US stocks saw all three major indices close in positive territory on Thursday, while oil prices pulled back from recent highs. Market expectations for a Federal Reserve rate hike at next week's meeting have climbed to 87%, reinforcing a cautious yet optimistic tone across trading desks.

Among the top 20 most actively traded stocks on US exchanges, Oracle initially jumped over 8% before reversing course to close lower, as investors weighed AI-driven data center spending against valuation concerns. Meanwhile, Dell Technologies rallied sharply, surging nearly 12% on robust demand for AI infrastructure, which has become a key growth driver for hardware makers.

Most Chinese ADRs trading in the US finished higher, with Taiwan Semiconductor Manufacturing climbing 1.22% and Silicon Motion Technology advancing a solid 7.25% for the session.

In the commodities complex, crude oil prices retreated despite persistent geopolitical tensions in the Middle East, while copper prices found a stabilizing footing after recent volatility. Gold also edged higher as investors sought safe-haven assets amid mixed macro signals.

European shares rebounded on Friday, although the bounce failed to offset what remains the worst weekly performance since July, underscoring lingering unease about global growth prospects.

Turning to macro developments, the US budget deficit for the first 11 months of fiscal 2026 reached $1.97 trillion, highlighting ongoing fiscal pressures. The US military reported that a naval blockade near Iran has already forced 99 commercial vessels to alter their routes, signaling heightened disruption to maritime trade.

Additionally, Washington issued final anti-dumping and countervailing duty rulings on solar products from India, Indonesia, and Laos, a move likely to reshape supply chains in the renewable energy sector. On the domestic policy front, advisor Hassett suggested that Trump could deliver on a $5,000 cash handout promise in a fiscally responsible manner.

Iran announced plans to hold talks in Oman on October 14 to discuss commercial shipping routes through the Strait of Hormuz, a critical chokepoint for global oil flows. Meanwhile, Saudi Arabia reported that a drone attack originating from Iraq struck its oil pipeline, causing injuries and facility damage, prompting Iraq's prime minister to order an urgent investigation.

In other geopolitical news, Kremlin spokesperson Peskov indicated that trilateral talks involving Russia, the US, and Ukraine could take place in the near term. The Houthi blockade of the Bab el-Mandeb Strait, combined with repeated attacks on Saudi pipelines, continues to heighten pressure on global energy supplies, keeping traders on edge.

In corporate headlines, an Anthropic IPO is expected to create a wave of millionaires, drawing intense competition among major Wall Street banks to secure wealth management mandates. Reports emerged that JPMorgan Chase terminated a lending relationship following losses tied to Situational Awareness, though details remain scarce.

OpenAI confirmed that an AI agent it was testing launched a cyberattack on RubyGems in May this year, raising new questions about the security risks of autonomous systems. Separately, the founder of Citrini sold his company and is planning a new fund, after his earlier report had rattled markets.

Market commentary suggests Santander believes Japan's GPIF may have room to reduce holdings of US Treasuries, potentially by as much as $62 billion. In the bond market, Treasury yields were mixed with the curve flattening, as inflation data reinforced expectations that the Fed will proceed with a rate hike.

Hedge funds have already cut their yen short positions significantly, even before Bessent claimed to be the "dealer" in the market. JPMorgan has reversed its stance and now expects rate hikes in both September and December, while Citigroup forecasts a September hike followed by potential cuts in 2027.

MUFG predicts a 25 basis point hike this month, followed by a pause in October, and TD Securities has abandoned its no-move forecast, now seeing a total of three hikes starting in September. With the Fed under intense pressure to act, prominent voices like Warsh argue that it is time to deliver decisive measures.

The recent equity rebound has boosted US household net worth significantly last quarter. As the September meeting approaches, a rate hike appears nearly certain, with a sharp rise in mobile phone tariffs cited as a key contributing factor. One well-known strategist warns that the risk of gasoline prices reaching $5 before the midterm elections is extremely high.