U.S. Stock Market Sees "September Swoon": Oil Price and U.S. Bond Yields Rise in Tandem, High-Risk Assets Under Pressure

BlockBeats News, September 1st. On the first trading day of September, the three major U.S. stock indexes collectively opened lower. The Dow fell by 0.64%, the S&P 500 fell by 0.71%, and the Nasdaq fell by 1.31%. The Philadelphia Semiconductor Index once fell by over 3%. Intel and Qualcomm fell by nearly 3%, AMD and Meta fell by over 2%, while Tesla, Alibaba, and Nvidia fell by nearly 2%.

The key factor putting pressure on the market is the simultaneous rise in oil prices and global bond yields. Brent crude oil broke through $92 per barrel intraday. The market is concerned that the situation in the Middle East and disruptions in the Strait of Hormuz could push up energy prices and inflation, further strengthening expectations of Fed rate hikes. Currently, the CME's "FedWatch" shows that the probability of a 25 basis point rate hike in September to 3.75%-4.00% has risen to 66%.

Paul Ciana, a technical strategist at Bank of America, stated that the S&P 500 Index's upward breakthrough since August is still intact, but only if it holds above 7500 points. At the same time, both the RSI and MACD have not confirmed recent price highs, indicating that the upward momentum is weakening. Ciana pointed out that seasonal headwinds, election uncertainty, and rising short-term Treasury yields are posing greater challenges to the market. The rise in yields increases the risk of the stock market entering into a consolidation phase rather than accelerating its upward trend.

Miller Tabak strategist Matt Maley also warned that the stock market has been able to ignore the rise in yields so far, but that doesn't mean the pressure of high yields won't eventually show up. J.P. Morgan believes that rising yields may not necessarily become an insurmountable obstacle for the bull market, as they may reflect stronger economic momentum.