MARKET WRAPS

STOCKS: U.S. stocks declined following the latest setback for peace talks in the Middle East and a deepening of last week's selloff in U.S. Treasurys.

TREASURYS: U.S. bond yields reached fresh highs as oil prices remained volatile amid conflicting headlines about the state of negotiations between the U.S. and Iran.

FOREX: The dollar strengthened amid increasing likelihood that the Federal Reserve will continue to raise rates.

COMMODITIES: Front-month crude-oil futures settled off the day's highs, pressured by Saudi Arabia's reopening of the East-West pipeline.

HEADLINES

Saudi Arabia Resumes Red Sea Oil Exports in Blow to Iran

DUBAI-Saudi Arabia has resumed exporting oil via its East-West

pipeline after repairing damage caused by drone strikes, people familiar

with the matter said Monday, restoring a crucial route around the Strait

of Hormuz and dealing a blow to Iran.

Stretching 750 miles across Saudi Arabia to the Red Sea port of Yanbu

from the kingdom's oil-producing heartland on the Persian Gulf, the

East-West pipeline has become one of the world's most important pieces of

energy infrastructure during the Iran war, serving as a workaround for

sharply curtailed tanker traffic through Hormuz.

The East-West pipeline can carry up to 7 million barrels a day-about 2

million for domestic Saudi refiners and the rest for export-but had never

operated at full capacity for an extended period before the Iran war

began on Feb. 28. Roughly 4 million barrels a day-around 4% of global

supply-were flowing through it before drone strikes blamed on Iran-backed

forces in Iraq damaged the pipeline on Sept. 10, analysts estimate.

Nvidia Adds Record $150 Billion to Stock Buyback

Nvidia, flush with cash from the artificial-intelligence boom, is

launching the largest-ever U.S. stock buyback.

The chip giant on Monday said its board had approved a $150 billion

increase to the Santa Clara, Calif.-based company's share-repurchase

program, bringing the total buyback authorization to $235 billion.

The authorization eclipses the $110 billion stock buyback that Apple

unveiled in May 2024 and comes just four months after Nvidia's board

added $80 billion to the buyback program.

AMD to Acquire World Labs for $8.2 Billion

Advanced Micro Devices agreed to acquire artificial-intelligence

research firm World Labs for in an all-stock deal valued at about $8.2

billion.

AMD, a semiconductor company that recently touched a $1 trillion

valuation, said the deal would bring leading AI research and development

talent and help the company develop better AI hardware, software, and

systems, especially in the growing field of physical AI and robotics.

World Labs focuses on spatially-intelligent AI models that can

generate and simulate interactive 3-D environments. The company was

co-founded and is led by Fei-Fei Li, who is joining AMD as executive vice

president and chief scientist.

FAA to Delay 737 MAX 10 Approval Over New Software Glitch

The Federal Aviation Administration will delay certification of

Boeing's latest 737 MAX model as air-safety regulators assess a new

software glitch that some industry officials worry may pose a potential

safety risk while landing, the agency chief said Monday.

Boeing has been seeking to win the FAA's approval for the MAX 10, the

longest version of the 737 variant.

"We haven't concluded whether this is a safety of flight issue or

not," FAA Administrator Bryan Bedford said at a press conference Monday,

when asked about the software glitch. "But we will be delaying the 10

until we're satisfied that we don't have an issue here."

SpaceX Launches Starship for First Orbital Mission

SpaceX's Starship entered orbit for the first time and deployed the

latest version of its Starlink satellites, critical steps in the

company's push for the experimental rocket to handle a range of missions.

SpaceX launched Starship from a pad in Texas on Monday just before 9

a.m. Eastern time, according to the company's live feed. The Monday

flight marks the 14th test of Starship, the massive rocket that SpaceX

wants to move from a research-and-development phase to one where it

carries revenue-generating payloads.

The vehicle carried 26 satellites that SpaceX added to its current

constellation, which delivers internet service to customers around the

world.

