By Stephen Culp

NEW YORK (Reuters) – Wall Street was sharply higher and the greenback jumped on Thursday as robust economic data failed to budge expectations that the Federal Reserve will leave its key interest rate unchanged next week.

A broad rally lifted all three major stock indexes sharply higher, with the continued upward trajectory of oil prices, helping energy stocks outperform the broader market.

A spate of economic data released before the opening bell showed energy prices, specifically gasoline, were largely responsible for a hotter-than-expected producer prices print and a consensus-beating retail sales reading.

“There’s a reason why the Fed focuses on core inflation,” said Tim Ghriskey, senior portfolio strategist Ingalls & Snyder in New York. “Food and energy prices are volatile and seasonal, so (the PPI report) won’t change their actions in the coming period.”

“Core PPI continued to slow on a year-to-year basis and retail sales were stronger,” Ghriskey added. “This is not a weak economy.”

The European Central Bank (ECB) hiked its key interest rate to a record high, but also hinted that this latest increase would be its last.

“Once one central bank decides they’re going to pause, everyone gets on board,” said Michael Green, chief strategist at Simplify Asset Management in Philadelphia. “There’s a general sense that the rate hiking cycle is done for now.”

Financial markets have baked in a 97% likelihood of the Fed holding the fed funds target rate steady at 5.25%-5.50% at the conclusion of next week’s monetary policy meeting, and a growing 63.6% chance of holding firm at the November meeting to follow, according to CME’s FedWatch tool.

The Dow Jones Industrial Average rose 357.95 points, or 1.04%, to 34,933.48, the S&P 500 gained 36.83 points, or 0.82%, to 4,504.27 and the Nasdaq Composite added 107.14 points, or 0.78%, to 13,920.73.

European stocks jumped to their biggest one-day percentage gain in six months, after the ECB – hiking interest rates for the tenth straight time – suggested it was at the end of its monetary policy tightening cycle.

The pan-European STOXX 600 index rose 1.52% and MSCI’s gauge of stocks across the globe gained 0.81%.

Emerging market stocks rose 0.71%. MSCI’s broadest index of Asia-Pacific shares outside Japan closed 0.66% higher, while Japan’s Nikkei rose 1.41%.

The dollar hit a six-month high against a basket of world currencies in the wake of the stronger-than-expected U.S. economic data, and following on euro weakness following the ECB rate decision.

The dollar index rose 0.6%, with the euro down 0.86% to $1.0636.

The Japanese yen was flat versus the greenback at 147.49 per dollar, while sterling was last trading at $1.2402, down 0.69% on the day.

U.S. Treasury yields were range-bound but were last higher, as investors digested the PPI and retail sales reports.

Benchmark 10-year notes last fell 10/32 in price to yield 4.2863%, from 4.248% late on Wednesday.

The 30-year bond last fell 25/32 in price to yield 4.385%, from 4.337% late on Wednesday.

Oil prices surged, with Brent touching its highest level this year as a tighter supply outlook offset demand concerns.

U.S. crude jumped 1.85% to settle at $90.16 per barrel, while Brent settled at $93.70 per barrel, up 1.98% on the day.

Gold prices rebounded after an initial dip in opposition to the strengthening greenback, and was last slightly higher.

Spot gold added 0.1% to $1,908.90 an ounce.

(Reporting by Stephen Culp; Additional reporting by Marc Jones in London; Editing by William Maclean and Chizu Nomiyama)

By Arathy Somasekhar

HOUSTON (Reuters) -Oil prices climbed on Thursday to their highest this year, as expectations of tighter supply outweighed worries about weaker economic growth and rising U.S. crude inventories.

Brent crude rose $1.82, or 1.98%, to settle at $93.70, after touching $93.89, its highest since November 2022.

U.S. West Texas Intermediate crude (WTI) gained $1.64, or 1.85%, to $90.16, closing above $90 for the first time since November.

On Wednesday, the International Energy Agency said Saudi Arabia and Russia’s extended oil output cuts will result in a market deficit through the fourth quarter. Prices briefly pulled back on a bearish U.S. inventories report before resuming their climb.

