Stocks Fall on Rising Yields and Oil, With Apple the Lone Bright Spot
Key Points
The Nasdaq Composite fell 0.56%, the Dow slipped 0.39%, and the S&P 500 dropped 0.35% to open September.
The 10-year Treasury yield reached about 4.8%, its highest level since January 2025, as oil climbed for a fifth straight session.
Friday's August jobs report is the next major test for a market already bracing for higher rates.
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On the first trading day of September, Apple (NASDAQ: AAPL) jumped 3% and the major indexes fell anyway. This morning's market action was driven more by macroeconomics than by specific stocks.
The Nasdaq Composite (NASDAQINDEX: ^IXIC) index is down 0.56% as of noon ET. The Dow Jones Industrial Average (DJINDICES: ^DJI) has slipped 0.39%, and the S&P 500 (SNPINDEX: ^GSPC) is off by 0.35%. Twenty of the Dow's 30 components are lower right now.
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Apple's new CEO is off to a good start, but Wall Street is busy with macro concerns
Let's start with the bright spot. Today is Apple's first day under new CEO John Ternus, as Tim Cook's retirement from the iPhone maker's top post took effect. Executive turnover can be scary, especially after a tenure as impressive as Cook's, but Apple investors see continuity in this shift. Ternus has been a longtime hardware engineering chief, working at Apple since 2001. That's good for a 3% pop in Apple's share price today.
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Beyond that, I don't have much good news. Apple didn't carry the tech sector into positive territory; software giants Microsoft (NASDAQ: MSFT) and Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) both fell more than 1%. Oil prices are up again as the conflict in Iran intensifies.
Higher oil feeds inflation, inflation boosts Treasury yields, and high yields are poison for expensive growth stocks. The 10-year Treasury yield hit about 4.8% this morning, its highest since January 2025, as a fifth straight session of rising oil prices stoked inflation concerns.
That's why the S&P 500 and Nasdaq are slipping on Tuesday. The biggest price drops today aren't found among the Magnificent 7, but in high-priced cybersecurity and networking names further down the list. For instance, Palo Alto Networks (NASDAQ: PANW) is down 6% and Lumentum Holdings (NASDAQ: LITE) fell 5.3%.
The Fed backdrop didn't help, either. Governor Michael Barr said Tuesday that he would support a rate hike if inflation doesn't ease convincingly, following Fed Chair Kevin Warsh's hawkish remarks at Jackson Hole on Friday. Traders now put the odds of a September hike above 65%, up from about a third before Warsh spoke last week.
All eyes on Friday's jobs report
The third earnings season of 2026 is over and Wall Street's focus shifts back to macroeconomics. Bond prices, jobs reports, the global oil supply, and inflation trends are likely to drive the market action until the middle of October, when the next earnings season kicks off.
Apple's 3% gain would normally lift the indexes, but that wasn't in the cards today. Instead, rising yields and higher oil prices pulled them down. Friday's August jobs report is the next major input. Weak numbers could make a rate hike less likely even amid rising inflation.
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Anders Bylund has positions in Alphabet. The Motley Fool has positions in and recommends Alphabet, Apple, Lumentum, and Microsoft. The Motley Fool recommends Palo Alto Networks. The Motley Fool has a disclosure policy.
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