Oil Surpasses 90, Bond Yields Surge: Factors Impacting New York's First Trading Day in September

On September 1 (local time), New York’s stock market began September broadly weaker, weighed down by a sharp rise in U.S. Treasury yields and oil prices. The S&P 500 closed at 7,631.47, down 0.71%; the Dow fell 0.79% to 52,766.88; and the Nasdaq slipped 1.03% to 26,099.77.

During the session, reports of an additional U.S. airstrike on Iran intensified risk-off sentiment. With fears that a blockade of the Strait of Hormuz could be prolonged, WTI surged to $90.22 per barrel and Brent to $94.65, while the U.S. 10-year Treasury yield re-tested 4.79%, its highest level since early 2025.

Economic indicators showed a “soft but still resilient economy,” prompting hawkish interpretations. August’s ISM Manufacturing PMI eased to 54.6 from 55.6 in July but remained well above the 50-point threshold, and July’s JOLTS job openings ticked up, signaling continued labor-market strength. Markets now price roughly a mid-60% chance of a rate hike in September following Fed Chair Powell’s Jackson Hole remarks, and Fed Governor Michelle Bowman’s speech that day merely reaffirmed the “additional tightening if necessary” stance.

By sector, the Energy ETF (XLE) rose 1.3%, directly benefiting from the oil-price surge, while defensive sectors such as utilities and healthcare posted modest gains. In contrast, the Technology ETF (XLK) fell 1.51% and the Consumer Discretionary ETF (XLY) dropped 1.73%. Overvalued growth and cybersecurity stocks came under particular pressure, dragging down the Nasdaq.

After the close, earnings news split the mood. Dell Technologies rallied about 7% in after-hours trading, recouping much of its weekly losses on strong AI server sales and an upwardly revised full-year outlook. Conversely, MongoDB slid over 10% on conservative guidance despite solid results, underscoring how elevated investor expectations are for high-multiple software names.

If oil remains above $90 and long-term yields stay elevated, hopes for an early Fed pivot will inevitably fade further. The U.S.-Iran conflict and U.S. employment data due later this week are likely to be key variables in gauging the magnitude of upcoming adjustments in global risk assets, particularly tech stocks.