Equities logged a fourth straight losing session as a spike in crude oil and decade-high Treasury yields overwhelmed a hot PPI print, leaving the tape de-risked into Friday's CPI.
WTI settled near $102.50, up more than 6% on the day and the highest close since May, as the Iran conflict stretched into its seventh month and pushed Brent above $107. August PPI ran hot at 5.4% year over year versus 5.3% expected, with core producer prices at 4.6%, the highest since June, reinforcing the stagflation narrative already weighing on multiples. The 10-year yield pushed to roughly 4.92%, a ten-year high, squeezing duration-sensitive growth names. The S&P 500 fell 0.58% to 7,591.70, the Nasdaq Composite lost 0.65%, and the Nasdaq 100 underperformed, down 1.3% as semis lagged — Nvidia dropped over 2% and dragged the Dow alongside Honeywell and IBM. Small caps lagged hardest, with the Russell 2000 off more than 1%, while defensives held up as Apple, Coca-Cola and Walmart were among the only large-cap gainers. The VIX jumped over 8% to near 18, signaling real hedging demand rather than a routine pullback.
Into the close there was no meaningful bounce attempt, consistent with dealers running short gamma and amplifying the downside move; without live positioning data tonight, treat the levels below as indicative technical references rather than confirmed dealer marks. Oracle reports after the bell, a bellwether for the AI capex trade, and August CPI lands at 8:30am tomorrow with consensus at 3.4%, the last major print before the Fed's meeting days later.
The risk: a cooler CPI or any retreat in crude below $100 could spark an aggressive short-covering squeeze back toward this week's range. A hot CPI stacked on today's PPI surprise, with oil holding triple digits, raises the odds of a policy-error repricing and a fifth straight down day, pushing yields and the dollar higher while risk assets extend losses.