Daily Briefing | 2026-09-04: Oil prices surge again, Nvidia bets on opening up AI

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Today's main theme

What is most noteworthy in the past 24 hours is that global markets are simultaneously repricing "supply risk" and "control of key platforms". As the US-Iran conflict continued, Brent crude oil rose above $97 a barrel at one point, pushing inflationary and interest rate pressures back to the center of macroeconomic pricing. The Bank of England's chief economist publicly supporting an earlier interest rate hike also indicates that the central bank is increasingly concerned that supply shocks will translate into persistent inflation. On the other hand, Nvidia plans to acquire Hugging Face for $12.93 billion, further shifting the competition from GPUs to an open model ecosystem and developer portal; China, on the other hand, has increased its support for specialized, refined, and innovative SMEs, R&D, and financing through its new five-year plan. The common thread is clear: as energy, technology, and geopolitical environments become more unstable, capital is increasingly favoring entities that can control critical resources, platforms, and supply chains.

Five key news items

1. The US-Iran conflict pushed up oil prices, with Brent crude once breaking through $97.

On September 3, international oil prices continued to hover near a six-week high. Brent crude rose about 1.8% to $97.39 a barrel during trading, while WTI rose to $92.92, both rising for the fourth consecutive trading day, according to Reuters data. The direct reason for the price increase was the renewed strikes by the United States against Iranian targets, while Israel continued to send tough signals towards Tehran, causing the market to re-increase its risk premium for supply disruptions in the Middle East. More importantly, this rise occurred against the backdrop that global inflation has not yet fully returned to central bank targets. If crude oil remains above $90 for an extended period, it will be transmitted to broader prices through spending on transportation, chemicals, aviation, food, and residential energy, and will raise bond yields and corporate financing costs. For the stock market, energy stocks benefit, but overvalued growth stocks are more likely to be pressured by rising discount rates. The most crucial next steps are the actual passage of the Strait of Hormuz, whether the United States and Iran will continue to expand the scope of their strikes, and whether OPEC+ can stabilize supply by increasing production.Reuters

2. The Bank of England's Pill advocates for an earlier interest rate hike, as energy shocks begin to influence policy functions.

Bank of England Chief Economist Huw Pill said on September 3 that raising interest rates earlier would help prevent inflationary pressures from solidifying and could reduce the risk of being forced to take more aggressive tightening measures in the future. Pill had already supported raising interest rates at the July policy meeting, but at that time most members of the Monetary Policy Committee chose to wait for more evidence. Today, the Middle East conflict has pushed up energy prices, leaving Britain once again facing the typical supply shock dilemma: interest rate hikes cannot increase oil supply, but they can suppress the secondary spread of wage, service prices, and inflation expectations. The market's pricing for an immediate rate hike in September remains low, but expectations for action in November are significantly higher. For UK assets, short-term government bond yields and the pound may be supported if interest rate hike expectations continue to move forward, but real estate, consumer goods, and highly leveraged companies will face greater financing pressure. What truly determines the policy path is not just oil prices themselves, but whether energy costs begin to drive up core inflation, wage negotiations, and corporate pricing behavior in tandem.Reuters

3. Nvidia's $12.93 billion acquisition of Hugging Face extends the AI competition from chips to developer entry points.

On September 3, Nvidia announced that it had agreed to acquire Hugging Face, an open AI development platform, for $12.9303 billion. Hugging Face currently has over 18 million developers, 3 million models, 500,000 datasets, and 1 million applications, and is used by more than 200,000 companies to discover, evaluate, customize, and deploy AI. The importance of the deal goes beyond its scale; Nvidia is continuing to expand its influence from GPU hardware to model distribution, development tools, and community portals. Nvidia has pledged that Hugging Face will remain open, and developers will still be free to choose their models, frameworks, cloud services, and computing platforms, without being required to use Nvidia hardware. Even so, mastering one of the world's most important open model platforms could still give Nvidia a stronger advantage in developer reach and ecosystem data. In the competitive landscape, this will further force AMD, cloud vendors, and self-developed chip companies to increase their investment in the software ecosystem. It remains to be seen whether regulators will review platform neutrality and whether Hugging Face can continue to maintain true openness to a variety of hardware and models after the acquisition.NVIDIA

4. China released its 15th Five-Year Plan for SMEs, further institutionalizing support for innovation, financing, and digitalization.