“That this genuinely bearish stock report only led to a brief temptation to sell speaks volumes and underlines the market mentality,” said Tamas Varga of oil broker PVM.

Both benchmarks remained in technically overbought territory.

Hedge funds have been buying crude oil futures for the past two or three weeks as “fundamentals continue to get stronger, driven mostly by heavy demand for both gasoline and diesel,” said Dennis Kissler, senior vice president of trading at BOK Financial.

A day before the IEA report, the Organization of the Petroleum Exporting Countries (OPEC) issued updated forecasts of solid demand and also pointed to a 2023 supply deficit if production cuts are maintained.

“The market is getting increasingly nervous about the sufficiency of supply,” said John Kilduff, partner at Again Capital.

“Russia and Saudi are acting in a way that could materially constrain supplies as we get into the peak northern hemisphere demand season, for the winter period,” Kilduff added.

The European Central Bank raised its key interest rate to a record peak but signalled this was likely its final move to tame inflation.

Investors see a 97% likelihood the U.S. Federal Reserve will hold interest rates steady in its next meeting on Sept. 20, according to the CME FedWatch Tool.

Meanwhile, China’s central bank said it would cut the amount of cash that banks must hold as reserves for the second time this year to boost liquidity and support the country’s economic recovery.

China is the world’s second-largest oil consumer and its economic recovery has remained choppy, worrying markets about demand.

(Reporting by Arathy Somasekhar in Houston, Alex Lawler in LondonAdditional reporting by Robert Harvey and Natalie Grover in London and Jeslyn Lerh in SingaporeEditing by Jane Merriman, David Gregorio and David Evans)

By Saqib Iqbal Ahmed

NEW YORK (Reuters) – An exchange-traded fund (ETF) that started trading on Thursday offers investors a new way to participate in the hot market for short-dated equity options, a risky trading strategy that has enthralled markets over the last year.

Miami-based ETF sponsor Defiance ETFs LLC launched the Defiance Nasdaq-100 Enhanced Option Income ETF on Thursday, the first ETF to use daily options income generation, the ETF sponsor said in a press release.

The ETF seeks to tap into the dual popularity of short-dated options contracts and the heightened interest in ETFs that seek to generate income through a combination of selling options and investing in U.S. large cap stocks.

Short-dated options contracts, with a day or less to expiry – dubbed 0DTE (zero days to expiry) options – have grown popular with investors over the past year, often making up as much as half the daily trading volume in the options on major ETFs and indexes, including the S&P 500 and the Invesco QQQ ETF.

Their increased usage has sparked concerns about their risks and the potential for a volatility shock that could ripple out to the broader stock market.

Investors have also flocked to ETFs that look to generate income and reduce portfolio volatility by selling options against stocks.

One such ETF – the JPMorgan Equity Premium Income ETF – has grown its assets to about $29.5 billion from about $12.4 billion a year ago. Assets at another, the Global X Nasdaq 100 Covered Call ETF, have grown to $8.1 billion from $6.9 billion a year ago. “If there is one thing that investors are eager to receive, it is a steady stream of income, and we hope to provide just that,” said Defiance ETFs’ Chief Executive Officer Sylvia Jablonski.

The new actively managed ETF, QQQY seeks monthly yield for investors by combining Treasuries and short-dated Nasdaq-100 index options. The fund will seek to generate income by selling 0DTE put options looking to capture the premium in these highly volatile derivatives contracts, the ETF sponsor said. “QQQY is attempting to timely scratch two itches, potential income from an asset that doesn’t typically generate income and exposure to the sudden popularity of trading ODTE options,” said Lois Gregson, senior ETF analyst at FactSet Research Systems. Gregson, however, warned the ETF’s reliance on the highly volatile 0DTE options could leave it vulnerable to losses.

“The fund is ‘betting’ the market will rise more often than fall,” Gregson said, noting that the portfolio manager would have to buy back the short put options potentially at a loss.

“The strategy is similar to picking up dimes in front of a bulldozer. The income potential is there, but there are times you could also get run over,” Gregson said.

