S&P500 and Nasdaq Index: $100 Oil, 4.9% Yields Put Sellers in Control

Major Stock Indexes Lower as PPI Lifts Rate-Hike Odds to 70%

U.S. stocks are lower at mid-session Thursday as crude oil above $100, Treasury yields at multiyear highs, and a 70% probability of a September rate hike hit the indexes at the same time. The Producer Price Index came in slightly above estimates at 5.4% year over year. Fed funds futures repriced immediately. Rate-hike odds moved from roughly 64% before the report to about 70% after.

The selling is broad. Materials and technology are leading the decline. Chip stocks are getting hit the hardest. Breadth is firmly negative with declining stocks beating advancers 3.07-to-1 on the NYSE and 2.45-to-1 on the Nasdaq. Apple is up nearly 3% on the foldable iPhone launch and it is not enough to turn the tape.

Friday’s Consumer Price Index is the last inflation report before the September 15-16 Fed meeting.

At 16:20 GMT, the Dow Jones Industrial Average is down 350.24 points or 0.67% at 52,030.42. The S&P 500 is down 44.48 points or 0.58% at 7,591.88. The Nasdaq Composite is down 159.02 points or 0.61% at 26,094.32.

Daily S&P 500 Index (SPX) Technical Analysis

The S&P 500 Index is edging lower at mid-session on Thursday after reaffirming the downtrend on the swing chart with a break under 7,611.20. The benchmark index also crossed to the weak side of the 50-day moving average at 7,603.00, adding to the building downside pressure.

The intermediate range is 7,313.92 to 7,816.70. It is currently in a position to test its retracement zone at 7,565.31 to 7,505.98.

Both the swing bottom at 7,611.20 and the 50-day moving average at 7,602.98 failed to stop the price slide early Thursday. If downside momentum continues to build, then look for the pressure to possibly extend into 7,565.31 to 7,505.98. Don’t be surprised by a technical rebound on the first test of this area.

Daily Nasdaq Composite Index (IXIC) Technical Analysis

The Nasdaq Composite Index is also under pressure late in the session on Thursday. The tech-heavy index is currently straddling the 50-day moving average at 26,041.31 after briefly piercing the last swing bottom at 25,995.53. A sustained move under both of these levels will put the August 24 main bottom at 25,910.82 back on the radar.

Selling pressure could increase on a sustained move under 25,910.82, with the intermediate retracement zone at 25,650.43 to 25,361.31 the primary downside target.

Crude Above $100 Pushed Rate-Hike Odds to 70%

Brent climbed more than 4% and moved above $100 a barrel as fighting in the Middle East continued to disrupt supply routes through the Strait of Hormuz and Red Sea. Headline PPI rose 5.4% year over year in August, slightly above the 5.3% estimate. Traders responded by pushing rate-hike odds higher immediately.

The Treasury Department said Wednesday it would buy up to $6 billion of longer-dated Treasury securities. The 10-year yield pushed to 4.9198% anyway, its highest since 2023. The 2-year jumped to 4.5287%, its highest since 2024. Bessent’s buyback did not calm the long end. The bond market is still demanding more return with oil above $100.

Chips Are Rolling Over the Hardest

Intel and Micron Technology are both down about 5%. These are the high-beta names that led on the way up. Thursday they are leading on the way down. Technology overall is down about 0.6% but the individual chip losses are running well ahead of the sector average.

Breadth Says the Selling Is Broad

The new-high/new-low numbers tell the story. The S&P 500 posted seven new 52-week highs against 20 new lows. The Nasdaq recorded 18 new highs against 132 new lows. That is not one sector dragging the tape. Sellers are working across the board.

Materials are the weakest S&P 500 sector, down about 1.45%. Consumer staples are higher as money rotates toward the defensive side while higher-beta groups come under pressure.

Apple Is Fighting the Tape Alone

Apple is up about 2.8% after Wednesday’s launch of the $1,999 foldable iPhone Duo. The stock is attracting buyers while the rest of technology sells. A nearly 3% Apple rally is not pulling the Nasdaq into positive territory. That tells you how weak the rest of the tape is.

Stocks in the News

American Eagle Outfitters is down nearly 15% and trading at its lowest since October. The company maintained its annual comparable-sales forecast while saying current-quarter gross margins could be unchanged from a year earlier.

Macy’s is down about 2.4% despite raising annual forecasts on stronger results from Bloomingdale’s and Bluemercury. The stock has been volatile during the session. Company-specific good news is not competing with $100 oil and 4.9% yields on Thursday.

What to Watch

Friday’s Consumer Price Index is the last report before the September 15-16 Fed meeting. The PPI pushed rate-hike odds from 64% to 70%. Treasury yields moved to multiyear highs. Oil stayed above $100. The CPI is the only number left that can change the conversation before next week.

Apple has the product catalyst. The rest of the market is trading oil, yields, and the Fed. Breadth is weak. Chips are rolling over. The 10-year is near 4.92% and Bessent’s $6 billion buyback did not slow it down.

The S&P 500 reaffirmed the downtrend Thursday with a break below the swing bottom and the 50-day moving average. The retracement zone at 7,565.31 to 7,505.98 is the next target. A technical bounce on the first test of that zone would not be unusual but the selling has room to extend if the 50-day is not recaptured. The Nasdaq is straddling the 50-day at 26,041.31 after piercing the swing bottom. A sustained break below 25,910.82 opens the retracement zone at 25,650.43 to 25,361.31. The bearish read holds as long as 26,700.68 stays intact.

More Information in our Economic Calendar.