Market Summary
U.S. equities sold off broadly on Tuesday, September 1, as a sharp escalation in the U.S.-Iran conflict combined with a global surge in bond yields to spark a rotation out of growth and cyclical names and into defensive sectors. The S&P 500 fell 54.67 points (-0.71%) to 7631.47, the Dow Jones Industrial Average dropped 419.02 points (-0.79%) to 52766.88, and the Nasdaq Composite lost 271.11 points (-1.03%) to 26120.83. Small- and mid-caps underperformed as well, with the Russell 2000 down roughly 1.2% and the S&P Mid Cap 400 off about 1.1%.
The session’s dominant catalyst was crude oil, which extended an overnight rally into a full-blown surge after U.S. Central Command confirmed midday that American forces had struck Islamic Revolutionary Guard Corps targets inside Iran, in retaliation for attacks on shipping in the Strait of Hormuz and on U.S. personnel. President Trump described the strikes as “large and powerful” and threatened even harsher retaliation, while Iran’s IRGC vowed a “severe punishment” for the U.S. WTI crude settled up $4.45 (+5.2%) at $90.28/bbl, erasing an early-session bounce attempt in equities and Treasuries alike.
Rising sovereign bond yields compounded the pressure on risk assets. The 10-year Treasury yield rose 4 bps to 4.80% — its highest level since January 2025 — while yields in Japan, the U.K., and Germany also hit multi-year or multi-decade highs. Technology and consumer discretionary shares bore the brunt of the selling, while energy, utilities, health care, and consumer staples benefited from a classic defensive rotation. Apple was a notable outlier to the upside as John Ternus formally began his tenure as CEO. The session set a cautious tone for what is historically one of the market’s weakest months.
Market Snapshot
| Index | Level | Change | % Change |
|—|—|—|—|
| Dow Jones Industrial Average | 52,766.88 | -419.02 | -0.79% |
| S&P 500 | 7,631.47 | -54.67 | -0.71% |
| Nasdaq Composite | 26,120.83 | -271.11 | -1.03% |
Breadth (NYSE): Advancers 823, Decliners 1,921, Volume 1.17 bln shares
Breadth (Nasdaq): Advancers 1,265, Decliners 3,678, Volume 6.77 bln shares
WaveFinder Breadth Metrics:
- Primary Sentiment: Bullish (Bulls 1,006 / Bears 876)
- 4% Sentiment: Bearish (Bulls 75 / Bears 254)
- 40 SMA Sentiment: Bearish
- % of Stocks Above 20-day SMA: 7%
- % of Stocks Above 40-day SMA: 38.5%
- 9-Month Bulls: 8 | Bears: 22 (0% Bull Follow-Through)
YTD Performance: Russell 2000 +17.7%, S&P Mid Cap 400 +12.6%, Nasdaq Composite +12.3%, S&P 500 +11.5%
Sector Performance
1. Energy +1.5% — Surging oil prices on Iran conflict escalation (ATR 3.51%, P95, falling)
2. Utilities +0.7% — Defensive rotation; EIX/PCG strength on California wildfire liability news (ATR -2.36%, P16, falling)
3. Health Care +0.6% — Defensive bid; boosted by NVS, MRNA moves (ATR 1.99%, P0, falling)
4. Consumer Staples +0.2% — Defensive rotation (ATR 1.00%, P95, flat)
5. Financials -0.9% (ATR -0.31%, P0, flat)
6. Information Technology -1.0% — Semis and software under pressure; PHLX Semiconductor Index -2.1%, iShares Expanded Tech-Software ETF -3.5% (ATR -1.59%, P0, flat)
7. Industrials -1.4% — Pressured by oil surge; AXON worst S&P 500 performer (ATR -1.66%, P0, falling)
8. Materials -1.4% (ATR 0.51%, P0, falling)
9. Communication Services — Listed among weak sectors (specific % not disclosed) (ATR 2.20%, P58, flat)
10. Consumer Discretionary -1.9% — Bottom sector; AMZN, TSLA lag; Vanguard Mega Cap Growth ETF -1.0% (ATR -0.64%, P0, falling)
11. Real Estate — Performance not disclosed (ATR -1.73%, P0, falling)
Key Earnings & Movers
- Apple (AAPL) $325.13, +8.28 (+2.61%) — Rallied as John Ternus officially took over as CEO
- Dell (DELL) $424.82, -31.18 (-6.84%) — Sold off ahead of Q2 report amid elevated expectations; after-hours headline indicates shares moved “sharply higher on another blowout quarter”
- Palo Alto Networks (PANW) $362.09, -20.04 (-5.24%) — Weak ahead of fiscal Q4 report
- Amazon (AMZN) $254.92, -4.85 (-1.87%) — Mega-cap discretionary laggard
- Tesla (TSLA) $356.09, -11.86 (-3.22%) — Mega-cap discretionary laggard
- Axon (AXON) $518.30, -48.26 (-8.52%) — Worst-performing S&P 500 component
- Edison International (EIX) $58.79, +4.81 (+8.91%) — California Assembly reportedly to kill wildfire liability plan
- PG&E (PCG) $14.06, +0.78 (+5.92%) — Same wildfire liability catalyst
- Moderna (MRNA) $154.27, +13.93 (+9.93%) — Continued volatility following recent melanoma-vaccine data surge
- Novartis (NVS) $160.43 — Rallied on positive Phase III REMODEL trial results for MS drug remibrutinib
- Yext (YEXT) +1% (pared from bigger gap-up) — Q2 EPS beat, revenue -1.8% yr/yr to $111.1 mln; adjusted EBITDA +29% yr/yr to $34 mln, margin expanded to 31% from 23%
- NVIDIA (NVDA) — Down ~1.6% in premarket trading on higher rates, despite report of $35 bln Anthropic-Lambda cloud deal
Stock Spotlight
Novartis (NVS) was among the day’s most significant movers after remibrutinib met the primary endpoint in both Phase III REMODEL-1 and REMODEL-2 trials, significantly reducing annualized relapse rates versus teriflunomide in relapsing multiple sclerosis while also demonstrating superiority across key secondary endpoints, including inflammatory MRI lesion counts. The two identically designed, randomized, double-blind trials involved approximately 2,000 adults and provide stronger regulatory evidence than a single pivotal study. The drug was well tolerated, with no liver safety signal and no cases meeting Hy’s Law criteria — a notable positive given liver-toxicity concerns associated with the BTK-inhibitor class.
