Last week’s market finished with gains and renewed optimism… amid many distractions as bonds continued to adjust yields upward, and stocks appreciated across–the–board, reversing a ‘short–stint’ of restlessness. The Dow Jones Industrial Average added 495 points, standing at 51829. Both the Nasdaq Composite and S&P 500 were up 0.5%. Big technology, semiconductor, software and artificial intelligence issues all edged higher as investors and traders ‘stood strong’ for the growth sectors. The 10–year Treasury note reached a new high of 5.228% closing Friday at 5.18%, (only the start). Oil slipped, giving the market a pause, driven by renewed Iranian negotiations that show some positive indication on reopening of the Strait of Hormuz. Oil closed at $104.32 a barrel Friday. Mona Mahajan, head of investment strategy at Edward Jones commented: “If bond yields stay elevated or continue to rise and stay there for an extended period of time, that would weigh on both stocks and growth. But thus far, I think the growth story is challenged, but not derailed in any way.” The University of Michigan released its Consumer Sentiment Survey for September showing that “Consumer sentiment weakened but is showing some positive signs, not as gloomy as expected.”
Interest rates surged, stocks sagged Monday as the bond market continued to haunt investors. The benchmark 10–year Treasury note yield has soared to a 19–year high, driven by a massive bond sell off that appears to be building steam. President Trump refused a ”proposed 7 day cease–fire with Iran’” sparking oil prices higher. Some oil specialists are concerned that there is developing a fuel shortage as reserves are “running low.” U.S. production and reserves, according to the American Petroleum Institute, are in ‘good balance’ able to supply demand in the U.S. for the foreseeable future. Indexes on Monday were negative, as the S&P 500 and Nasdaq Composite fell 0.8% and 0.9% respectively. The blue–chip Dow Jones Industrial Average lost 347 points, as trading volumes were slight. Joseph Zappia, a managing and co–chief investment officer at LVW Advisors aptly noted, “It’s more of the same; Higher yields and higher oil prices put pressure on equities”
Bond yields marched higher Tuesday as the bond sell–off deepened. Oil slipped lower, stocks continued to fall as energy prices edged higher, giving good reason for the Fed to consider another raise–possibility before year’s end. According to TradeWeb, “The 30 year–yield is now at 5.94% while the 10 year yield is 5.296%.” Indexes Tuesday were unsettled with The Dow Jones Industrial Average off 0.3%, while the Nasdaq and S&P 500 finished just below flatline, off 0.1% and 0.2% respectively. “We’ve seen the market really start to try to wrap its arms around how much higher rates need to go for the Fed to achieve its goal,” said Rebecca Venter, a senior fixed income client portfolio manager at Vanguard. Brent crude fell 2.6% to $102.59 Tuesday, as West Texas Crude settled (Wednesday) at $92.11 a barrel. “Unfortunately we are in a one factor world right now with oil prices impacting rates and rates being the main driver of all asset classes,” said Mohit Kumar, chief European Economist at Jefferies.
The PCE (Personal Consumption Expenditures Index) released Wednesday “showed prices cooled more than expected in September, reinforcing the notion that the Fed ‘could wait for another hike.’ Bitcoin finished the quarter up 42%, presently at $84,354.81, leading the entire cryptocurrency sector higher. Interestingly, oil finished the quarter…up 42% also.
RUMBLINGS ON THE STREET
Jeffery Roach, LPL Financial chief economist, Barron’s – “The borrowers who are traveling and eating out won’t cut demand just because the Fed funds rate rose by 25 basis points.”
Bret Kenwell, US Investment analyst at eToro, WSJ – “So far the market has done a great job sailing into the headwinds and brushing them off. The question, as markets stretch with the fourth and final quarter of 2026, is just how long that relative resilience can last.”
Mayukh Podder, Senior portfolio manager at Altfast Personal Wealth Management, Barron’s – ”We do see this rate increase hike as something that’s going to be beneficial for anyone who relies on (their fixed income) portfolio for a stream of reliable income.”
