September opened with a jolt, and it wasn't a gentle one.
US crude jumped more than 5% Tuesday, breaking past $90 a barrel after renewed fighting between the US and Iran raised fresh fears of disrupted oil flows through the Strait of Hormuz. That spike rippled straight into bond markets — the 10-year Treasury yield touched 4.814%, its highest level since November 2023, while Japan's 10-year government bond yield hit 3% for the first time since 1996.
The Dow dropped more than 400 points Tuesday as the combination hit stocks hard, though Wednesday brought a partial bounce: the Dow edged up 0.37%, the S&P 500 crept 0.06% higher, while the Nasdaq slipped slightly and the Russell 2000 fell 1.23%.
Evercore ISI's Krishna Guha summed up the market's real concern bluntly, telling Bloomberg this is "an inflation first Fed right now" — meaning oil prices and bond yields may weigh more heavily on the Fed's coming rate decision than even the jobs data investors usually obsess over.
Speaking of jobs: ADP reported private companies added just 38,000 positions in August, below the 47,000 economists expected and the slowest pace since January — one more data point the Fed will be weighing at its meeting later this month.
Some individual stocks told their own stories entirely. Nike hit a 52-week low, trading at levels not seen in over two decades. Novartis jumped as much as 5% on unrelated pharmaceutical news. Marathon Petroleum, riding the oil surge, traded at levels last seen back in 2011.
For now, strategists at Edward Jones remain cautiously optimistic on the 12-month outlook, citing strong corporate profit growth. But they're also flagging something seasonal: August and September have historically been the market's weaker months — and this year, geopolitical tension isn't making that pattern any gentler.
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