The S&P 500 Index ($SPX) (SPY) closed down by -0.45% on Tuesday, the Dow Jones Industrial Average ($DOWI) (DIA) closed down by -0.63%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed down by -0.65%. E-mini S&P futures (ESU26) fell -0.44%, and September E-mini Nasdaq futures (NQU26) fell -0.61%.
Stock indexes settled lower on Tuesday, with the S&P 500 and the Dow Jones Industrials falling to 6-week lows. Stocks are under pressure as elevated crude oil prices raise inflation expectations and push bond yields higher worldwide. Crude prices surged by more than +4% on Tuesday, pushing the 10-year T-note yield to a 19-year high of 5.04%. The 10-year German Bund yield also rose to a 17-year high of 3.57%, and the 10-year Japan JGB yield rose to a 30-year high of 3.04%.
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Also, enthusiasm for the AI trade, the major driver of stock gains this year, remains tempered as debate continues over whether the technology may inflict catastrophic harm and whether political pressure for new regulations may slow development. In addition, cryptocurrency-exposed stocks tumbled on Tuesday as Bitcoin fell more than -4% after the Senate blocked a digital asset market structure bill in a procedural vote.
Stock losses were limited as chipmakers and AI-infrastructure stocks recovered some of Monday’s sell-off and moved higher. Energy producers also rallied on Tuesday, with crude oil prices up more than +4%.
As a bearish factor, the US Sep Empire manufacturing survey of general business conditions fell -13.0 points to 7.6, weaker than expectations of 15.0.
Weaker-than-expected economic news from China is negative for economic growth prospects and bearish for stocks. China Aug retail sales rose +0.4% y/y, weaker than expectations of +0.8% y/y. Also, the China Aug surveyed jobless rate unexpectedly rose +0.1 to 5.3%, showing a weaker labor market than expectations of no change at 5.2%. In addition, China Aug new home prices fell -0.17% m/m, the thirty-ninth consecutive month home prices have declined. On the positive side, China Aug industrial production rose +5.2% y/y, stronger than expectations of +4.8% y/y.
Oct WTI crude oil prices (CLV26) surged more than +4% on Tuesday to a new 3.75-month high. Crude prices are climbing as disruptions to Middle East supplies persist, further tightening global oil supplies. Last Friday, Saudi Arabia closed a major pipeline following attacks, disrupting a key route that bypasses the Strait of Hormuz. The East-West pipeline, which carries 7 million bpd of crude, was closed after threats from Houthi rebels, and officials gave no indication of when it will reopen. The pipeline moves oil away from the Persian Gulf toward the Red Sea, where it can be loaded on tankers. Saudi Arabia told OPEC last Thursday that its crude production in August fell to 6.238 million bpd, the lowest since 1990.
Markets are discounting a 96% chance of a +25 bp Fed rate hike at the Tue/Wed FOMC meeting.
Overseas stock markets settled lower on Tuesday. The Euro Stoxx 50 dropped to a 2.25-month low and closed down -0.38%. China's Shanghai Composite closed down -0.54%. Japan's Nikkei-225 Stock Average closed down -0.01%.
Interest Rates
December 10-year T-notes (ZNZ6) closed down by -7.5 ticks on Tuesday. The 10-year T-note yield rose +1.0 bp to 4.998%. T-notes fell to a new 2.75-year nearest futures low on Tuesday, and the 10-year T-note yield rose to a 19-year high of 5.039%. Tuesday’s +4% surge in WTI crude oil prices to a 3.75-month high pushed inflation expectations higher and undercut T-notes. Also, heightened expectations of a +25 bp interest rate hike by the Fed at the Tue/Wed FOMC meeting are weighing on T-note prices. T-notes held their losses amid weak demand for the Treasury’s $13 billion auction of 20-year T-bonds that had a bid-to-cover ratio of 2.57, below the 10-auction average of 2.62.
European government bond yields moved higher on Tuesday. The 10-year German bund yield climbed to a 17-year high of 3.573% and finished up +2.0 bp to 3.538%. The 10-year UK gilt yield rose +2.1 bp to 5.388%.
