Market Commentary
for the week ending 9/11/2026

Following last week’s Labor Day holiday, equity markets drifted lower throughout the week, marked by “risk-off” sentiment for a variety of reasons. Investors grappled with worsening geopolitical conflict in the Middle East, surging commodity prices, escalated trade war with Canada, rising interest rates, meaningful inflation data, and increased expectations for a Fed rate hike on September 16^th. However, despite all the headwinds, markets posted a broad rally on Friday to offset some of the decline from earlier in the week.

Wall Street faced a tough week, with the major indices sliding for its fourth consecutive sessions on Thursday, Sept.10. Despite posting a stellar corporate earnings season over the past month, last week was overshadowed by worsening macroeconomic pressures. All three of the large-cap U.S. indices were down this week, while the small cap indices declined even further. However, Meta Platforms was a standout, up +6.6% on Wednesday, following the debut of its Muse personal AI agent. Apple also provided a bright spot, jumping 3.6% on Thursday, following the successful launch of its first foldable smartphone. Additionally, markets experienced a broad rebound on Friday, with technology stocks showing the most outperformance.

Geopolitical tensions hit a boiling point as the Iran War escalated sharply. Both the U.S. and Iran traded retaliatory strikes throughout the week. Reports of attacks on energy infrastructure raised immediate fears of major global supply disruptions. Iran shifted to a more aggressive military posture last week, with Iranian leadership believing that now may be the moment to raise the stakes, ahead of November midterms, which could make near-term diplomatic solution more challenging. Additionally, the Iran-backed Houthi rebels in Yemen escalated their conflict with Saudi Arabia last week, which threatened traffic through the Red Sea. This could create another front in the war, along with the Strait of Hormuz, as actions by the Houthis now risk dragging Pakistan into the war.

Consequently, oil prices surged to their highest levels since May, rising for the eighth consecutive day on Thursday, though oil prices dipped slightly lower on Friday. West Texas Intermediate (WTI) crude oil futures rose over 9% just this week and crossed the symbolic $100 per barrel threshold settling just above that price on Friday. The international benchmark, Brent oil, surged to peak at over $109 per barrel, before ending the week at $104.32. Wholesale diesel prices also rose further to a new record high of $6.00/gallon, escalating the cost to transport goods. White House advisors privately warned that the Iran conflict could drag on through 2029, crushing hopes of a swift resolution.

Adding to economic crosscurrents, trade frictions intensified as Canada officially implemented retaliatory tariffs on U.S. imports just after midnight on Tuesday. Trump then announced that the U.S. would implement import bans on Canadian goods including dairy products, alcoholic beverages and motorcycles. These tariffs further complicated the global inflation outlook and dampened manufacturing sentiment.

On Wednesday, Treasury Secretary Scott Bessent announced that the Treasury would repurchase up to $6 billion of its long-term Treasury bonds. This amount was in-line with previous comments from Bessent, but below some Wall Street analysts’ expectations. Markets showed deep skepticism on Bessent’s ability to reverse the recent rise in interest rates with this action.

The combination of spiking oil prices, persistent inflation fears, and increased expectations for a Fed rate hike drove a sell-off in fixed-income markets. As bond prices dipped, the yields on all Treasury notes hit fresh highs for the year. The benchmark 10-year U.S. Treasury yield rose to 4.98%. Meanwhile, the long end of the curve experienced even greater pressure, with the 30-year Treasury yield settling at 5.35%, marking its highest point since 2004. Investors increasingly demanded a higher premium to compensate for the U.S. federal deficit tracking north of $2 trillion and the Federal debt now exceeding $40 trillion. Additionally, U.S. mortgage rates reached as high as 7.0% last week, the highest level in over a year.

Wednesday’s Producer Price Index (PPI) provided this week’s first update on inflation. Headline and core PPI were both about in-line with consensus, however they rose from July to August. The biggest factor in the PPI data was an increase in energy prices in August. Market anxiety intensified ahead of the critical August Consumer Price Index (CPI) report scheduled for release last Friday. Headline CPI came in at 3.4% and Core CPI was at 2.4%, both in-line with the market’s expectations. This report was widely viewed as a key deciding factor in whether the Fed raises rates or remains on hold at next week’s FOMC meeting. The CME FedWatch Tool now suggests that investors are now pricing in an 87% probability that the Federal Reserve will implement a quarter-point interest rate hike at the upcoming FOMC meeting (up from a 59% change 1 week ago).

This week Wall Street will squarely focus its attention on the regularly scheduled Fed meeting which will wrap up with a decision on interest rates that will be announced at midday on Wednesday, September 16^th.

For the week, the Dow was down -1.6% to 53,573, the S&P 500 dipped -0.8% to 7,657, and the Nasdaq composite declined -0.7% to 26,333.

For the second week in a row Crude oil soared much higher up +9.4% to $100.08/barrel, gold declined -1.5% to $4,409/oz. and the yield on the Ten-Year Treasury spiked noticeably higher to 4.98%.

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