Defiance ETFs is set to launch two other ETFs – the Defiance S&P 500 Enhanced Options Income ETF and Defiance R2000 Enhanced Options Income ETF, which will employ a similar strategy with exposure to the S&P 500 and the Russell 2000 Indexes, respectively. The success of the new ETF may hinge on continued growth of interest in short-dated options, said Seth Golden, president of investment research firm Finom Group. Golden said he will be watching liquidity and trading volume for the new product to gauge its viability. The ETF’s shares were trading about flat at $20.13 at 12:45 p.m. (1645 GMT) with about 7,000 shares changing hands.

(Reporting by Saqib Iqbal Ahmed; Editing by Richard Chang, Ira Iosebashvili and Daniel Wallis)

By Noel Randewich and Ankika Biswas

(Reuters) – Wall Street’s main indexes rose on Thursday as hotter-than-expected economic data eased worries about a recession without changing expectations of a pause in rate hikes next week, while Arm Holdings soared in its stock market debut.

SoftBank’s Arm was valued at nearly $60 billion in a strong Nasdaq debut, with the chip designer’s shares last up nearly 16%.

Retail sales rose more than expected in August on higher gasoline prices, while initial claims for state unemployment benefits climbed to a seasonally adjusted 220,000 for the week ended Sept. 9 from 217,000 the week before.

Monthly producer prices for final demand rose 0.7% last month, against expectations of a 0.4% increase. On an annual basis, they increased 1.6% compared with estimates of a 1.2% rise.

“Today’s economic data confirms the path toward a soft landing, but without being so hot that the Fed thinks they might need to do a couple more rate hikes,” said Ross Mayfield, Investment Strategy Analyst at Baird. “All together, it’s pretty bullish.”

Chip designer Arm’s American Depositary Shares opened at $56.1 apiece compared with the initial public offering price of $51, in a sign of confidence for other companies planning to list their shares.

Chipmakers including Nvidia, Micron Technology and Broadcom added between 0.2% and 1.6%.

“The game is back on. Capital markets are open for business,” said Thomas Hayes, chairman at Great Hill Capital LLC. “You’re going to see so many IPOs in the next 12 weeks your head is going to spin.”

Traders see a 97% chance of the Federal Reserve holding rates in its Sept. 20 policy meeting and a near 67% likelihood of a pause in November, according to the CME FedWatch Tool.

Citigroup expects the Fed to hike interest rates by 25 basis points in November, compared with its previous forecast of a September hike.

The S&P 500 was up 0.80% at 4,503.03 points.

The Nasdaq gained 0.80% to 13,923.64 points, while the Dow Jones Industrial Average was up 0.95% at 34,902.56 points.

The small-cap Russell 2000 index jumped 1.3% and was poised for its best day since the end of August.

Of the 11 S&P 500 sector indexes, 11 rose, led by real estate, up 1.55%, followed by a 1.32% gain in Utilities.

HP fell 2.6% after Warren Buffett’s Berkshire Hathaway sold about 5.5 million shares of the company.

Visa slipped 2.7% after the payment processing giant said it was engaging with Class B shareholders on a proposal to convert their shares to Class C or Class A.

Advancing issues outnumbered falling ones within the S&P 500 by a 7.0-to-one ratio.

The S&P 500 posted 12 new highs and 5 new lows; the Nasdaq recorded 30 new highs and 143 new lows.

(Reporting by Ankika Biswas, Shristi Achar A and Medha Singh in Bengaluru, and by Noel Randewich in Oakland, Calif.; Editing by Saumyadeb Chakrabarty and Vinay Dwivedi)

By Pratyush Thakur

(Reuters) – Aerospace giant RTX Corp on Monday told airlines hundreds of their Airbus jets would be grounded at any one time in coming years to check for a rare manufacturing flaw, souring the mood in an industry that was only just experiencing some relief from supply chain pressures.

It is the latest manufacturing defect to hit planemaking this year, after separate quality issues with another big supplier Spirit AeroSystems.