Ten departments, including the Ministry of Industry and Information Technology of China, released the "15th Five-Year Plan for Promoting the Development of Small and Medium-sized Enterprises," which further shifts the policies for SMEs from 2026 to 2030 from short-term support to long-term industrial capacity building. The plan proposes that by 2030, the per capita operating income of small and medium-sized enterprises above designated size will increase by about 15%, the internal R&D expenditure of small and medium-sized industrial enterprises above designated size will increase by more than 8% annually, the number of specialized, refined and innovative "little giant" enterprises will reach 22,000, and the number of national-level characteristic industrial clusters of small and medium-sized enterprises will reach 600. At the same time, the policy will strengthen government funding support for startups and early-stage enterprises, broaden bank credit and capital market financing channels, and promote digital and green transformation. Small and medium-sized enterprises (SMEs) play a significant role in China's employment, innovation, and manufacturing supply chains. Therefore, this set of policies is not only a tool to stabilize employment, but also an industrial policy to enhance technological independence and supply chain resilience. The market should next focus on how the second phase of the National Small and Medium-sized Enterprise Development Fund, incremental bank financing, and capital market support will be implemented, and whether resources will truly flow to high-R&D-intensity enterprises rather than forming inefficient subsidies.Ministry of Industry and Information Technology

5. Russian drone strikes Coca-Cola factory near Kyiv, war continues to spread to commercial infrastructure.

Ukrainian President Volodymyr Zelenskyy said on September 3 that Russian drones attacked a Coca-Cola factory in Brovary, near Kyiv. On-site facilities were damaged, but company employees were not injured. This attack used Iranian-designed Shahed series drones, continuing Russia's recent tactic of continuously depleting Ukraine's air defense and urban infrastructure with low-cost unmanned systems. The economic size of a single factory is not enough to change the course of the war, but its importance lies in the fact that the risk of war continues to spread from military targets, energy and logistics facilities to the commercial assets of multinational corporations in Ukraine. For businesses, this means increased risks of war insurance, supply chain redundancy, inventory management, and asset impairment. For European governments, this has also increased pressure to continue expanding air defense and drone interception capacity. The market should continue to observe whether attacks are more concentrated on foreign companies, logistics nodes, and industrial facilities, and whether Western companies will reassess the risk premium of investing and reconstructing projects in Ukraine as a result.Reuters

Market Correlation and Today's Observation

Putting together today's news items, the most obvious change is that "safety costs" continue to enter asset prices. Rising oil prices first pushed up inflation expectations and long-term yields, forcing central banks such as the UK to reconsider earlier tightening policies; If this logic spreads to the United States and Europe, the discount rate for overvalued assets will continue to rise, while the energy, defense, and cash-flow-stable sectors will have a relative advantage. The direction of the US dollar is more complex: risk aversion is usually beneficial to the dollar, but if the US itself faces stronger inflationary pressures due to oil prices, bond volatility will increase, and funds may simultaneously flow to other safe-haven assets such as gold and the Japanese yen.

The allocation of capital within the technology sector is also changing. Nvidia's acquisition of Hugging Face means that the AI competition is no longer just about "who has the faster chip," but about "who can control the developers, model distribution, and software ecosystem." This will enhance the strategic value of platform assets and increase regulatory attention to monopolies and ecosystem neutrality. China's five-year plan for small and medium-sized enterprises reflects another approach: to distribute industrial resilience more to a large number of specialized enterprises through financing, research and development, and digital support. If these policies can increase private enterprise investment and productivity, the medium-term support for RMB assets will be more sustainable than simply expanding infrastructure. The three most noteworthy variables to watch today are whether Brent crude can stabilize above $95, whether UK and US interest rate expectations will continue to be revised upwards, and whether regulators will begin to focus on the competitive neutrality of open AI platforms after Nvidia's acquisition.

Cover image:Dr Jorge Reyna / Pexels