The German Sep ZEW survey of expectations of economic growth index rose +0.5 to a 7-month high of 34.7, weaker than expectations of 40.0.
Markets are discounting a 56% chance of a +25 bp ECB rate hike at the ECB’s next meeting on October 29.
US Stock Movers
Cryptocurrency-exposed stocks sold off on Tuesday as Bitcoin (^BTCUSD) fell more than -4% after the Senate blocked a digital asset market structure bill in a procedural vote. Circle Internet Group (CRCL) closed down more than -11%, and Coinbase Global (COIN) closed down more than -10% to lead losers in the S&P 500. Also, Galaxy Digital Holdings (GLXY) closed down more than -8%, and Riot Platforms (RIOT) closed down more than -6%. In addition, Strategy (MSTR) closed down more than -5%, Iren Ltd (IREN) closed down more than -4%, and MARA Holdings (MARA), Robinhood Markets (HOOD) closed down more than -3%.
Software stocks retreated on Tuesday, giving back some of Monday’s gains. Oracle (ORCL) and Thomson Reuters (TRI) closed down more than -3%, and Intuit (INTU) and Adobe Systems (ADBE) closed down more than -2%. Also, Atlassian Corp (TEAM),Microsoft (MSFT), Salesforce (CRM), ServiceNow (NOW), and Workday (WDAY) closed down more than -1%.
Airlines and cruise line operators fell on Tuesday after crude prices jumped more than +4%, raising fuel costs and weighing on profitability prospects. American Airlines Group (AAL), Royal Caribbean Cruises (RCL), and Norwegian Cruise Line Holdings (NCLH) closed down more than -2%. Also, United Airlines Holdings (UAL), Alaska Air Group (ALK), Delta Air Lines (DAL), and Carnival (CCL) closed down more than -1%.
Some chipmakers and AI stocks moved higher on Tuesday, limiting losses in the broader market. The iShares Semiconductor ETF (SOXX) closed up +0.40%. Qualcomm (QCOM) closed up more than +4% to lead gainers in the Nasdaq 100. Also, Advanced Micro Devices (AMD) and ON Semiconductor (ON) closed up more than +2%, and ARM Holdings Plc (ARM), Marvell Technology (MRVL), and ASML Holding NV (ASML) closed up more than +1%. In addition, NXP Semiconductors NV (NXPI) closed up +0.95%.
Energy stocks and service providers rallied on Tuesday after WTI crude oil rose more than +4%. APA Corp (APA) closed up more than +5%, and ConocoPhillips (COP), Devon Energy (DVN), Phillips 66 (PSX), and Valero Energy (VLO) closed up more than +3%. Also, Diamondback Energy (FANG), Marathon Petroleum (MPC), Occidental Petroleum (OXY), and ExxonMobil Holdings (XOM) closed up more than +2%. In addition, Chevron (CVX) closed up more than +2% to lead gainers in the Dow Jones Industrials.
Enova International (ENVA) closed down more than -23% after withdrawing its application with the Office of the Comptroller of the Currency and the Federal Reserve for the acquisition of Grasshopper Bancorp.
Dave & Buster’s Entertainment (PLAY) closed down -18% after reporting Q2 revenue of $544.1 million, weaker than the consensus of $558.1 million.
Axon Enterprise (AXON) closed down more than -9% to lead losers in the Nasdaq 100 after announcing it intends to offer $1 billion of convertible senior notes due in 2031 in a public offering.
Revvity (RVTY) closed up more than +9% after company executives at a Baird Global Healthcare Conference said demand for its new high-end platform has “really taken off.”
Forgent Power Solutions (FPS) closed up more than +9% after reporting Q4 revenue of 461.7 million, well above the consensus of $432 million.
Waystar Holding Corp (WAY) closed up more than +7% after a Reuters report said the company is exploring options that include a sale.
Earnings Reports (9/16/2026)
Aeluma Inc (ALMU) and Lennar Corp (LEN).
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.