Monday, August 31, 2026
Monday ended August with a more defensive market beneath relatively modest index losses.
The S&P 500 fell 0.33% to 7686.14, the Dow lost 0.70%, and the Nasdaq Composite slipped only 0.12%. But breadth was considerably worse: declining stocks outnumbered advancers nearly 2-to-1 on the NYSE, RSP fell 0.62%, and IWM lost 0.62%. The offset was technology leadership, where semiconductors strengthened late, Nvidia remained firm, CrowdStrike extended its post-earnings rally, and Tesla surged more than 5%.
The important change is that oil and long-term Treasury yields moved back into the pressure zone together. Brent closed above $90 and the 10-year Treasury yield reached roughly 4.76%, while markets increased the probability of a September Fed hike to more than 65%.
The market is not breaking down, but financial conditions became less friendly again just as September begins—and the calendar itself is becoming less supportive.
Monday’s Movement
S&P 500: 7686.14: -0.33%.
Nasdaq 100: approximately 29457: +0.08%.
Dow: 53185.90: -0.70%.
Russell 2000: 2956.45: -0.54%.
SPY: 767.05: -0.30%.
QQQ: 716.76: +0.05%.
DIA: 531.57: -0.65%.
IWM: 293.93: -0.62%.
RSP: 219.33: -0.62%.
SMH: 556.63: +0.64%.
10-year Treasury: approximately 4.76%.
30-year Treasury: approximately 5.25%.
Brent: approximately $90.5, +2.7%.
WTI: approximately $85.8, +2.8%.
September Fed-hike probability: above 65%.
Bias: Cautious but still constructive above S&P 500 7620. Semiconductor and selected technology strength are encouraging, but breadth, oil, long yields and September’s less supportive flow backdrop are moving against the market.
Market Message
Monday’s market was more fragile underneath than the S&P 500’s 0.33% decline suggests.
The broad market weakened, the Dow and small caps underperformed, equal weight declined, and NYSE decliners nearly doubled advancers. Yet Nasdaq 100/QQQ held roughly flat, SMH rose, Nvidia stabilized, CrowdStrike remained strong and Tesla surged.
That creates an unusual split: broader participation deteriorating + selected technology leadership still attracting money.
At the same time, the macro combination worsened: Brent above $90 + 10-year Treasury above 4.75% + September Fed-hike odds above 65%.
September also begins with a less favorable structural backdrop. Retail dip-buying historically weakens, corporate buybacks will increasingly enter blackout windows, systematic exposure has already rebuilt, and downside protection remains unusually inexpensive. None of that calls for a bear market, but it strengthens the case for preserving buying power and letting volatility create better entries rather than chasing.
The positive interpretation is that QQQ and semiconductor leadership absorbed the macro pressure surprisingly well.
The negative interpretation is that the rest of the market did not.
Snapshot
August itself was strong despite the weak finish.
The S&P 500 gained 2.6% for August, Nasdaq rose approximately 3.9%, and the Dow gained roughly 1.3%.
But Monday’s internals were poor:
NYSE decliners beat advancers approximately 1.95-to-1.
Nasdaq decliners beat advancers roughly 1.58-to-1.
New lows substantially exceeded new highs.
RSP and IWM both underperformed the headline S&P 500.
Retail investors also appear less willing than usual to buy weakness heading into September, with down-day buying running at roughly half its normal pace.
That removes one source of support that repeatedly cushioned pullbacks earlier this year.
For the month of August, our matrix shows these top 10 winners and losers:
Key Takeaways
1) S&P 500 slipped below 7700 again
The index closed at 7686, moving back below the near-term 7700 pivot but remaining above the more important 7620 breakout level.
That makes the hierarchy straightforward:
7700 needs to be reclaimed.
7620 needs to hold.
2) Treasury yields moved through the pressure level
The 10-year Treasury yield rose to roughly 4.76%, reinforcing the valuation pressure on equities, particularly expensive growth.
The question now is whether this becomes a sustained move or another temporary geopolitical/rate spike.
3) Fed expectations hardened
The combination of higher oil, sticky inflation risk and Warsh’s hawkish Jackson Hole message has pushed September tightening expectations materially higher.