Meta Seeks Payoff From AI Spending With New Push for Business Customers

Meta Platforms is starting a new business focused on selling

artificial-intelligence tools to enterprise customers, aiming to build on

the momentum of its viral Muse personal assistant and deliver a return on

its hefty spending.

The move will bring together sales of several of Meta's existing AI

tools including its Muse personal productivity agent, a coding tool,

access to its top models and agents for businesses, the company said.

Meta hired Chirantan "CJ" Desai, previously chief executive of document

database company MongoDB, to run the new business line, reporting to CEO

Mark Zuckerberg.

The Facebook and Instagram parent is in the throes of an evolution

from a consumer-oriented business with a core focus on selling ads to one

that also offers subscriptions and services to enterprise customers. It

is spending more than $100 billion on its AI infrastructure just this

year, and investors are eager to see that investment bear fruit.

TALKING POINT Treasury Takes Aim at Tax-Avoiding Investment Strategies

The Treasury Department issued its first formal warning shot against some increasingly popular tax-reducing investment strategies, cautioning against "potentially abusive" moves designed to minimize tax bills.

The government moved Monday to limit one strategy involving exchange-traded funds and flagged several others as questionable. The actions followed officials' comments earlier this year expressing concern about the proliferation of tax-motivated investing techniques.

"These transactions are not the result of conventional, long-established tax planning that is consistent with the intent of Congress," officials wrote in the notice posted Monday.

Strategies aimed at reducing capital-gains taxes, such as a form of tax-loss harvesting that involves leverage, have become particularly popular as stocks have soared over the past few years. Investors seek ways to defer taxable gains or trigger losses that can be used to offset gains.

The government took particular aim at maneuvers known as "351 conversion transactions," for the tax-code section they aim to employ. In those moves, taxpayers with appreciated gains engage in a series of transactions with newly launched exchange-traded funds that are designed to diversify their holdings without generating capital-gains taxes.

Since ETFs began doing 351 exchanges in 2021, more than 100 funds have launched this way, raising a combined $20 billion or more, according to Brent Sullivan, an independent tax analyst who blogs at TaxAlphaInsider.com and 351.tax.

Some of those moves would now be considered taxable events under the guidance posted Monday.

--Richard Rubin and Miriam Gottfried, The Wall Street Journal

Expected Major Events for Tuesday 00:30/JPN: Aug Detailed Import & Export Statistics

05:00/JPN: Jul Indexes of Business Conditions - Revision

06:45/FRA: Aug Housing starts

08:00/ITA: Jul Industrial turnover

08:30/UK: Aug Money and Credit - Lending to Individuals, Lending to Businesses, Broad Money and Credit

08:30/UK: Aug Monetary & Financial Statistics

08:30/UK: Aug Bank of England effective interest rates

08:59/JPN: Sep Monthly Economic Report

09:00/ITA: Aug PPI

12:30/CAN: Jul GDP

12:55/US: 09/26 Johnson Redbook Retail Sales Index

13:00/US: Jul U.S. Monthly House Price Index

13:00/US: Jul S&P Cotality Case-Shiller Indices

14:00/US: Sep Consumer Confidence Index

14:00/US: Aug Job Openings & Labor Turnover Survey

17:59/UK: REC JobsOutlook survey

19:00/US: Aug Agricultural Prices

20:30/US: API Weekly Statistical Bulletin

23:01/UK: Aug UK monthly automotive manufacturing figures

23:01/UK: Aug Zoopla House Price Index

23:50/JPN: Aug Preliminary Retail Sales

23:50/JPN: Aug Preliminary Industrial Production

All times in GMT. Powered by Onclusive and Dow Jones.

Expected Earnings for Tuesday AAR Corp (AIR) is expected to report $1.15 for 1Q.

CarMax Inc $(KMX)$ is expected to report $0.80 for 2Q.

Carnival Corp Ltd (CCL) is expected to report for 3Q.

Concentrix Corp (CNXC) is expected to report $0.78 for 3Q.