Renewed US-Iran strikes over the weekend sent crude sharply higher Monday, reviving inflation fears and pushing the 10-year Treasury yield to its highest since January 2025 as U.S. equities fell.
President Trump posted late Sunday that Iran’s main crude export terminal was “being blown to smithereens.” And Iran’s Revolutionary Guards said Sunday they’d struck U.S. bases in Jordan and the UAE in retaliation.
West Texas Intermediate crude jumped 2.5% to $85.49 a barrel, while Brent added 2.7% to $90.47 — feeding straight into the rates market.
The 10-year Treasury yield rose 5 basis points to 4.76%, a fourth consecutive advance and the highest since January 2025. The 30-year climbed 6 basis points to 5.26%, while the 2-year eased 1 basis point to 4.34%.
Traders now assign roughly a 64% probability to a 25-basis-point rate hike at the Sept. 16 Federal Reserve meeting, up from about 40% a week ago.
Fed Chair Kevin Warsh‘s Jackson Hole remarks on Friday, warning the central bank would “have work to do” absent progress toward the 2% target, did the initial damage.
The S&P 500 slipped 0.5% to 7,677, while the Dow Jones Industrial Average shed 336 points, or 0.6%, to 53,224. Chevron Corp. (NYSE:CVX) led the blue chips higher with a 2.8% gain.
The Nasdaq 100 fell 0.6% to 29,269. The Russell 2000 underperformed, down 0.9% to 2,947.
Gold eased 0.4% to $4,437 an ounce, still up 9.4% over the past month but 4.6% below last week’s level. Bitcoin (CRYPTO: BTC) bucked the risk-off tone and gained 1.4% to $78,800.
Monday’s Performance In Major US Indices
| Index | Last | % Change | YTD |
|---|---|---|---|
| S&P 500 | 7,677.06 | -0.5% | +12.5% |
| Dow Jones | 53,224.45 | -0.6% | +11.3% |
| Nasdaq 100 | 29,269.43 | -0.6% | +16.1% |
| Russell 2000 | 2,946.90 | -0.9% | +19.0% |
According to the Benzinga Pro platform:
- The Vanguard S&P 500 ETF (NYSE:VOO) fell 0.5%.
- The SPDR Dow Jones Industrial Average ETF Trust (NYSE:DIA) slid 0.7%.
- The Invesco QQQ Trust (NASDAQ:QQQ) eased 0.3%.
- The iShares Russell 2000 ETF (NYSE:IWM) dropped 0.9%.
Sacramento Torches California Utilities; Oil Names Ride The Crude Rally
The Energy Select Sector SPDR Fund (NYSE:XLE) was the only S&P 500 sector in positive territory, up 0.8%. The Utilities Select Sector SPDR Fund (NYSE:XLU) was the worst performer, down 1.2%, followed by the Industrials Select Sector SPDR Fund (NYSE:XLI) at -1.2%, the Real Estate Select Sector SPDR Fund (NYSE:XLRE) at -1.1% and the Communication Services Select Sector SPDR Fund (NYSE:XLC), also down 1.1%. The Technology Select Sector SPDR Fund (NYSE:XLK) was effectively flat.
Among industry funds, the VanEck Oil Services ETF (NYSE:OIH) led with a 1.1% gain and the SPDR S&P Oil & Gas Exploration & Production ETF (NYSE:XOP) added 0.3%.
Fuel buyers and rate-sensitive corners were hit hardest: the U.S. Global Jets ETF (NYSE:JETS) tumbled 2.1% on the jet fuel bill, the Invesco Solar ETF (NYSE:TAN) lost 2.0%, the VanEck Gold Miners ETF (NYSE:GDX) fell 1.5% alongside bullion and the iShares U.S. Home Construction ETF (BATS:ITB) dropped 1.3% as long yields climbed.
Major Moves Out of Sacramento…
Edison International (NYSE:EIX) collapsed 23.1% – its steepest one-day decline since 2001 – after California lawmakers introduced a wildfire response bill on Saturday that does not shift liability away from investor-owned utilities, having already rejected a proposal to phase out insurer subrogation rights ahead of Monday’s legislative deadline.
Mizuho cut Edison to Neutral from Outperform and slashed its price target to $70 from $86, while Barclays moved to Equal Weight with a $75 target.
PG&E Corp. (NYSE:PCG) plunged 18.6% on the same catalyst after SB 492 was amended to strip out the utility liability protections, adding to a 7.5% drop on Friday. BMO Capital downgraded PG&E to Market Perform from Outperform and cut its target to $21 from $28. Sempra (NYSE:SRE) was also caught in the downgrade wave, with Mizuho moving to Neutral and taking its target to $84 from $104.
Howmet Aerospace Inc. (NYSE:HWM) sank 8.7% after SpaceX confirmed it will cast gas-turbine hot-section blades and vanes in-house at a new foundry in Bastrop, Texas – a direct disintermediation risk for a company holding more than half the global turbine blade market, and one whose industrial gas turbine exposure had been central to the bull case.
Aon plc (NYSE:AON) fell 7.4% after agreeing to acquire insurance broker USI from KKR and other shareholders for $17 billion.
Elsewhere, Take-Two Interactive Software Inc. (NASDAQ:TTWO) dropped 6.5% as Grand Theft Auto VI footage leaks continued to spread ahead of the Nov. 19 launch.
On the Upside
Ascendis Pharma A/S (NASDAQ:ASND) rallied 6.1% after signing a binding term sheet with BioMarin for a global settlement and license agreement covering YUVIWEL (navepegritide).
Roblox Corp. (NYSE:RBLX) climbed 6.0% after Citi flagged third-party RoMonitor tracking data showing quarter-to-date engagement trends implying Q3 bookings of roughly $1.68 billion, above the company’s $1.57-$1.65 billion guidance range and consensus near $1.61 billion.
Within tech, Tesla Inc. (NASDAQ:TSLA) was the standout, rallying 5.1% following confirmation that Optimus has entered production at Fremont on converted Model S and Model X lines, the announcement of a Semi rollout event on Sept. 24 at its Sparks, Nevada plant, and the launch of a lower-priced rear-wheel-drive Model 3 in Hong Kong at roughly $26,000.
Monday’s Russell 1000 Top Gainers
| Name | % change |
|---|---|
| Ascendis Pharma A/S | +6.13% |
| Roblox Corporation | +5.98% |
| X-Energy, Inc. | +5.98% |
| Tesla, Inc. | +5.13% |
| CNH Industrial N.V. (NYSE:CNH) | +4.41% |
Monday’s Russell 1000 Top Losers
| Name | % change |
|---|---|
| Edison International | -23.13% |
| PG&E Corporation | -18.64% |
| Howmet Aerospace Inc. | -8.73% |
| Karman Holdings Inc. | -7.48% |
| Aon plc | -7.36% |
Image: Shutterstock
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