Crude oil surge and high interest rates pressure US stocks, but market recovers late on reports of US-Iran talks

US 10-year Treasury yield surges to 5.1%—rate hike concerns fueled by high oil prices and strong economic indicators

Market structure where high oil prices and rising interest rates erode P/E ratios—the tug-of-war between AI-related stock strength and P/E compression

Summary of US stock market trends and key points

1. Movement of major indices

• S&P 500 / Nasdaq: Fell early on due to high oil prices and rising interest rates, but saw buying late in the session to finish nearly flat (S&P 500: -0.02%, Nasdaq: +0.01%).

• VIX (Volatility Index): Rose about 3% to the “15” level. Market caution increased despite stock prices remaining flat.

• USD/JPY: Around 158 yen (dollar strengthening and yen weakening).

2. Interest rates and crude oil (the two major factors that moved the market)

3. Macroeconomic indicators and Fed rate hike expectations

• Strong economic indicators (the “good news is bad news” structure suggesting reignited inflation and continued rate hikes)

  • Initial jobless claims: 190,000 (-1,000 from the previous week, below the expected 200,000 and near a 57-year low).

  • August new home sales: +6.4% month-on-month (680,000 units annualized, an 8-month high).

• Rate hike expectations: The probability of an additional rate hike of 25bp or more at the October FOMC meeting has risen to nearly 70%.

4. Internal stock market environment (tug-of-war between stock prices and valuations)

Key points to watch and market turning points

1. Release of economic indicators

   • US durable goods orders: A strong result poses a risk of further pushing up interest rates and rate-hike expectations.

   • University of Michigan Consumer Sentiment Index (final): Watch closely to see if inflation expectations (preliminary reading of 4.6%) rise further.

2. Middle East situation and crude oil prices

   • The future of US-Iran negotiations: If negotiations progress, crude oil will plummet, leading to a retreat in interest rate and inflation concerns. If they break down and attacks continue, high crude oil and high interest rates will weigh on stock prices.

3. Key levels for long-term interest rates

#USDJPY#Stocks#RateHike#Inflation#Yield#Iran#Nasdaq#StockPrice#InterestRate#CrudeOil