The S&P 500 fell 44.66 points (−0.58%) to close at 7,591.70 on Thursday, marking its fourth consecutive daily decline. It’s the longest losing streak since early March.

The selloff was driven by surging oil prices, a hot PPI report, and a weak 30-year Treasury auction that sent the 10-year yield to 4.95%. Tessoron examines the cross-asset dynamics weighing on US equities.

The Dow Jones Industrial Average fell 316 points (−0.60%) to 52,064, the Nasdaq Composite dropped 0.65% to 26,082, and the Russell 2000 lost 1.04% to 2,891. The S&P 500 has now shed approximately 2% over four trading sessions. 

Despite the decline, the index remains 15.24% higher than one year ago, underscoring that the current pullback is corrective within a broader uptrend.

US WTI crude topped $100 per barrel for the first time since the initial Hormuz spike, compounding the pressure on corporate margins and consumer spending power.

Hot PPI Confirms the Inflation Problem

August PPI inflation rose to 5.4% year-over-year, above expectations of 5.3% and sharply higher than July’s 4.8%. Core PPI (excluding food and energy) climbed to 4.6% year-over-year, the highest since June 2026. 

July’s headline and core figures were also revised higher, reinforcing the upward trajectory in wholesale costs.

The data pushed the CME FedWatch probability of a rate hike to 70%. The 30-year Treasury auction drew weak demand, triggering a sharp selloff in bonds that pushed the 10-year yield to 4.95%. It’s up nearly one full percentage point since the Iran conflict began. 

The surge in long-dated yields is particularly significant because it reflects market expectations that inflation will remain elevated for longer than previously anticipated, forcing the Fed to maintain restrictive policy well into 2027. The 2-year/10-year spread has been steepening, a shift from the inversion that dominated earlier in the year.

Rising long-dated yields are particularly damaging for growth and technology stocks: Nvidia fell 2.2%, Marvell, Intel, and Lam Research dropped 3%, and Oracle fell 1.5% ahead of earnings.

Weekly initial jobless claims fell to 206,000 from 207,000, with continuing claims at 1.774 million, confirming that the US labour market remains tight despite rising borrowing costs. 

This resilience supports the case for further Fed tightening, adding to the headwinds for equity valuations.

Oil Remains the Central Risk Variable

The war in Iran continues to clog global crude flows. Saudi oil production has reportedly fallen to its lowest level in decades, and Brent briefly exceeded $108 before settling near $105. 

The USO ETF hit 52-week highs while TLT (long-duration Treasuries) hit 52-week lows. It’s a combination that signals stagflationary risk. Every dollar higher in oil feeds into forward CPI expectations and raises the probability of prolonged Fed tightening. 

The market is increasingly confronting the possibility that disruptions through the Strait of Hormuz will not resolve quickly, and that energy-driven inflation could persist well into 2027. 

The energy sector (+0.8%) was the only S&P 500 sector to close higher on the session, highlighting the divergence between energy producers, which benefit from elevated prices, and the rest of the market, which suffers from them.

On the positive side, Apple inched higher after announcing new products including the foldable iPhone Duo, and Reddit (RDDT) gained 4.7% on data showing an 8% month-over-month increase in its user base. But these were isolated bright spots in an otherwise broadly negative tape.

Technical Outlook

The S&P 500 has broken below 7,600 support and is testing the 50-day SMA. The 14-day RSI is declining toward 40, reflecting building bearish momentum. The McClellan Oscillator fell below −72, its lowest in 5+ months after similar signals historically, the S&P 500 was lower 10 of 13 times five days later.

Support is at 7,500 and 7,400. A recovery above 7,650 is needed to restore a neutral bias. The index has posted only 3 sessions with greater than 1% intraday moves in 2026 — the least since 2010 — suggesting that the current volatility expansion could have further to run.

Conclusion

The S&P 500 closed at 7,591.70 after its fourth straight decline, pressured by oil above $100, PPI at 5.4%, and 10-year yields at 4.95%. Market breadth is deteriorating and technical support has broken. 

Friday’s CPI report is the next critical catalyst — a hot print could extend the selloff toward 7,400, while a soft reading may trigger a relief rally heading into the FOMC decision.