The S&P 500 Index ($SPX) (SPY) is down by -0.41% today, the Dow Jones Industrial Average ($DOWI) (DIA) is down by -0.58%, and the Nasdaq 100 Index ($IUXX) (QQQ) is down -0.68%. December E-mini S&P futures (ESZ26) are down -0.48%, and December E-mini Nasdaq futures (NQZ26) are down -0.70%.
Stock indexes are under pressure today, with the Dow Jones Industrials falling to a 1-week low as higher crude oil prices fuel inflation concerns and push up bond yields worldwide. WTI crude is up more than +2% today after an Iranian official warned Iran may expand the war to the Indian Ocean if the US or Israel attacks again.
The jump in crude oil prices has sparked a sell-off in global bond markets, with the 10-year T-note yield climbing to a 19-year high of 5.15%, the German 10-year Bund yield rising to a 17-year high of 3.59%, and Japan’s 10-year JGB bond yield soaring to a 30-year high of 3.09%. The surge in bond yields is weighing on interest rate-sensitive technology stocks today, with chipmakers and AI-infrastructure stocks retreating.
However, stocks recovered from their worst levels on signs of strength in the US economy after weekly jobless claims unexpectedly fell to a 2-month low and Aug new home sales rose to an 8-month high. Also, T-note yields fell from their early highs and stabilized.
Also on the positive side for stocks, Treasury Secretary Bessent said late Wednesday that the US and China agreed to extend their trade truce an additional two months until January 10.
US weekly initial unemployment claims unexpectedly fell -1,000 to a 2-month low of 197,000, showing a stronger labor market than expectations of an increase to 200,000.
US Aug new home sales rose +6.4% m/m to an 8-month high of 684,000, stronger than expectations of 616,000.
Hawkish Fed comments today signal support for additional rate hikes and are negative for stocks and bonds. New York Fed President John Williams said the Fed still has a lot of work to do given high energy prices and demand driven by investment in artificial intelligence. Also, Philadelphia Fed President Anna Paulson said underlying measures of inflation remain "stubbornly elevated" and have shown little to no progress. "Looking ahead, if conditions evolve as I expect, some modest further tightening of monetary policy may be warranted" to ensure inflation returns to the Fed's 2% goal.
Nov WTI crude oil prices (CLX26) are up more than +2% after Iran threatened to expand the war in the Middle East after a senior member of Iran's Revolutionary Guard Corps warned that Iran may expand the war to the Indian Ocean if the US or Israel attacks again. Optimism that the US and Iran could reach a settlement that would help normalize energy flows through the Strait of Hormuz has receded over the past two days amid aggressive rhetoric from President Trump and defiance from Iran.
Markets are discounting a 65% chance of a +25 bp Fed rate hike at the next FOMC meeting on October 27-28.
Overseas stock markets are mixed today. The Euro Stoxx 50 is down -0.03%. China's Shanghai Composite closed down -1.22%. Japan's Nikkei-225 Stock Average rallied to a 2-week high and closed up +0.76%.
Interest Rates
December 10-year T-notes (ZNZ6) are down by +3 ticks today. The 10-year T-note yield is up +1.3 bp to 5.127%. Dec T-notes matched Wednesday’s 19-year nearest-futures low today, and the 10-year T-note yield climbed to a 19-year high of 5.148%. Today’s +2% increase in WTI crude oil prices has boosted inflation expectations and is weighing on T-notes. Also, today’s better-than-expected US economic news on weekly jobless claims and Aug new home sales show economic strength and are hawkish for Fed policy. In addition, hawkish Fed comments today are weighing on T-notes prices after New York Fed President John Williams and Philadelphia Fed President Anna Paulson signaled their support for tighter Fed policy. Finally, supply pressures are bearish for T-notes as the Treasury will auction $44 billion of 7-year T-notes later today.
