-0.51% S&P 500 ($SPY) -0.60% Nasdaq ($QQQ) Good Afternoon everyone. If yesterday was a warning shot, today is the market holding its breath. Stocks are slipping again Tuesday as three separate pressure fronts converge ahead of tomorrow's Fed decision — and none of them are letting up. Oil just crossed $104. The 10-year Treasury yield hit 5.02%, its highest level since 2007. And the FOMC is meeting right now, with a rate hike almost fully locked in for tomorrow afternoon. This week is one of the most consequential in months, and it's only Tuesday. The 10-Year Just Broke a 19-Year High. The 10-year Treasury yield surged to 5.02% this morning — clearing the 2023 peak we flagged last Friday and reaching levels not seen since 2007. This is not a footnote. A 5%+ risk-free rate fundamentally changes the math on every growth stock and high-multiple name in your portfolio. When you can earn 5% sitting in Treasuries, the justification for paying 25–30× earnings on a tech stock requires a much stronger argument. The S&P is down 0.49% and the Nasdaq is off 0.26% — relatively contained for now, but the pressure is building. The VIX jumped 5% to 17.96, signaling rising anxiety ahead of tomorrow. Oil Is at $104 and Climbing. WTI crude is up another 2.64% today to $104.10 — that's a 20% gain for the month of September alone. Brent is above $107.90. The catalyst today is the continued fallout from Saudi Arabia's East-West pipeline closure after drone strikes, which knocked out a route handling roughly 4% of global oil supply. The Pentagon disclosed $33.4 billion in costs from the ongoing US-Iran conflict, including the loss of four F-15s and up to 30 drones. The war is real, the disruption is real, and $100+ oil is not going away anytime soon. For everyday Americans, the national gas average just hit $4.32/gallon — and that number feeds directly into tomorrow's Fed thinking. The Fed Decides Tomorrow. Here's What You Need to Know. The FOMC's September meeting kicked off today, with Chair Kevin Warsh set to announce the decision at 2 PM ET Wednesday. Markets are pricing a 92.7% probability of a 25-basis-point hike, bringing the target range to 3.75%–4.00% — the first rate hike since July 2023. A Duke University survey of 32 former Fed governors and economists found 29 out of 32 said the Fed should hike. The case is airtight: energy prices haven't reversed, inflation is sticky, and AI infrastructure spending is adding to price pressures. The real question isn't whether Warsh hikes — it's what the dot plot says about what comes next. Deutsche Bank expects the median dot to show another hike before year-end, and futures are already pricing two more quarter-point moves by end of 2026. Warsh is known for "minimalist communication," so don't expect hand-holding from the press conference. Read the dots, not the words. What If He Pauses? Don't count on it — but if Warsh surprises and holds rates steady, the bond market would likely punish him anyway. The 10-year is already at 5.02%. A credibility-damaging pause could paradoxically push long rates even higher as inflation expectations surge. Kiplinger's economists put it plainly: "If he resists, the long-term Treasury bond market is likely to pitch a fit." There is no clean exit here. Today's Big Movers. Not everything is red. $SWKS is up 10% on optimism around its pending $22 billion merger with $QRVO and $AAPL product tailwinds. $DELL is adding 5.65% — its $95 billion AI server order backlog continues to be the story that keeps giving. On the downside, Enova International cratered 24% after pulling its application to acquire Grasshopper Bancorp. Dave & Buster's dropped 15.6% on a Q2 earnings miss. $AXON fell nearly 11% after announcing a $1 billion convertible note offering. $COIN is off 4.6% ahead of a Senate vote on the CLARITY Act crypto regulatory framework — Bitcoin sits at $76,957, down 1%. One More Thing. Elon Musk hinted at a possible Tesla/SpaceX merger at the All-In Summit in LA yesterday. Tesla is barely moving on the news but it's worth watching — a combined entity would reshape how both names are valued and would be one of the largest companies on earth. File it under things to monitor rather than trade on today. Bottom line: Tomorrow is the day. Fed decision at 2 PM ET, press conference to follow, dot plot released simultaneously. Get positioned before the open — volatility will spike at 2 PM regardless of direction. Watch the 10-year: above 5.1% on a hawkish dot plot tests the S&P's 7,600 support hard. A dovish surprise triggers a sharp relief rally in growth names. Either way, this is not the week to be passive. Know your levels, keep your stops tight, and check back tomorrow.
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