Nasdaq 100: Alphabet Surge Drives Rebound, But Fed Risks Curb Optimism

Alphabet-Fueled Tech Rally Lifts S&P 500, but September Volatility Lurks

U.S. stocks rebounded early Wednesday, led by a surge in Alphabet shares after a favorable antitrust ruling, offering a brief reprieve to investors on edge over rising Treasury yields, legal uncertainties around tariffs, and growing concern over the Federal Reserve’s independence. The S&P 500 gained as much as 0.7%, with the Nasdaq following higher, boosted by strength in communication services and technology sectors.

Alphabet Class A and C shares jumped over 8% after a federal court allowed Google to maintain its Chrome browser while banning exclusive search deals. Apple also climbed nearly 3% as the decision preserved its lucrative search arrangement with Google. The broader tech sector responded in kind, with the Communication Services index up 3.5% and Technology gaining 0.76%.

What’s Driving the Bond Market Reset?

Even as stocks rallied, pressure in the bond market remained a focal point. The 30-year Treasury yield fell more than 6 basis points to 4.905% after briefly topping 5% overnight. The 10-year yield eased to 4.226%, still near levels that threaten equity valuations. Yields retreated in response to a softer-than-expected JOLTS report showing job openings at 7.18 million in July—below the 7.4 million estimate.

Tuesday’s session, however, laid bare broader unease. All three major U.S. indexes closed lower, with the S&P 500 dropping 0.7% as markets reopened from the Labor Day holiday. The CBOE Volatility Index touched a one-month high, reflecting investor concern over the legality of Trump-era tariffs and speculation that refunds could blow a hole in the U.S. budget.

Is the Federal Reserve’s Independence at Risk?

Investors are increasingly wary of political interference at the Fed. A Senate hearing this week will consider Stephen Miran, a Trump ally, to fill a temporary Fed seat, replacing Adriana Kugler. The nomination arrives as Trump steps up criticism of Chair Jerome Powell and pushes to oust Governor Lisa Cook. Traders fear that any erosion in Fed autonomy could destabilize monetary policy just as inflation remains persistent.

Sector Moves and Trading Themes to Watch

Beyond tech, sector performance was mixed. Consumer discretionary led gains, up 0.81%, while energy slumped 2.13% on falling crude. ConocoPhillips dropped 4.6%, Devon fell 3.6%, and Occidental slid 3.3%. Dollar Tree sank 7.5% after disappointing earnings, marking the worst performance on the day.

Will Friday’s Jobs Report Steer Fed Expectations?

With August non-farm payrolls due Friday, traders are looking for clues on how aggressively the Fed can respond to economic cooling. Despite signs of labor market easing, continued inflationary pressures may cap the Fed’s willingness to cut rates. Until then, bond yields, Fed politics, and tariff fallout are likely to keep volatility elevated as the historically weak month of September unfolds.

More Information in our Economic Calendar.