European government bond yields are moving higher today. The 10-year German bund yield rose to a 17-year high of 3.594% and is up +3.4 bp to 3.589%. The 10-year UK gilt yield rose to a 1-week high of 5.388% and is up +0.5 bp to 5.352%.
Eurozone Aug new car registrations rose +4.5% y/y to 708,000 units.
The German Sep IFO business climate survey rose +1.1 to a 3.25-year high of 89.9, stronger than expectations of 89.0.
ECB Executive Board member Isabel Schnabel said the energy shock caused by the Iran war is proving to be longer-lasting than initially thought and is spreading beyond just oil.
ECB Governing Council member Dimitar Radev said policymakers must give recent interest rate hikes time to work before assessing whether additional hikes are needed.
Markets are discounting a 55% chance of a +25 bp ECB rate hike at the ECB’s next meeting on October 29.
US Stock Movers
Chipmakers and AI stocks are under pressure today, weighing on the overall market. The iShares Semiconductor ETF (SOXX) is down more than -1%. Western Digital is down more than -3% to lead losers in the Nasdaq 100 and ARM Holdings Plc (ARM) is down more than -3%. Also, SanDisk (SNDK), Microchip Technology (MCHP), Applied Materials (AMAT), Marvell Technology (MRVL), KLA Corp (KLAC),Broadcom (AVGO), Qualcomm (QCOM), NXP Semiconductors NV (NXPI), and Lam Research (LRCX) are down more than -2%. In addition, Micron Technology (MU), ASML Holding NV (ASML), Nvidia (NVDA), Analog Devices (ADI), and Texas Instruments (TXN) are down more than -1%.
Software stocks are under pressure today, led by a -5% fall in Oracle (ORCL) after it sent a notice citing force majeure to the project’s developer of a data center, a unit of Blue Owl Capital, in New Mexico in an attempt to put off payments should the data center dubbed Project Jupiter get derailed and fail to come online in 2028 as planned. Also, IBM (IBM) is down more than -2% to lead losers in the Dow Jones Industrials. In addition, ServiceNow (NOW), Microsoft (MSFT), and Autodesk (ADSK) are down more than -1%.
Energy stocks and service providers are climbing today, with WTI crude oil up more than +2%. Valero Energy (VLO) is up more than +3%, and Devon Energy (DVN), Diamondback Energy (FANG), Marathon Petroleum (MPC), and Phillips 66 (PSX) are up more than +2%. APA Corp (APA), Chevron (CVX), ConocoPhillips (COP), Occidental Petroleum (OXY), ExxonMobil Holdings (XOM), and Halliburton (HAL) are up more than +1%.
MGM Resorts International (MGM) is down more than -9% to lead losers in the S&P 500 after People Inc. dropped its plans to acquire the remaining shares of the company.
Gen Digital (GEN) is down more than -6% after the Financial Times reported the company has made an offer to acquire GoDaddy.
Rollins (ROL) is down more than -6% after Piper Sandler downgraded the stock to neutral from overweight.
Dropbox (DBX) is down more than -3% after Citigroup downgraded the stock to sell from neutral with a price target of $29.
Alkami Technology (ALKT) is down more than -3% after JPMorgan Chase double-downgraded the stock to underweight from overweight with a price target of $14.
Everpure (P) is up more than +17% to lead gainers in the S&P 500 after forecasting 2028 revenue of $7.0 billion to $7.3 billion, well above the consensus of $6.19 billion.
GoDaddy (GDDY) is up more than +7% after the Financial Times reported that Gen Digital has made an offer to acquire the company.
Charles River Laboratories (CRL) is up more than +5% after reaffirming its 2026 financial guidance.
Dollar General (DG) is up more than +2% after HSBC upgraded the stock to buy from hold with a price target of $160.
Earnings Reports (9/24/2026)
Costco Wholesale Corp (COST), Darden Restaurants Inc (DRI), NexPoint Diversified Real Estate Trust (NXDT), Scholastic Corp (SCHL), TD SYNNEX Corp (SNX).
