloff accelerated, pushing the 10-year U.S. Treasury yield up to 4.95%, markable as its highest level since late 2023. Financial markets are adjusting to a stronger probability of monetary tightening, with federal funds futures indicating a greater than 70% chance of a rate hike next week. A strong 30-year bond auction provided only minor afternoon relief to long-term yields as short-term rates continued to scale higher.

Producer prices in the US increased 0.4% mom in August 2026, following an upwardly revised 0.1% rise in July and in line with expectations. It is the biggest increase in three months. Excluding food and energy, producer prices increased 0.2% on the month and 4.6% on the year, compared to 0.3% and 4.3% respectively in the previous month.

The European Central Bank raised its key rate by 25 basis points to 2.5% at its September meeting, in line with expectations and marking its second hike since the US-Iran war began. The ECB said the conflict continues to fuel inflationary pressures, with inflation likely to stay well above its 2% target for an extended period, aided also by resilient activity in the broader economy. The ECB held its 2026 inflation forecast at 3.0% and raised its 2027 projection to 2.5%.

The Bank of Japan is expected to hike rates to 1.25% following a highly anticipated meeting, on Friday next week.

Asian markets opened on a negative note following losses in US equities due to surging bond yields and Brent prices.

The rupee extended its decline against the US dollar for the third consecutive session, depreciating 33 paise to close at 95.44. The domestic currency remained under pressure amid elevated crude oil prices, persistent foreign equity outflows, and sustained dollar demand from importers.

The Nifty continues to remain in a short-term downtrend. A sustained bout of weakness could drag Nifty towards 23,172, which coincides with the 61.8% retracement of the rise from the April 2026 low of 22,182 to the August 2026 high of 24,774. On the upside, 23,600 is likely to act as key resistance zones in the near term.

Markets head into the Federal Reserve’s meeting next week anticipating more than a 70% chance of a rate hike. Recent economic data, including last week’s strong jobs numbers and comments from Fed officials, moved the needle in favor of a more hawkish policy outlook.

All eyes on today’s US CPI and Core CPI data which we expect at 3.4% and 2.4% YoY respectively.