WHAT IS THE QUALITY ISSUE SURROUNDING RTX ENGINES?

RTX unit Pratt and Whitney’s popular Geared Turbofan (GTF) engines were designed for better fuel efficiency and fewer emissions.

The engines have become popular and now compete with the LEAP engines produced by CFM International to power the Airbus A320neo.

But concerns over its performance have swirled in recent months after engines faced problem with durability in hot and dusty climates, requiring more frequent maintenance.

In July, RTX disclosed it had found microscopic containments in powdered metal, used to manufacture high-pressure turbine discs that are part of engine’s core, and presence of which could lead to cracks in the engine.

RTX said at that time that 200 engines would require “accelerated inspection” with 60 days to fix each engine with a contamination issue. However, on Monday RTX widened the scope of inspections, to pull around 600 to 700 engines off their Airbus jets and projected repair work to last up to 300 days per engine.

HOW DID THE PROBLEM ARISE?

In 2015 RTX, then called Raytheon, expanded capacity at its subsidiary HMI, where the company makes the powdered metal, to support additional capacity required for GTF ramp-up.

During the ramp up, a contaminant was mistakenly introduced into the powder, which inspection during that time failed to detect.

ARE THERE QUALITY ISSUES AT OTHER AEROSPACE SUPPLIERS?

Yes. Boeing last month identified a 737 MAX quality problem involving supplier Spirit AeroSystems that resulted in improperly drilled holes on the aft pressure bulkhead, a structure that seals off the rear of the pressurized cabin.

Earlier this year, Boeing paused deliveries of some 737 MAXs as it grappled with a supplier quality problem involving two fittings that join the aft fuselage made by Spirit to the vertical tail, which were not attached correctly.

WHY ARE THESE PROBLEMS SURFACING NOW?

Original equipment manufacturers (OEM) in the highly complex aerospace industry are dealing with skyrocketing demand and transitioning to high-rate production.

The ramp-up has stressed supply chains and is being impeded by labor shortages.

Aerospace companies have flagged high labor attrition stemming from COVID, and the presence of more inexperienced, less skilled workers have compounded the quality issues.

The grounding of the 737 MAX after two fatal crashes has also introduced a new era of intense regulatory scrutiny.

WHAT IS NEXT?

RTX has said the inspection process would require the grounding of nearly 350 aircraft per year through 2026.

Due to the already constrained supply chain, RBC analyst Ken Herbert expects GTF repairs to drag on longer than expected. Carriers that had taken deliveries of affected jets are reducing some flights and have trimmed their carrying capacities.

Although RTX has said the engines in its current production are unaffected, some aerospace analysts see Pratt and Whitney ceding market share to CFM, a joint venture between GE and France’s Safran.

(Reporting by Pratyush Thakur in Bengaluru; Editing by Maju Samuel)

By Alex Lawler

LONDON (Reuters) -Oil rebounded on Thursday, with Brent crude topping $93 a barrel for the first time this year, as expectations of a tighter supply outlook for the rest of 2023 overshadowed concerns over weaker economic growth and rising U.S. inventories.

Saudi Arabia and Russia’s extension of oil output cuts will result in a market deficit through the fourth quarter, the International Energy Agency said on Wednesday before a bearish U.S. inventories report prompted a slight pullback in prices.

“That this genuinely bearish stock report only led to a brief temptation to sell speaks volumes and underlines the market mentality,” said Tamas Varga of oil broker PVM.

The tightening oil balance will remain the dominant price driver for the rest of 2023, he added.

Brent crude was up $1.20, or 1.3%, at $93.08 by 1100 GMT after touching $93.11 for its highest since November 2022. U.S. West Texas Intermediate crude (WTI) gained $1.14, or 1.3%, to $89.66, having also hit a 10-month high.

Both benchmarks had slipped on Wednesday after a U.S. supply report showing rising crude and refined product stocks.

Priyanka Sachdeva, senior market analyst at Phillip Nova, said supply fears are underpinning oil prices as producers “adamantly stick to restricted production”.

