Stocks Struggle, Commodities Mixed, and Tariff Battle Intensifies

Image Source : Krish Capital Pty Ltd

Index Update:  U.S. stocks opened September on a weak note, with the Dow down 0.6%, the S&P 500 off 0.7%, and the Nasdaq lower by 0.8%, while the Cboe Volatility Index edged higher. Alphabet shares surged over 5% premarket after a favorable antitrust ruling, boosting tech sentiment, and easing bond pressure supported the market tone. Macy’s topped earnings estimates, sending its stock up more than 11%. Investors now await labor market data from the JOLTS report and the upcoming jobs report.

Market Movers:  On Tuesday, the top gainers were HWH International Inc. (+227.78%), followed by Mineralys Therapeutics, Inc.(+86.43%). On the contrary CleanCore Solutions Inc. (-52.92%), and Laser Photonics Corporation (-37.19%) declined the most the same day.

Commodities Update:  Oil prices pulled back from recent highs as WTI fell to $64.2 and Brent to $67.8 per barrel, driven by signs of higher supply. Reports indicated OPEC+ may raise output at its upcoming meeting, surprising markets that expected no change. This move would continue a series of production hikes aimed at recapturing market share despite weakening demand signals. Additionally, Russian oil exports to China rebounded sharply as India reduced purchases due to U.S. tariffs, while U.S. demand outlook dimmed following weak ISM manufacturing data. Gold held near record highs around $3,530 per ounce, supported by expectations of U.S. monetary easing and rising geopolitical and economic risks. Markets anticipate a potential Fed rate cut after cautious remarks from Chair Powell, with Friday’s jobs report in focus for confirmation. Political tensions, including Trump’s disputes with the Fed and tariff-related uncertainty, along with diversification away from the U.S. dollar and fiscal concerns, have further boosted demand for safe-haven assets like gold.

Macro Updates:  Trump Seeks Supreme Court Review to Uphold Tariffs

President Trump said his administration will request an expedited Supreme Court review to overturn an appeals court ruling that invalidated most of his reciprocal tariffs, citing executive overreach. The tariffs will remain in place until October 14 pending appeal, as Trump warned their removal would cause economic “devastation.”

U.S. Mortgage Applications Decline for Third Straight Week

Mortgage applications dropped 1.2% in the latest week, marking a third consecutive decline despite benchmark mortgage rates falling to a five-month low of 6.64%. Purchase applications slid 1.2% amid weaker consumer sentiment, while refinancing applications rose slightly by 0.9%. Rates remain higher than the 6.43% level seen a year ago.

Bonds Commentary:  The 10-year U.S. Treasury yield climbed above 4.28% for a third straight session as fiscal concerns and heavy corporate bond issuance pressured long-dated debt, steepening the yield curve. While short maturities were supported by Fed rate-cut expectations, selling in longer bonds dominated. Similar trends appeared in Europe amid record bond issuance and pension fund sales. Investors now await U.S. labor market data, including the JOLTS report, Fed Beige Book, and Friday’s key payrolls figures.

Futures Update:  S&P 500 and Nasdaq futures moved higher after a previous session of losses, supported by an antitrust ruling against Alphabet that imposed lighter penalties than expected. Major indexes fell earlier as a sell-off in long-term U.S. government debt fueled concerns about fiscal stability. Investor sentiment was also clouded by uncertainty over U.S. tariffs following a court ruling deeming most of Trump’s import levies illegal, a decision the administration plans to challenge. Additionally, a separate court review is expected regarding Trump’s attempt to dismiss a Federal Reserve Governor.

After initially experiencing a significant decline, stocks recovered some of their losses throughout Tuesday's trading session but remained firmly in negative territory. The S&P 500 declined by 44.72 points, or 0.69%, ending the day at 6,415.53. From a technical perspective, the index found support at previous swing lows and closed near the day's high in the prior session, suggesting the potential for further upward movement in the near term. Additionally, the 14-day RSI is near the midpoint, indicating the possibility of an upward move. Key support levels are identified around 6,366, while resistance is anticipated near 6,510.