As of today, the S&P 500 Index is down 0.25%, with the Dow Jones Industrial Average declining 0.69% to a 5-week low, while the Nasdaq 100 Index is up by 0.12%. The broader market is under pressure due to rising inflation risks, amplified by WTI crude oil prices surging over 2% to a 3.25-month high. This spike is driven by escalating conflicts in the Middle East, raising concerns over energy flows and pushing the 10-year T-note yield to 4.82%, the highest in 2.75 years.
The recent trade tensions between the U.S. and Canada are also contributing to market sentiment changes. Canada has imposed tariffs of 15% to 50% on various U.S. goods, prompting retaliatory measures from the U.S. that include blocking imports of certain Canadian products and additional tariffs. In mortgage news, U.S. MBA applications fell by 2.7% in the week ending September 4, with the average 30-year fixed-rate mortgage at a 14-month high of 6.85%.
In stock movements, health insurance stocks like UnitedHealth Group dropped over 5%, while chipmakers such as Marvell Technology saw gains of over 5%. Energy and service providers are benefiting from rising crude oil prices, which are boosting inflation expectations. Markets currently reflect a 64% chance of a 25 basis point rate hike at the next FOMC meeting on September 15-16.
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