A day before the IEA report, the Organization of the Petroleum Exporting Countries (OPEC) issued updated forecasts of solid demand and also pointed to a 2023 supply deficit if production cuts are maintained.

“The oil market looks decidedly tight over the next two to three quarters as supply constraints persist amid robust demand,” ANZ Research analysts said.

In focus later on Thursday will be the latest interest rate decision from the European Central Bank.

Analyst and investor expectations had been leaning towards a pause in rate increases until Reuters reported on Tuesday that the ECB was set to raise its inflation forecast for next year to more than 3%, bolstering the argument for higher interest rates.

(Reporting by Alex Lawler in LondonAdditional reporting by Jeslyn Lerh in SingaporeEditing by David Goodman)

Essential AI Raises $40M as AI Investment Frenzy Persists

Essential AI is the latest startup to attract strong interest amid the artificial intelligence boom. The startup raised $40 million in new funding in a deal that underscores the frenzy around AI invention and innovation. The new funding round comes just months after the startup raised $8 million in a funding round led by Thrive Capital.

Essential AI LLM Push

A brainchild of Ashish Vaswani and Niki Parmar, the startup works on large language model (LLM) software. LLM is the technology that powers the popular chatbots led by ChatGPT that generate new content by ingesting immense amounts of information. The fact that the startup is raising close to $40 million while still in stealth mode without raising any products underscores strong confidence about its technology and prospects.

The $40 million raised came after Vaswani and Parmar left Adept AI, a company they helped co-found with former Google director David Luan. Adept is one of the companies focused on training neural networks to perform general tasks for enterprise clients. The startup has already risen close to $415 million. The two join a number of high-profile researchers who have left Google to start startups and attracted millions in investments.

AI Investment Frenzy

While the venture capital market has slowed in recent months, AI startups have contended to draw lots of investments as investors eye the opportunity in a segment in the initial stages of growth. In June, three startups raised more than $1.5 billion, underscoring the strong interest in AI startups. AI startup Inflection AI spearheaded the funding round, raising $1.3 billion.

The $1.3 billion investment in Inflection AI was led by Microsoft, Reid Hoffman, Bill Gates, and Nvidia in a deal that valued the startup at $4 billion. The startup has already raised more than $1.5 billion. The startup is building what it says will be the biggest AI cluster in the world. Like Essential AI, it also works on large language models that will allow people to interact with AI-powered assistants.

New York-based Runaway is another AI startup that has raised $141 million, and an extension to $50 million Series C funding from Google, Nvidia, and Salesforce rose late last year. The startup is the brain behind AI image generator Stable Diffusion, having also unveiled its video-to-video generative AI app.

Cohere, an AI startup that competes with open AI, has also raised $270 million this year from investors led by Nvidia, Oracle, and Salesforce. The startup is focusing on developing AI models for enterprise customers. The company seeks to be a neutral provider for enterprises that use models not tied to cloud providers. It is also led by former top AI startups that left Google to plot their way in the industry.

Microsoft Impact

Microsoft investing close to $10 billion in OpenAI, the parent company behind ChatGPT, triggered the investment frenzy around artificial intelligence startups. With ChatGPT sending shockwaves and showing signs of revolutionizing various sectors, it underscored the pivotal role AI is poised to play, therefore attracting massive investments.

The investment drive underscores how startups with exposure to artificial intelligence have become a bright spot in an otherwise subdued market of venture capital funding. Most of the startups continue to receive funding from big tech companies that seek exposure to game-changing innovations.

By Alex Lawler

LONDON (Reuters) – Oil rebounded on Thursday as expectations of a tighter global crude supply outlook for the rest of 2023 overshadowed concerns over weaker economic growth and rising U.S. inventories.

Saudi Arabia and Russia’s extension of oil output cuts will result in a market deficit through the fourth quarter, the International Energy Agency said on Wednesday before a bearish U.S. inventories report prompted a slight pullback in prices.

“That this genuinely bearish stock report only led to a brief temptation to sell speaks volumes and underlines the market mentality,” said Tamas Varga of oil broker PVM.

