Relief rally: the S&P snapped three straight down days as Treasury yields finally caught a breather off cycle highs.
The tape traded off the bond desk all session. The 10-year touched 4.818%, the highest print since November 2023, before easing back, and that pause was enough to unlock buyers who'd been sidelined by the yield spike and the Iran escalation. Oil stayed bid on the renewed U.S. strikes, WTI near $91 and Brent near $95.63, but crude no longer sold off equities the way it did Tuesday. Fed speak was constructive at the margin, with commentary framing the September decision as data-dependent rather than a lock, and a soft 38k ADP print added to the case that the labor side is cooling. Dell's guidance raise and Nvidia's reported Hugging Face interest gave tech a bid, while Meta and Wells Fargo led a rotation into banks and cyclicals that showed up in the Dow's outsized 295-point gain.
Breadth confirmed the move rather than a narrow mega-cap squeeze, with nine of eleven S&P sectors higher and roughly 60% of names advancing, even as the Russell lagged on rate sensitivity. Into the close, spot sits back above the session's key indicative pivot, with dealer gamma data unavailable this run — treat the flip and call-wall zones as directional guideposts, not hard walls, given the yield-driven, headline-reactive tape.
The risk: Friday's payrolls print, released into thinned Labor Day liquidity, is the last major data point before the September 15-16 FOMC, and estimates are scattered enough that either a hot or a soft number moves the hike-versus-hold debate hard. A fresh Iran escalation or another leg up in the 10-year through 4.82% flips this right back to sell-the-rip.