SharespectiveWall Street, before morning tea

Daily newsletterFri 11 Sep 2026

Priced For A Hike Plus: copper's record rally came undone over a tariff that hasn't arrived.

Good morning, and welcome to Friday. American wholesale prices rose 5.4% in the year to August, the hottest reading of 2026, and more than a third of the monthly jump in goods prices came from one line item: diesel, up 24.1%. Stocks fell for a fourth straight session, the US 10-year Treasury yield pushed to 4.91%, and futures traders moved to roughly a 70% chance that the Federal Reserve raises rates next week.

Six months ago the argument was about how many cuts were coming. Now Brent is above US$105, Saudi Arabia has told OPEC its production fell to the lowest level since 1990, and the debate is whether the Fed hikes on Wednesday or waits a bit. Markets change their mind quickly, but rarely this thoroughly.

Market snapshot

US levels are Thursday 10 September's official 4​pm New York close. The NZX 50 and ASX 200 are Thursday's local closes, which happened before New York opened; currencies were taken late in Thursday's New York session.

Wholesale prices ran at 5.4% and a rate rise stopped being a hypothetical

The US producer price index rose 0.4% in August and 5.4% over the year, up from 4.8% in July and a tenth of a point above what economists expected. It is the highest annual reading of 2026. Goods did the damage: final demand goods rose 1.1% for the month, energy prices within that rose 4.2%, and diesel alone jumped 24.1%, accounting for more than a third of the entire goods increase.

What producer prices actually measure. The PPI tracks what American businesses receive for their output — factory gate and wholesale prices, before anything reaches a shop shelf. It tends to lead consumer inflation by a month or two, which is why a bad print a day before the consumer numbers gets attention. The detail worth noticing is that final demand services rose just 0.1%, and core PPI, stripping out food and energy, rose 0.3%. This is a fuel shock working its way through freight and manufacturing, not yet a broad one.

That distinction matters less to a central bank than it used to. Fed chair Kevin Warsh said at Jackson Hole in late August that inflation was still too high and rates might need to go up, and the Fed's preferred PCE measure is running at 3.7%. Futures had a September rise at a bit better than a coin flip earlier in the week; after Thursday's numbers they had it near 70%. The 10-year yield finished at 4.91%, the highest since 2023, and every basis point there feeds into American mortgage rates.

Copper's record rally came apart over a tariff that never arrived

Comex copper futures fell about 4.4% to US$6.59 a pound on Thursday, one day after setting a record US$6.89. The trigger was a Reuters report that the White House still has not decided whether to put tariffs on refined copper. Miners went with it: Freeport-McMoRan, the largest American copper producer, dropped 7.2% to US$70.78, Hudbay Minerals fell 7.7%, Teck Resources 6.8% and Rio Tinto 4.2%.

How the tariff got into the price. When the administration imposed copper duties last year it stopped short of refined metal, taxing semi-finished products such as pipes and wiring instead, and set out a staged plan for the rest — 15% on refined copper from 1 January 2027, rising to 30% in 2028. Traders took that as a commitment and bid up American copper accordingly, which is how a metal ends up at a record on the strength of a policy that has not happened yet. Thursday was the day that assumption got tested.

The hesitation comes back to the same problem showing up everywhere this week. Tariffs on refined copper would improve the economics of building American mines and smelters, but copper goes into electrical equipment, cars, air conditioning and construction, so the cost lands on manufacturers and eventually on households. An administration campaigning on the cost of living has to weigh one against the other, and with wholesale inflation at 5.4% the arithmetic has moved.

Cooper beat on profit and fell 14% because a sale didn't happen

CooperCompanies, which makes contact lenses and fertility equipment, dropped about 14% to US$55.12 on Thursday after reporting third-quarter results. Adjusted earnings came in at US$1.15 a share against the US$1.11 analysts expected. That was the good part. Revenue of US$1.07 billion missed the US$1.10 billion consensus, and fourth-quarter guidance of US$1.05 to US$1.09 a share landed well under the US$1.19 Wall Street had pencilled in.

The part that wasn't in the numbers. Cooper also ended a nine-month strategic review of CooperSurgical, its fertility and women's health arm, and the board concluded unanimously that shareholders were better off keeping it than selling at current terms. Investors had been assuming a sale, and an assumed sale sits inside the share price as a premium — money paid today for a deal expected tomorrow. When the deal is called off, that premium comes out in one go, which is why a company can beat on earnings and still have a very bad day. Cooper lifted its buyback authorisation to US$3 billion on the same announcement, and it made no difference.

The operating problem is more mundane. Cooper said contact lens distributors across the Americas are carrying less inventory, and that this will keep pressing on CooperVision revenue through the fourth quarter. Destocking is usually a timing issue rather than a demand one, but that is hard to prove while the guidance is going down.

Newsworthy numbers

Worth a read

Wrapping up

The European Central Bank raised its three key rates a quarter-point on Thursday, taking the deposit rate to 2.50% from 16 September, its second rise since the war in Iran began in late February, and warned of upside risks to inflation alongside downside risks to growth. American August consumer prices are out at 8.30​am Friday in New York — 12.30​am Saturday in Auckland, 10.30​pm Friday in Sydney — with consensus at 3.4%. The Fed then decides on 15–16 September, announcing at 2​pm Washington time on the Wednesday.

Oracle and Adobe both reported after Thursday's close, so the reaction lands in Friday's session: for Oracle, how fast its contracted cloud backlog is converting into revenue and what it is spending to get there; for Adobe, whether AI features are being paid for yet. Closer to home, New Zealand's June-quarter GDP arrives on Thursday 17 September, Australia's August labour force figures follow on 24 September, and the RBA decides on 29 September at 2.30​pm AEST.

The kiwi firmed slightly to US$0.5847, nudging USD/NZD down to 1.7103, while the Australian dollar slipped to US$0.7210 and left USD/AUD at 1.3870. Both are being pulled between higher US yields, which normally favour the greenback, and their own central banks now sounding more likely to tighten than to ease.

Back tomorrow, once the inflation print has landed.