Oil Jumps 3%, Yields Climb as Hormuz Hopes Fade: Stock Market Today

Wall Street’s record-setting run stalled Monday as crude oil surged more than 3% and Treasury yields pushed to their highest level this month, with hopes for a near-term deal to reopen the Strait of Hormuz fading fast.

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Tehran denied holding direct talks with Washington despite U.S. claims that an agreement was close, and reiterated that it wants “an end to the U.S. naval blockade, the lifting of sanctions and compensation for war-related damage” before signing anything — a set of conditions that traders read as a deal pushed well beyond the near term. 

That was enough to knock the momentum out of last week’s breakout, with equities drifting sideways.

West Texas Intermediate crude jumped 3.4% to $80.84 a barrel, while Brent climbed 3.5% to $86.45. The move rippled across the barrel: heating oil soared 7.1%, gasoline added 4.3% and natural gas rose 5.1% to $2.80 per MMBtu.

Higher energy costs fed straight into the bond market. The 10-year Treasury yield rose four basis points to 4.69%, its highest reading so far in August, while the 2-year climbed four basis points to 4.24% and the 30-year added three basis points to 5.24%.

Rate futures now put the odds of a September Federal Reserve rate hike at roughly 46%, down from about 64% a week ago, after July nonfarm payrolls unexpectedly contracted by 23,000 with sizeable downward revisions to prior months.

Traders are waiting on Wednesday’s CPI report and Thursday’s PPI print for the next read on whether oil is leaking into core inflation.

The S&P 500 edged up 0.1% to 7,766. The Dow Jones Industrial Average slipped 0.1% to 53,988.

The Nasdaq 100 lagged, down 0.2% to 29,651. Small caps took the brunt of the yield backup, with the Russell 2000 down 0.5% to 3,019.

Gold — tracked by the SPDR Gold Shares (NYSE:GLD) — held its ground at $4,360.77 an ounce, up 0.4% and clinging to a 7.5% weekly advance.

There was one notable bullish datapoint on the sell side: JPMorgan lifted its year-end S&P 500 target to 8,000 from 7,800 on Monday, raising 2026 earnings-per-share estimates to $365 from $350 and 2027 to $420 from $390, arguing that hyperscaler AI capex is finally converting into cloud revenue.

Monday’s Performance In Major U.S. Indices

According to the Benzinga Pro platform:

• The Vanguard S&P 500 ETF (NYSE:VOO) gained 0.1%.
• The SPDR Dow Jones Industrial Average ETF Trust (NYSE:DIA) eased 0.1%.
• The Invesco QQQ Trust (NASDAQ:QQQ) slipped 0.1%.
• The iShares Russell 2000 ETF (NYSE:IWM) fell 0.6%.

Energy Runs Away With It As Yields Punish Rate-Sensitives

The Energy Select Sector SPDR Fund (NYSE:XLE) was the runaway winner, up 3.4% and tracking crude’s advance tick for tick. The Health Care Select Sector SPDR Fund (NYSE:XLV) added 1%, while the Financial Select Sector SPDR Fund (NYSE:XLF) and the Materials Select Sector SPDR Fund (NYSE:XLB) each rose roughly 0.4%.

The damage was concentrated at the duration-sensitive end.

The Real Estate Select Sector SPDR Fund (NYSE:XLRE) slid 1.5%, the Utilities Select Sector SPDR Fund (NYSE:XLU) dropped 1.1% and the Consumer Staples Select Sector SPDR Fund (NYSE:XLP) fell 0.4%. The Technology Select Sector SPDR Fund (NYSE:XLK) shed 0.2%

At the industry level, the First Trust Dow Jones Internet Index Fund (NASDAQ:FDN) led with a 1.1% gain, followed by the iShares Biotechnology ETF (NASDAQ:IBB), up 1.0%.

Among Russell 1000 gainers, last week’s earnings casualties did the heavy lifting. Datadog Inc. (NASDAQ:DDOG) rose 8.1% to $252.89, extending a rebound from the roughly 18% post-print collapse on Aug. 6.

Figma Inc. (NYSE:FIG) climbed 8.2% to $25.20, also clawing back an earnings-day slide.

Rubrik Inc. (NYSE:RBRK) advanced 9% to $98.17, its seventh gain in 10 sessions.

UWM Holdings Corp. (NYSE:UWMC) topped the board with a 12.1% gain to $1.44, still repairing damage from last week’s gap lower.

On the downside, Medical Properties Trust Inc. (NYSE:MPT) was the worst Russell 1000 performer, down 12.7% to $4.11 following disappointing quarterly results.

Coherent Corp. (NYSE:COHR) slid 11.8% to $334.50 on no company news, with holders de-risking ahead of fiscal fourth-quarter results due Wednesday after the close. Peer Lumentum Holdings Inc. (NASDAQ:LITE), which reports Tuesday after the bell, fell 6.9%.

AAON Inc. (NASDAQ:AAON) dropped 8.7% to $86.60 despite reporting secon quarter adjusted EPS of 69 cents versus 52 cents consensus on revenue of $627 million against $514.7 million expected. The HVAC maker has been dogged by questions over whether it can defend margins while ramping its data-center cooling backlog.