The U.S. 10-year Treasury yield climbed to 5.11% as the Nasdaq Composite fell 1.1% from its record high. Strong economic data and higher oil prices revived concerns that inflation will be slow to ease; today's data and the U.S.-China meeting will help show whether the pressure persists.

More orders are good news for companies. But if fulfilling them is becoming harder and costs are rising quickly, growth may not support share prices to the same extent. Today I am questioning not only earnings expectations but also the price investors are paying for those earnings.

Key takeaways

  • The selloff was not limited to large technology companies. The 1.8% fall in the Russell 2000, which tracks smaller U.S. companies, suggests that expensive financing is pressuring a broader group of businesses. A rebound in a handful of large stocks is not enough to conclude that the whole market has recovered.
  • GLD ($GLD), which tracks gold, and SLV ($SLV), which tracks silver, also fell. Inflation worries alone are not lifting these assets: as Treasury yields rise, so does the opportunity cost of holding metals that pay no interest. Silver's steeper loss also stands out.
  • In today's diplomatic headlines, statements need to be separated from implementation. Positive words from the talks could quickly move prices; the scope of concrete decisions will determine what they mean for energy supply, trade and technology.

What changed since yesterday?

  • Yesterday, the main story was oil falling below $100 and chip stocks rising. Brent is now back above that level, and the Treasury yield is clearly higher than Tuesday's 4.96%. The two conditions supporting the rally have weakened at the same time; the earlier recovery case now needs stronger price support.

What happened?

  • The S&P Global U.S. Composite PMI, a measure of the trend in company activity, rose from 56.0 in August to 58.4 in September's flash reading. That was the fastest expansion since July 2021. Input costs also accelerated in the survey cited by Reuters. More orders can support company revenue, but capacity and supply constraints can feed price increases.
  • U.S. stocks closed Wednesday broadly lower: the S&P 500 fell 0.8% and the Dow 0.7%. Energy was the only S&P 500 sector to rise in Bloomberg Television's closing broadcast. Higher oil prices can support producers' revenue expectations while raising costs for companies that consume fuel, which makes that split important.
  • On September 23, U.S. Energy Secretary Chris Wright said a diesel export ban could reduce refinery output and make gasoline and jet fuel more expensive. Reuters reported that President Donald Trump supports the ban. No policy has been finalized; both sales channels and production volumes remain uncertain for refiners.

Market levels

Rates and oil

  • The U.S. 10-year Treasury yield is 5.11%, up 15 basis points, or 0.15 percentage point, from Tuesday. A move back below 5% is the first threshold that could support stocks; unless the yield returns to 4.96%, this latest jump will not have been fully unwound. The increase reduces the present value of future company earnings.
  • Brent is around $102.13 this morning. After rising about 4% on Wednesday, the pullback has not yet taken the price below $100. A move back under $100 could be an initial support for company profitability; while oil remains far from the $95-$96 area, it is too early to say that energy-cost pressure has ended.

U.S. equities

  • The S&P 500 fell to 7,706.03 at the latest close. Reclaiming Tuesday's close near 7,765 is the first threshold for a recovery; the 7,650 area is the support to watch below. Market commentator Tunç Şatıroğlu (@tuncsatiroglu) had expected a move toward 7,900 before Wednesday's selloff. The index first needs to reclaim the level it lost.
  • QQQ ($QQQ), which tracks the Nasdaq 100, closed at $741.21. Wednesday's low of $738.19 is a nearby support candidate; Tuesday's high of $748.35 is a resistance candidate. A hold within this range could allow a recovery attempt, while a break below it could give back more of the recent rise.
  • The semiconductor ETF SMH ($SMH) fell to $601.41. Şatıroğlu's latest assessment points to resistance at $616-$617. Before reaching that area, SMH needs to reclaim Tuesday's $607.46 close; Wednesday's low of $593.79 is a possible support level. A positive view on the sector does not replace these price conditions.

Metals and Bitcoin

  • GLD closed at $392.88, down about 1.8% on the day. The intraday low of $391.87 is a support candidate, and Wednesday's high of $395.50 is a resistance candidate. A recovery first needs to clear that upper level; Tuesday's $400.07 close is still some distance away.
  • SLV closed at $58.16, down about 4.2%. The intraday low of $58.02 is a support candidate; a move below it would raise the risk of further selling. The first resistance candidate is $59.03. Even if SLV clears that level, returning to Tuesday's $60.73 close would be a separate step.
  • Bitcoin is around $84,187 this morning, below the possible $84,600-$85,000 support area in Şatıroğlu's earlier assessment. Reclaiming that range is the first threshold for a recovery, but moving back above it would not by itself establish that the move can last. I will not automatically carry forward the earlier bullish view at today's price.

Red flags

  • Stocks and metals falling together is a reminder that spreading investments across different assets does not provide protection every day. The same rate shock can affect several assets; it can be misleading to assume their short-term moves are independent.
  • Headlines about a diesel export ban that has not yet been implemented could quickly move refinery stocks. Before deciding whether the headline is positive or negative, the duration of any ban, its exemptions and its effect on production matter.

Calendar

  • Today, 3:30 p.m. Turkey time: U.S. weekly initial jobless claims. After the strong activity data, the figures will be checked for signs of a clear cooling in the labor market.
  • Today, 5:00 p.m. Turkey time: U.S. August new-home sales. The effect of high borrowing costs on demand will be in focus.
  • Today: President Donald Trump meets Chinese President Xi Jinping at the White House. Any decisions announced could change expectations for trade and technology companies.
  • Friday, September 25, 12:00 a.m. Turkey time: Costco's earnings call. The company's view of consumer demand and costs will matter.

My analysis

When strong growth and rising inflation pressure appear at the same time, good economic news can push share prices down. More orders can support profits, while more expensive credit, wages and fuel can reduce that support. That is why I do not read yesterday's selloff as profit-taking alone; I am watching how much of their growth companies can turn into profit and what price investors are paying for it.

Before becoming more positive on a recovery, I would want the rise in Treasury yields to stop, then chips and smaller companies to strengthen together. If that participation comes while oil falls, the chance that the latest decline remains limited increases. If yields stay high and the rebound is confined to a few large stocks, an index rise on its own will not change my view.

Sources

This is not investment advice; it is a research and monitoring note.