However, the disability-progression data were more nuanced: the three-month confirmed disability-progression endpoint did not reach statistical significance, while the six-month result achieved only nominal significance through a preplanned pooled analysis. Full results will be presented at MSToronto 2026 (October 21-23), where investors will get the absolute relapse rates, MRI lesion data, and complete safety tables needed to assess remibrutinib’s competitive positioning against anti-CD20 therapies and other BTK inhibitors. Shares traded at $160.43, above their 50- and 200-day moving averages but below the 52-week high of $170.46.
Bond Market & Treasuries
Treasury yields rose across the curve to fresh highs for the year, pressured by the oil spike and geopolitical escalation. An early rally attempt reversed as crude oil extended gains through the afternoon.
Yield Changes:
- 2-year: +4 bps to 4.39%
- 3-year: +5 bps to 4.46%
- 5-year: +5 bps to 4.56%
- 10-year: +4 bps to 4.80% (highest since January 2025, up 63 bps YTD)
- 30-year: +2 bps to 5.27%
The U.S. Dollar Index climbed 0.3% to 99.70. Globally, Japan’s 10-year JGB yield approached 3.00% for the first time since 1996; the U.K. 10-year gilt yield hit 5.14%, its highest since 2008; and the German 10-year bund yield reached 3.36%, its highest since 2011. The Atlanta Fed’s GDPNow forecast for Q3 GDP rose to 4.8% from 4.6% previously. The House of Representatives passed a bill extending government funding to December 11 from September 30. ECB policymaker Rehn warned the Iran conflict could keep inflation elevated, while Treasury Secretary Bessent reportedly told Japanese officials more BoJ rate hikes are needed.
Commodities
- WTI Crude Oil: Settled at $90.28/bbl, +$4.45 (+5.2%) — surged intraday on confirmed U.S. strikes against Iran, after trading at $87.72 (+2.3%) earlier in the morning session
- Brent Crude: $92.04/bbl, +1.7% (morning reading)
- Gold, Silver, Copper: No data provided in source materials
Overseas Markets
Asia:
- China’s RatingDog Manufacturing PMI: 51.5 (August), beating expectations of 51.0, continued expansion despite contraction in official readings
- Japan: Q2 Capital Spending +1.6% yr/yr (vs. -0.2% expected); August Manufacturing PMI 54.9; August Household Confidence rose to 35.5 from 34.9; 10-yr JGB yield near 3.00%, highest since 1996
- South Korea: August trade surplus $34.75 bln (vs. $30.70 bln expected); exports +68.7% yr/yr; August Manufacturing PMI 52.3
- Australia: August Manufacturing PMI 52.0 (as expected); Q2 Current Account deficit AUD27.2 bln; July Building Approvals -3.6% m/m
- India: August Manufacturing PMI 52.8
Europe:
- Eurozone: August Manufacturing PMI 52.7 (vs. 52.8 expected); Flash August CPI +3.3% yr/yr (as expected); Core CPI +2.4% yr/yr; unemployment steady at 6.4%
- Germany: August Manufacturing PMI 54.3 (vs. 54.1 expected); July Retail Sales -3.4% m/m; 10-yr bund yield 3.36%, highest since 2011
- U.K.: 10-yr gilt yield 5.14%, highest since 2008; August Manufacturing PMI 51.7; Nationwide HPI +0.2% m/m
- France: August Manufacturing PMI 51.1
- Italy: August Manufacturing PMI 49.6 (contraction); Q2 GDP +0.2% qtr/qtr
- Spain: August Manufacturing PMI 49.5 (contraction)
- Switzerland: August Manufacturing PMI 57.1, well above 54.1 expected
Economic Data
- ISM Manufacturing Index (August): 54.6%, down from 55.6% in July and below the 55.3% consensus — signals expansion but at a slower pace; prices paid component held steady while most other categories showed slower growth
- Construction Spending (July): -0.5% m/m, below the +0.2% consensus, following an upwardly revised unchanged reading for June (from -0.1%)
- S&P Global U.S. Manufacturing PMI (final, August): Release scheduled; prior reading was 53.2 (result not specified in available data)
- JOLTS Job Openings (July): Scheduled for release; consensus 7.390 million vs. prior 7.359 million (result not specified in available data)
Looking Ahead
- Dell (DELL) reported Q2 results after the close; early headline indicates a “blowout quarter” with shares reacting sharply higher in after-hours trading
- Palo Alto Networks (PANW) fiscal Q4 results due after the close
- Markets will continue monitoring the U.S.-Iran conflict for signs of further escalation or de-escalation, with President Trump warning of potentially larger strikes and Iran threatening retaliation
- Elevated attention on Treasury yields and global bond markets amid inflation concerns tied to rising oil prices
- Increased market expectations for a rate hike at this month’s FOMC meeting remain a key focus heading into subsequent sessions
- Historical seasonality note: September has historically been the weakest month of the year for the stock market