S&P 500 traders are a bit sour this morning, as the markets are trying to get a handle on higher interest rates and the overall uncertainty around the world at the moment.
S&P 500
The S&P 500 has a little bit of negativity to it on Tuesday as Americans came back to work from the Labor Day holiday.
The sell-off isn't necessarily disorderly, so it's not necessarily a concerning move, but volatility has picked up. The VIX is around 15.3, which is a 5.6% gain, reflecting increased hedging demand rather than outright panic.
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Some of the things that are moving the S&P 500 would, of course, be the inflation shock via oil and the renewed US-Iranian tension in the Middle East.
Treasury yields remain restrictive
Treasury yields remain restrictive, with the 10-year around 4.79%, maintaining pressure on equity valuations for traders to worry about. With this, a lot of firms may be hesitant to get overly aggressive.
Fed rate hike risk has increased, as markets are pricing in roughly a 58% probability of a September rate hike after strong US unemployment and the renewed energy price surge.
Keep in mind that there are some movers out there that are dragging the market down. For example, Amgen is a big loser, down about 8%.
While Intel is up about 5%, QCOM is up 4%, and energy shares are all benefiting from the crude rally.
Breadth is negative, and this is not nearly just a handful of stocks dragging the index lower.
The market has several catalysts coming up as well, including PPI on Thursday, CPI on Friday, and the Fed decision on the 16th.
Rising oil and inflation expectations continue to be the main issue here, and with that being the case, I'm watching this market for a little bit of negativity, but I think it's more or less along the lines of a wiggle and not some type of major change.
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