Tape's ugly again: oil up, yields up, tech down, and the Fed narrative just flipped from cuts to hikes.
Tuesday closed with the S&P off roughly 0.7%, the Dow down about 0.8%, and the Nasdaq Composite down more than 1% as Nasdaq 100 losses near 2% dragged QQQ into the low-700s and SPY back toward the 762-763 area. Chip and photonics names led the damage while construction spending data reinforced a soft-growth read. VIX sits mid-teens near 16, still calm relative to the headline flow, which is itself a tell that vol sellers haven't capitulated yet. Overnight, two supertankers were struck transiting the Strait of Hormuz with no group claiming responsibility, keeping WTI near 88-89 and Brent near 92-93 and putting a fresh war-risk premium under crude and breakevens just as hawkish Fed commentary lifts September rate-hike odds instead of the cuts the market spent August pricing.
Today's calendar is the first real test: ADP private payrolls at 8:15 as the appetizer for Friday's NFP, July factory orders and final durable goods at 10, the Fed Beige Book at 2, plus a Bank of Canada decision. Broadcom, Snowflake, HPE, NetApp and Five Below report, offering a cleaner read on AI capex and enterprise software demand than the index tape has given lately. Priced in: a soft ADP print feeds the stagflation narrative; a hot one hardens the hike bet and pressures duration-sensitive growth further.
The risk: another tanker or Strait headline, or a Beige Book flagging cost pass-through, forces a real repricing toward a September hike rather than a cut. Oil, yields and a hawkish Fed moving together is the one combination that breaks this low-vol equity regime and triggers actual de-grossing.