Stocks opened under pressure on September 1 as three forces pushed the same way: higher crude oil, higher bond yields, and a higher US dollar. Crude oil rose 2.8%, sitting near $88 a barrel. The 10-year Treasury yield reached 4.79% (4792). The dollar rose about 0.2% to 9950. E-minis fell about 710 points to the day's low. The NASDAQ dropped 1.4%.
The main driver is tension between the US and Iran. Right now it feels like escalation. Qatar, Oman, and Pakistan are trying to negotiate a reopening or a step down in tension in the Strait of Hormuz. Until that shifts, the disruption keeps hurting crude oil and the wider market.
Why oil matters so much
Anything that moves goods from one place to another gets hit by costlier oil: airlines, trucking, shippers, and cruise lines. The US consumer feels it too. Cruise lines were already under pressure yesterday; as oil climbs, truckers, shippers, and airlines are next. High oil prices make the whole economy suffer, and the question now is how long markets can absorb oil at $88 a barrel.
Yields have climbed alongside crude, which points to a supply shock. Scott Bessant and the Trump administration call this shock temporary. Their view is that the long-term outlook for crude oil is good, helped by a new deal with Venezuela that they see as strong for the US and good for Venezuela as well. The near-term problem stays the Strait of Hormuz disruptions.
August recap and the search for a turn
In August the small-caps led. Ranked by gains: the Russell (about 2%, up 1% on the day being referenced), then the Dow, then the S&P, then the NASDAQ. Selling started yesterday and carried into today. What could turn it around is unclear - oil news or something on jobs might help - but it is a heavy week.
The data week ahead
A full run of labor and factory data lands, a bit each day through Friday's payrolls report.
- 9:45 - final PMI manufacturing
- 10:00 - ISM manufacturing index, plus construction spending
- JOLTS job openings today, the first look at the labor market. Openings are expected between 7.3 and 7.35 million; a month ago the figure was 7.359 million.
- ADP tomorrow
- Jobless claims Thursday
- Non-farm payrolls, unemployment, and wages Friday - the wages data gives the first look at inflation
Earnings and names to watch
NIO reports, and its outlook fell short. Delivery numbers from Chinese carmakers are due. Other earnings across the day include Medtronic, Palo Alto (PANW), Dell (DELL), and MongoDB (MDB) - some early, some late.
