Short Week Packs a Punch: Stocks Down Early on Oil
Published as of: September 8, 2026, 9:09 a.m. ET
(Tuesday market open) Major indexes mostly fell early thanks to the usual suspects: rising Treasury yields and crude oil. Attacks on Saudi Arabia's oil facilities earlier today, tit-for-tat strikes between Iran and the U.S., growing trade tensions with Canada, and rising prospects of central bank hikes combined forces in a stiff headwind, though 10-year note yields eased from early highs above 4.8%.
Before the holiday weekend, Friday's U.S. August jobs report showed three times the expected growth at 162,000. The three-month average near 71,000 looked relatively solid. Today is light on data, but things get interesting Thursday and Friday with August U.S. inflation readings. Overseas, the yen surged on Japan's stronger gross domestic product, hurting the dollar and reinforcing ideas that the Bank of Japan could raise rates next week. That's one source of pain for U.S. Treasuries today.
Major indexes eased Friday to finish a roughly flat week after a series of strong tech-related earnings reports and mostly solid data. "Rate hike probabilities rose following the jobs report, which appears to be due to a belief that a healthy labor market will make it easier for the Fed to move forward with rate hikes," said Nathan Peterson, director of derivatives research and strategy at the Schwab Center for Financial Research (SCFR), in his Weekly Trader's Outlook.
Three things to watch
- Bond market week ahead: Two Treasury auctions loom with yields at long-term highs. Today's 3-year note auction is followed by a 10-year note auction tomorrow. Weak demand despite high yields might signal investors waiting to see if the Federal Reserve raises rates next week, with chances now at 60%, according to the CME FedWatch Tool. The last round of auctions drew mixed enthusiasm. This week also kicks off larger liquidity buybacks recently announced by the Treasury, with a possible easing effect on yields. There's also overseas activity to monitor as the European Central Bank is expected to announce a hike early Thursday. The hike is largely baked in, but what the statement and press conference indicate about next steps might be illuminating. Back home, Thursday's Producer Price Index (PPI) and Friday's Consumer Price Index (CPI) outweigh other metrics, with headline CPI seen up about 0.4% monthly, according to consensus. Consensus for the core annual CPI figure, excluding food and energy, is 2.3%, a five-year low. Such a figure might give the Fed pause, for lack of a better word.
- Sector implications if Fed hikes: A Fed rate hike might influence different stock market sectors, but the impact could depend on whether the Fed hikes once or twice versus embarking on a long cycle. A hike or two might not have much effect if the Fed makes clear these are minor adjustments. And of course there's no guarantee of a hike at all. If hikes happen, the tech sector likely will be in the spotlight, as its earnings have powered Wall Street this year and high rates tend to hurt perceived future earnings growth. Tech also is a long-duration part of the market, meaning its strength depends on expectations of growth that could take place well into the future and less on the impact of current conditions. "When you face higher interest rates, it tends to put downward pressure on those longer-duration segments of the equity market," said Liz Ann Sonders, chief investment strategist at SCFR, in the latest Schwab On Investing Podcast. Industrials is another sector to monitor if rates start rising, because it's been lifted by the build-out of AI and the investments in data centers, Sonders added.
- Checking the charts: Technically, the major indices have held their ground and mostly traded in sideways consolidation patterns over the past month, which could be interpreted as relatively bullish given the recent escalation in Iran and correspondingly higher oil prices and yields. "However, I’m not sure how resilient U.S. equities will be if the Iran conflict gets worse and oil prices and yields continue to march higher," my colleague Peterson said Friday. "Throw in bearish seasonality during the month of September, along with the potential for higher volume and adjustments to positioning when most fund managers and traders come back from vacation today, and I’m going to stay with a 'cautious' outlook for the week." For the S&P 500 Index, 7,600 appears to be an important support area, and the index remains rangebound between 7,600 and 7,800. From a momentum standpoint, it gained some ground late last week when the Relative Strength Index topped 55 after previously falling under 50. That's roughly mid-range but somewhat positive, still well below the mid-August peak above 70.
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On the move
- Novartis AG (NVS) plunged 12% before the open on disappointing drug trial results for neuromuscular treatment. Amgen (AMGN) fell almost 6%, as it's working on a similar drug, and Amgen's weakness pulled down the Dow Jones Industrial Average early.
- Peloton Interactive (PTON) dropped 5% as Morgan Stanley downgraded shares to underweight from equal weight, citing "structural headwinds" in the company's business.
- Intel (INTC) clicked up almost 5% this morning amid a general surge in shares of AI-related stocks. Advanced Micro Devices (AMD) rose 1.5%, ASML (ASML) rose 3%, and Marvell Technology (MRVL) climbed 1%.
- Roivant Sciences (ROIV) spiked almost 19% in early trading following strong results in a trial testing its lung disease drug.
- Bloom Energy (BE), Everpure (P), and Illumina (ILMN) all jumped this morning on news they'd be added to the S&P 500 Index on September 21, Barron's reported.
- Boston Scientific (BSX) fell 2.4% early. The company said in a regulatory filing today it's unlikely to meet net sales growth and adjusted earnings guidance for the current quarter and full year, Barron's reported, amid fallout from a late August cyberattack.
- Tesla (TSLA) inched up this morning but dropped 6% Friday after revealing its latest driverless car at an event in Austin Thursday. The event didn't feature CEO Elon Musk and generally failed to impress, media reports said.
- Amazon (AMZN) sank almost 1% early after an Amazon cargo plane ran off a runway in Miami over the weekend, killing several people.
- Copper (/HG) rallied to record highs early Tuesday above $6.81 per pound and is up almost 20% this year, partly lifted by data center construction demand, The Wall Street Journal reported. Declining production and President Trump's threat to impose new import taxes on copper contributed to gains.
- Media-related names generally declined Friday, with Netflix (NFLX) falling 5%. Shares of Netflix had risen about 20% from the July low but are down 28% from the April peak.
More insights from Schwab
Social connections: The latest episode of Choiceology with Katy Milkman asks whether our instincts talk us out of happiness and look at the barriers we build between ourselves and the rest of the world, why we might misjudge the social value of a simple conversation, and how connecting more can make us happier and wiser.
Sector check: Schwab's monthly sector views providing an outlook for the 11 S&P 500 equity sectors is freshly updated. More favored sectors include financials, health care, industrials, and materials. Consumer discretionary and real estate are least favored.
Chart of the day
Data source: S&P Dow Jones Indices. Chart source: thinkorswim® platform.
Past performance is no guarantee of future results.
For illustrative purposes only.
Indexes often jump from range to range and find a trading level in each, at least during times when the market isn't overly volatile. With volatility mostly light all summer, the S&P 500 Index (SPX—candlesticks) has spent three months in two separate ranges (denoted by the blue and red lines), while the 50-day moving average (blue line) now sits basically at the bottom of the current range of 7,600 to 7,800.
The week ahead
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