US Stock Market Wrap: AI supports the week as the market ends higher, but the 5% US Treasury yield is becoming an “invisible ceiling”
On September 25, the three major US stock indexes traded sideways and closed higher. The Dow ended a three-day losing streak, while the S&P 500 and Nasdaq rose for the week, and the Philadelphia Semiconductor Index extended a four-session weekly advance.
Consumer confidence fell to 48.1, a four-month low, but one-year inflation expectations jumped to 4.6%. At one point, market-implied odds of the Fed raising rates in October rose to 70%.
Asset impact:
The 10-year US Treasury yield once again broke above 5.22% intraday, reaching the highest level since 2007. For the week, Treasuries posted their worst performance in 19 months. Under the pressure of high interest rates, gold fell more than 2% for the week, though it rebounded 0.54% on Friday.
Crude oil was hit by news of technical negotiations between the US and Iran. US crude dropped more than 3% at one point and ended the week down nearly 4%, recording the largest weekly decline in seven weeks. The Japanese yen surged as much as 1.2%. Japanese and US officials jointly—and unusually—released a “weak yen is a problem” signal.
Key issue:
The AI boom is still propping up US stocks—Meta surged 13% this week, while ARM, AMD, and Intel all gained more than 10% over the week. But long-term Treasury yields above 5% are continuing to raise the valuation hurdle for risk assets. AI optimism and the drag from rising rates are creating a tug-of-war.$CL $XAU $SOXL
On September 25, the three major US stock indexes traded sideways and closed higher. The Dow ended a three-day losing streak, while the S&P 500 and Nasdaq rose for the week, and the Philadelphia Semiconductor Index extended a four-session weekly advance.
Consumer confidence fell to 48.1, a four-month low, but one-year inflation expectations jumped to 4.6%. At one point, market-implied odds of the Fed raising rates in October rose to 70%.
Asset impact:
The 10-year US Treasury yield once again broke above 5.22% intraday, reaching the highest level since 2007. For the week, Treasuries posted their worst performance in 19 months. Under the pressure of high interest rates, gold fell more than 2% for the week, though it rebounded 0.54% on Friday.
Crude oil was hit by news of technical negotiations between the US and Iran. US crude dropped more than 3% at one point and ended the week down nearly 4%, recording the largest weekly decline in seven weeks. The Japanese yen surged as much as 1.2%. Japanese and US officials jointly—and unusually—released a “weak yen is a problem” signal.
Key issue:
The AI boom is still propping up US stocks—Meta surged 13% this week, while ARM, AMD, and Intel all gained more than 10% over the week. But long-term Treasury yields above 5% are continuing to raise the valuation hurdle for risk assets. AI optimism and the drag from rising rates are creating a tug-of-war.$CL $XAU $SOXL
