September Opens on the Back Foot as Crude Climbs and the Long End Holds Near Multi-Year Highs

by Tomas Ferreira · September 1, 2026

Markets Reporter, US Market Current

The US equity market began September in the red. Yahoo Finance's Tuesday market report, published at 9:50 a.m. ET, showed the S&P 500 at 7,645.05, down 41.09 points or 0.53%. The Dow Jones Industrial Average stood at 53,000.21, off 185.69 points or 0.35%. The Nasdaq Composite was the weakest of the majors at 26,131.82, down 239.07 points or 0.91%, and the Russell 2000 was at 2,932.67, lower by 23.78 points or 0.80%.

Those are intraday marks carrying that report's 9:50 a.m. ET stamp, not settlements, and the session has run on for hours since. Where the indexes stand now, and where they finish, are different questions. The most recent completed session was Monday, August 31, and it was also a down day: the S&P 500 closed at 7,686.14, a loss of 25.62 points or 0.33%. The Dow closed at 53,185.90, down 374.09 points or 0.70%. The Nasdaq Composite finished at 26,370.89, off 31.53 points or 0.12%, and the Russell 2000 ended at 2,956.45, down 15.92 points or 0.54%.

The proximate catalyst for Tuesday's weakness was overnight news out of the Persian Gulf. Yahoo Finance reported that two oil tankers — one Saudi-owned, one South Korean-owned — were hit by projectiles Monday night amid renewed US-Iran hostilities around the Strait of Hormuz. Daniela Hathorn, senior market analyst at Capital.com, told the outlet that "Markets are starting September cautiously, with investors balancing renewed geopolitical uncertainty," alongside elevated yields and the latest US economic data.

Crude did what crude does on that kind of headline. The October WTI contract was quoted at $88.27 a barrel in that same 9:50 a.m. ET report, up $2.51 or 2.93% on the day — again an intraday quote, not a settlement. Monday's WTI settlement was $85.76, a gain of $2.36 or 2.83%. Brent had already brushed the $90 handle: ING's commodities team wrote Monday morning that ICE Brent briefly moved above $90 a barrel in early Asian trading.

The chokepoint math is what keeps a bid under the barrel. ING commodities strategists Warren Patterson and Ewa Manthey noted that between 6 million and 8 million barrels a day transit the Strait of Hormuz, though their own working assumption is an average of 5 million barrels daily, and warned that "Further escalation could put these flows under renewed pressure." They flagged a second supply wrinkle alongside it: Russia said over the weekend it would extend its ban on diesel exports by another month, through the end of September 2026, tightening a distillate market already dealing with Gulf disruption.

The bond market has been the other pressure point. The 10-year Treasury yield closed Monday at 4.756%, up about 3.4 basis points on the session, while the 30-year finished at 5.25%, up roughly 5 basis points. A long end holding at those levels while crude runs is an awkward combination for equity multiples, and it showed up most clearly in the growth-heavy Nasdaq on Tuesday morning.

Risk gauges moved accordingly. The Cboe Volatility Index was quoted at 15.87 in the 9:50 a.m. ET report, up 0.95 points or 6.36% — elevated on the day but still well inside the range that has prevailed through the summer. Gold, notably, did not act as the reflexive safe haven; it was quoted at $4,411.40, down $70.10 or 1.56%, in the same report. All of those are intraday marks.

None of Tuesday's weakness erases what was a constructive August. Investrade's month-end review put the Dow up 2.1% for the month, with the S&P 500 up 3.0% and the Nasdaq Composite up 4.0% — the first monthly gain since May for the latter two. Sector performance for the month was led by technology, with the XLK up about 6%, followed by materials, healthcare and energy each up roughly 5%. Utilities were the notable laggard at down 3.6%, with industrials off 1.5%.

Two data points arrived at 10 a.m. ET, after that morning snapshot was taken. The Institute for Supply Management reported that its Manufacturing PMI slipped to 54.6% in August from 55.6% in July, undershooting the 55.2% that Reuters said its polled economists had expected, with new orders falling to 53.7% from 56.7%. The ISM Prices Index was unchanged at 71.1%. Separately, the Bureau of Labor Statistics said July job openings were little changed at 7.3 million on a seasonally adjusted basis, with the quits rate holding at 1.9%.

That combination — decelerating activity, unmoved input costs — lands into a rate debate that is running in the unfamiliar direction. The federal funds target range tops out at 3.75%, and the Federal Open Market Committee meets September 15-16. Reuters reported Tuesday that markets were pricing a roughly 70% chance of a 25 basis point hike at that meeting, crediting CME Group's FedWatch tool. Tech Times, writing Tuesday morning, cited the same CME FedWatch Tool in a 65% to 68% range as of the market open. That is one compiler read at two different moments of a moving session, not two compilers disagreeing; the direction is the point.

Fed Chair Kevin Warsh has been explicit that the burden of proof sits on the disinflation side. "While this summer's PCE and CPI readings were better than expected, they do not tell me that underlying trends have meaningfully improved," he said. Liz Ann Sonders, chief investment strategist at the Schwab Center for Financial Research, characterized his Jackson Hole remarks as hawkish, noting he said prices were "not meaningfully slowing."

The calendar does not let up. Per Kiplinger's schedule for the week, the ADP National Employment Report for August is due Wednesday morning, followed by July factory orders at 10 a.m. and the Beige Book at 2 p.m. Thursday brings weekly jobless claims, the July trade balance and the ISM Services PMI for August. The August employment situation report is scheduled for Friday at 8:30 a.m. ET; Barclays Economics is looking for 25,000 jobs added with unemployment unchanged at 4.1%, and puts the three-month average near 7,000.

For now the tape is doing the arithmetic in real time: an oil-driven inflation impulse on one side, a labor market that added no net jobs in July on the other, and a central bank that has told markets which of the two it is watching more closely. Tuesday's close, whenever it lands, will not settle that argument.