The tightening oil balance will remain the dominant price driver for the rest of 2023, he added.

Brent crude rose 83 cents, or 0.9%, to $92.71 a barrel by 0810 GMT. U.S. West Texas Intermediate crude (WTI) was up 70 cents, or 0.8%, at $89.22.

Both benchmarks touched 10-month highs on Wednesday before release of the U.S. supply report showing rising crude and refined product stocks sent prices lower.

Priyanka Sachdeva, senior market analyst at Phillip Nova, said supply fears are underpinning oil prices as producers “adamantly stick to restricted production”.

A day before the IEA report, the Organization of the Petroleum Exporting Countries (OPEC) issued updated forecasts of solid demand and also pointed to a 2023 supply deficit if production cuts are maintained.

“The oil market looks decidedly tight over the next two to three quarters as supply constraints persist amid robust demand,” ANZ Research analysts said.

In focus later on Thursday will be the latest interest rate decision from the European Central Bank.

Analyst and investor expectations had been leaning towards a pause in rate increases until Reuters reported on Tuesday that the ECB was set to raise its inflation forecast for next year to more than 3%, bolstering the argument for higher interest rates.

(Reporting by Alex Lawler in London; Additional reporting by Jeslyn Lerh in Singapore; Editing by David Goodman)

By Echo Wang and Anirban Sen

NEW YORK (Reuters) – Chip designer Arm Holdings Plc secured a $54.5 billion valuation in its U.S. initial public offering (IPO) on Wednesday, seven years after its owner SoftBank Group Corp took the company private for $32 billion.

The IPO represents a climb-down from the $64 billion valuation at which SoftBank last month acquired the 25% stake it did not already own in the company from the $100 billion Vision Fund it manages.

Yet even with this lower valuation, SoftBank fares better than its $40 billion deal to sell Arm to Nvidia Corp, which it abandoned last year amid opposition from antitrust regulators.

Arm priced its IPO at $51 per share, at the top of its indicated range, raising $4.87 billion for SoftBank based on 95.5 million shares sold, the company said on Wednesday. Reuters first reported on Arm’s decision on the pricing.

Arm’s shares are scheduled to start trading in New York on Thursday.

Arm has already signed up many of its major clients as cornerstone investors in its IPO, including Apple, Nvidia, Alphabet, Advanced Micro Devices, Intel and Samsung Electronics.

Reuters was first to report on Tuesday that Arm received enough backing from investors to secure at least the top end of the price range between $47 and $51 per share in its initial public offering (IPO), including the possibility of the share sale being priced above range.

Arm launched its IPO marketing efforts last week, seeking to convince investors it has growth ahead of it, beyond the mobile phone market, which it dominates with a 99% share.

Weak mobile demand during a global economic slowdown has caused Arm’s revenue to stagnate. Overall sales totaled $2.68 billion in the 12 months to the end of March, compared to $2.7 billion in the prior period.

Arm told potential investors in New York last Thursday that the cloud computing market, of which it has only a 10% share and therefore more room to expand, is expected to grow at an annual rate of 17% through 2025, partly thanks to advances in artificial intelligence. The automotive market, of which it commands 41%, is forecast to expand by 16%, compared with just 6% growth expected for the mobile market.

Arm also told investors its royalty fees, which account for most of its revenue, were accumulating since it started collecting them in the early 1990s. Royalty revenue came in at $1.68 billion at the latest fiscal year, up from $1.56 billion a year before.

An area of scrutiny for investors has been Arm’s exposure to China, given geopolitical tensions with the United States that have led to a race to secure chip supplies. Sales in China contributed 24.5% of Arm’s $2.68 billion revenue in fiscal 2023.

(Reporting by Echo Wang and Anirban Sen in New York; Editing by Sandra Maler, Greg Roumeliotis and Richard Chang)

By Stephen Nellis

CUPERTINO, California (Reuters) -Apple launched a new series of iPhones that included a new titanium shell, a faster chip and improved video game playing abilities.

The biggest surprise with the iPhone 15 that will come out Sept. 22: It did not raise prices, reflecting the global smartphone slump.

