Oil Breaks $100 as Rate-Hike Fears Extend Wall Street Losing Streak

The major averages extended their losing streak to three sessions on Thursday as another surge in crude oil, rising Treasury yields, and mounting expectations for a Federal Reserve rate hike continued to weigh on equities. The S&P 500 declined 0.6%, the Nasdaq Composite fell 0.7%, and the Dow Jones Industrial Average lost 0.6%. Weakness was more pronounced among smaller companies, with the Russell 2000 down 1.0% and the S&P MidCap 400 falling 0.9%.

Crude oil remained at the center of the market’s concerns as an off-ramp to the U.S.-Iran conflict remained elusive. WTI futures surged $6.32, or 6.6%, to settle at $102.30 per barrel, pushing above the psychologically important $100 threshold and bringing the commodity’s gain for the holiday-shortened week to roughly 11.5%.

The latest advance compounded the oil-driven pressure that has weighed on equities throughout the week. With crude now firmly above $100, investors faced renewed concerns about the potential inflationary consequences of higher energy costs and their implications for economic growth and monetary policy.

Treasury yields presented another significant obstacle. The 10-year Treasury yield jumped 11 basis points to 4.94%, intensifying valuation pressure on growth stocks and other rate-sensitive areas of the market.

Expectations for tighter monetary policy also increased following Thursday morning’s August Producer Price Index. Headline PPI rose 0.4% month over month, matching the Briefing.com consensus, while core PPI increased a slightly cooler-than-expected 0.2%, compared with expectations for a 0.3% gain.

The details nevertheless reinforced the market’s hawkish interpretation of the inflation outlook. Upward revisions to the July readings and an acceleration in year-over-year producer inflation strengthened expectations that the Fed could raise rates at next week’s FOMC meeting. The CME FedWatch Tool placed the probability of a rate hike at 73.1% following the report, up sharply from 61.2% on Wednesday.

Selling pressure remained widespread through the closing bell, with nine of the 11 S&P 500 sectors finishing lower. Materials (-1.5%) ended at the bottom of the sector standings amid falling precious-metal prices and particularly pronounced weakness in copper.

Information technology (-0.9%) also had an outsized influence on the major averages. Semiconductor stocks, which had provided an important source of relative strength during the first two sessions of the week, reversed course sharply. The PHLX Semiconductor Index dropped 2.7%.

NVIDIA (NVDA 218.40, -5.27, -2.36%) was among the notable mega-cap laggards. Taiwan Semiconductor Manufacturing (TSM 428.31, -7.05, -1.62%) also declined despite reporting a 53.3% year-over-year increase in August revenue to NT$514.81 billion, with investors taking some profits following the stock’s strong recent run.

Skyworks Solutions (SWKS 84.03, +7.49, +9.79%) and Qorvo (QRVO 112.36, +7.12, +6.77%) bucked the broader semiconductor weakness. Both stocks rallied amid increased investor optimism that their proposed merger will ultimately receive approval and close.

Earnings-related selling created additional pressure in several individual stocks. CooperCompanies (COO 54.17, -9.31, -14.67%) plunged following a third-quarter revenue miss and downside fourth-quarter guidance that highlighted a steeper near-term slowdown at CooperVision.

American Eagle Outfitters (AEO 14.54, -2.35, -13.91%) was another pronounced laggard following its quarterly results. Continued softness at the American Eagle brand and a modest reduction to expectations for second-half operating income overshadowed strength at Aerie, while several other apparel stocks traded lower in sympathy.

There were some pockets of resilience outside technology. Reddit (RDDT 155.36, +8.92, +6.09%) ranked among the stronger S&P 500 performers, while Comcast (CMCSA 25.17, +0.58, +2.36%) and Charter Communications rebounded from Wednesday’s declines.

Both cable stocks had come under substantial pressure in the previous session after Comcast highlighted heightened “competitive intensity” during remarks at the Goldman Sachs Communacopia + Technology Conference. Their rebound helped communication services finish 0.3% higher, making it one of only two S&P 500 sectors to advance. Consumer staples (+0.2%) also posted a modest gain.

Attention now turns to two potentially significant catalysts for a market already confronting elevated volatility. Oracle (ORCL 153.17, -8.46, -5.23%) reports earnings after Thursday’s close with expectations elevated around its rapidly expanding AI infrastructure business and massive data-center buildout. Investors will be looking for continued cloud acceleration as new capacity comes online, along with evidence that the company’s heavy infrastructure investment remains on track.

The more consequential catalyst arrives Friday morning with the August Consumer Price Index. Consensus expectations call for a 0.4% monthly increase in headline CPI, and the report could play a decisive role in shaping expectations for next week’s FOMC decision.

After three consecutive losing sessions, the market enters Friday facing an increasingly difficult combination of risks. WTI crude has broken above $100, the 10-year Treasury yield is approaching 5%, and markets are now assigning more than a 70% probability to another rate increase. Against that backdrop, the CPI report has the potential to either reinforce the recent hawkish repricing or provide badly needed relief to equities heading into next week’s Federal Reserve meeting.

Our FTinvest 11 model portfolio rebounded 0.60% to close at 945.01, recovering a small portion of Wednesday’s sharp 5.83% decline. Despite today’s stabilization, the portfolio remains firmly in correction territory, trading approximately 13.8% below its all-time closing high of 1,096.33. The index also remains well below the 1,000 level following the significant deterioration experienced over recent weeks.

FTinvest 11 is now up approximately +1.81% year-to-date, improving modestly from +1.21% in the previous session. Today’s rebound provides some relief following the severe selloff, but it recovers only a small fraction of the losses accumulated during the recent downturn. With the portfolio still substantially below its July peak and only modestly positive for 2026, the latest move represents an initial stabilization rather than a meaningful reversal of the recent weakness.