The daily business briefing: September 6, 2023

1. Oil prices rise after Saudi Arabia, Russia extend production cuts

Saudi Arabia and Russia announced Tuesday they had agreed to extend voluntary oil production cuts through the end of the year to boost prices. The news sent the price of benchmark Brent crude rising above $90 per barrel for the first time since November, although prices slipped early Wednesday. The deal will reduce the global supply by 1.3 million barrels per day, with Russia alone cutting 300,000 barrels. The decision could drive up prices at the gas pump and increase inflation, The Associated Press reported. It also could hurt Saudi Arabia's relationship with the U.S. President Biden warned in 2022 Riyadh would face "consequences" if it teamed up with Moscow on cuts after Russia's invasion of Ukraine disrupted energy markets.

The Associated Press

2. Report: Huawei and Chinese chipmaker developed advanced smartphone processor

Chinese tech giant Huawei Technologies and Semiconductor Manufacturing International Corp, the country's top chipmaker, have built an advanced 7-nanometer processor and put it into Huawei's latest smartphone, Bloomberg News reported, citing a report by Tech Insights, which tore apart one of the devices for a look inside. Huawei's Mate 60 Pro runs on a new Kirin 9000s chip manufactured by SMIC. It wasn't immediately clear how many of the chips the companies can produce, and how expensive they are to make. But the development suggested that China, which Washington is preventing from buying the most advanced U.S. chips, is making progress toward developing its own next-generation microchips, Bloomberg reported.

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Bloomberg

3. Regulators take step toward massive air bag inflator recall

The National Highway Traffic Safety Administration said Tuesday it had made an initial determination that a Tennessee company's air bag inflators could explode, injuring or killing people with shrapnel. The decision marked a key step toward making the company, ARC Automotive, recall 52 million inflators made by the manufacturer and another company under license. The agency scheduled an Oct. 5 hearing, the next step to asking a court to order the defiant company to recall the allegedly defective products. In May, the agency said the inflators were involved in at least seven injuries and two deaths in the U.S. and Canada since 2009. At least 25 million cars in the United States are believed to contain the inflators.

The Associated Press The Hill

4. Stock futures slip after Tuesday's decline

U.S. stock futures fell further early Wednesday after Tuesday's losses. Futures tied to the Dow Jones Industrial Average and the S&P 500 were down 0.2% at 7 a.m. ET. Nasdaq futures were down 0.3%. The Dow and the S&P 500 fell 0.6% and 0.4%, respectively, on Tuesday, while the tech-heavy Nasdaq edged down 0.1%. A jump in oil prices after Russia and Saudi Arabia agreed to extend production cuts contributed to the downward pressure, as did rising Treasury yields. Both raised concerns about potential further Federal Reserve interest rate hikes to fight inflation. "Rising oil prices really feeds into the story about inflation," Bill Merz, head of capital market research at U.S. Bank Wealth Management, told CNBC.

CNBC

5. Report: Musk borrowed $1 billion from SpaceX when he bought Twitter

Elon Musk borrowed $1 billion from his rocket company, SpaceX, in 2022, around the time of his $44 billion purchase of Twitter, the social media company he has renamed X, The Wall Street Journal reported Tuesday. The "unusual loan" was part of Musk's tapping of his multiple companies to buy Twitter without having to sell shares, according to the Journal. The loan was backed by some of Musk's SpaceX stock. The company's board approved the arrangement in October and Musk withdrew the money that month, then returned it to SpaceX with interest the following month. Musk also has occasionally borrowed from banks against shares of electric car maker Tesla, where he serves as CEO, the Journal reported.

The Wall Street Journal