The event at Apple’s Cupertino, California, headquarters comes amid lingering economic uncertainty, especially in China, Apple’s third-largest market where it faces challenges from expanded restrictions on using its iPhones in government offices and the first new flagship phone in several years from Huawei Technologies.

Huawei raised its second-half shipment target for the new Mate 60 series smartphone, which has satellite capability, by 20%, the country’s official Securities Times reported on Tuesday shortly before the Apple event.

Apple did not deliver any blockbuster surprises, and shares closed down 1.7% after event.

APPLE EMBEDDING MACHINE LEARNING

While Apple avoids the terms artificial intelligence, or AI, the technology was the driver of several new features.

An Apple executive said the company used machine learning to detect a person in the frame, allowing users to turn a picture into a portrait immediately or later in the Photos app.

Apple also showed off new watches, including a Series 9 Watch with a feature called “double tap” where users tap thumb and finger together twice, without touching the watch, in order to perform tasks like answering a phone call.

It uses machine learning to detect tiny changes in blood flow when the user taps their fingers together, freeing up the other hand for other tasks like walking a dog or holding a cup of coffee, said Apple Chief Operating Officer Jeff Williams.

IPHONE 15 LAUNCH

Both the Pro and other iPhone 15 models will have a brighter display and a 48-megapixel camera as well as 100% recycled cobalt in their batteries.

Apple said the iPhone 15’s satellite connectivity can now be used to summon roadside assistance. It is rolling out the feature out with the American Automobile Association (AAA) in the United States.

Apple said that USB-C charging cables are coming to both its iPhone 15 and the charging case of its AirPods Pro devices. The move reflects requirements from European regulators to use USB-C and allows the use of the same charging cables already used for iPads and Macs.

“I was expecting Apple to try and spin the all USB-C decision in certain way but they didn’t they were very matter of fact in the way they talked about it,” said Carolina Milanesi, an analyst with Creative Strategies. She said the shift “brought some differentiation to the iPhone Pro, because there’s faster throughput for data transfer. That is going to be valuable for people” who use the device for professional photography, Milanesi said.

Apple also said the iPhone 15 Pro can capture what it calls “spatial videos” by using two of the device’s cameras to capture a three-dimensional video. Those videos will be viewable on Apple’s Vision Pro headset that is due out early next year, marketing chief Greg Joswiak said.

The Pro’s use of titanium makes it lighter and stronger than previous models of other metals.

Bob O’Donnell, head of TECHnalysis Research said the steady prices were a surprise.

“I think both Apple and the carriers recognize that with consumers feeling pressure on their budget and the lack of dramatic changes it’s getting harder to convince people to upgrade. Keeping prices stable should help with that,” he said.

The iPhone 15 costs $799, the iPhone 15 Plus starts at $899 and the Pro series starts at $999. The Pro Max starts at $1,199, the same prices as last year for the same levels of storage. Last year, Apple offered a $1,099 iPhone Pro Max model with less memory.

Apple still relies on iPhone for more than half of its sales, but the global smartphone market has slumped from shipping 294.5 million total phones to 268 million in the second quarter. Apple’s shipments declined the least of any major smartphone maker, dropping from 46.5 million phones to 45.3 million, according to data from Counterpoint Research.

NEW WATCH OUT

The outdoor sports-focused Apple Watch Ultra 2 has new features for cycling and diving and what Apple said is the brightest screen it has ever made. The Series 9 will start at $399 and the Ultra 2 watch will start at $799 and be available Sept. 22.

Apple will no longer use leather in any of its products, said Lisa Jackson, the company’s environmental chief. The company is replacing some of those products with a textile called “FineWoven” that it says feel like suede.

Apple made its effort to become carbon neutral by 2030 a focus of the event, including launches of lower-carbon watches.

(Reporting by Stephen Nellis in Cupertino, California; Additional reporting by Aditya Soni, Pushkala Aripaka, Raechel Thankam Job and Yuvraj Malik in Bengaluru; Editing by Peter Henderson and Lisa Shumaker)