That makes Friday’s employment report unusually important because good economic news can now become bad market news if it pushes hike expectations even higher.
4) Oil moved back above $90
Brent rose roughly 2.7%, returning above $90 as renewed U.S.-Iran tensions increased the geopolitical risk premium around Hormuz.
Oil above $90 is manageable.
Oil moving toward $95 while yields remain above 4.75% would be considerably more problematic.
5) Technology did not break uniformly
This may be Monday’s most useful positive signal.
Semiconductors strengthened late, Nvidia stabilized, CrowdStrike extended its post-earnings advance and Tesla surged 5.5% while reclaiming its 50-day moving average.
That tells us investors are still willing to reward clear relative strength even while the broader tape deteriorates.
6) September’s asymmetry is becoming less attractive
September has historically been the weakest month for the S&P 500, with an average return around -1.1% and an average intra-month decline of roughly -4.7%. Midterm Septembers have historically been weaker still.
That is not a reason to become strategically bearish.
It is a reason to expect more volatility and demand better entries.
AI and Technology
Monday produced an important reminder that AI expansion is increasingly about ecosystem control as much as chip sales.
Nvidia announced a $3.5 billion investment in MediaTek, deepening the companies’ relationship and expanding Nvidia’s architecture into custom AI chips, PCs and automotive applications.
The AI framework therefore remains:
Infrastructure suppliers: exceptional demand.
Hardware: strong, especially where scarcity and pricing power exist.
Hyperscalers: enormous capex; monetization and free cash flow increasingly matter.
Software: must demonstrate actual AI revenue and productivity benefits.
Financing: becoming a more visible part of the ecosystem.
Margins and ROIC: increasingly determine which AI growth is economically valuable.
The opportunity is also broadening beyond chips toward the companies that power, cool, connect, test and package AI infrastructure.
SLB’s acquisition of Kelvion fits directly into that downstream opportunity set through data-center cooling and power infrastructure.
Important Stock Moves
PG&E (PCG): -20.1%. PG&E suffered its largest decline in years after California wildfire legislation failed to sufficiently reduce utilities’ exposure to future liabilities. The move demonstrates how quickly idiosyncratic regulatory risk can overwhelm defensive-sector characteristics.
Tesla (TSLA): +5.5%. Tesla showed exceptional relative strength during a weak tape and reclaimed its 50-day moving average. That puts the stock back on the leadership-repair watch list. The next question is whether it can hold the reclaimed level rather than immediately surrender it.
CrowdStrike (CRWD): +5.8%. CrowdStrike extended its post-earnings advance and finished as one of the strongest S&P 500 stocks. The positive reaction reinforces cybersecurity as one of the cleaner technology areas where fundamentals and price action remain aligned.
Nvidia (NVDA): approximately +1.4%. Nvidia advanced despite higher yields and oil. The positive reaction is meaningful because the stock resisted a macro backdrop that normally pressures long-duration AI leadership.
Micron Technology (MU): approximately +3%. Micron continued showing better relative strength within semiconductors, reinforcing memory as one of the stronger parts of the AI hardware stack.
SanDisk (SNDK): approximately +5.5%. SanDisk extended memory/storage relative strength despite broad-market weakness.
Howmet Aerospace (HWM): approximately -7.5%. Howmet dropped after concerns that SpaceX could internalize turbine-blade manufacturing. The broader lesson is important: powerful customers increasingly have the scale to bring critical supply-chain functions in-house, creating customer-concentration and vertical-integration risk for suppliers.
SLB (SLB): +approximately 3.8%. SLB rallied after announcing its acquisition of Kelvion, giving investors another route into AI data-center cooling and power infrastructure.
Sector Leadership
Leading
Semiconductors
Memory/storage
Cybersecurity
Selected AI infrastructure
Energy
Data-center cooling/power beneficiaries
Lagging
Utilities
Industrials
Small caps
Equal-weight equities
Rate-sensitive groups
Interpretation
Monday was not healthy broad rotation.
Energy benefited from geopolitical inflation while technology leadership was highly selective.
For the market to improve, investors need to see: SMH and leading technology remain firm while RSP and IWM stabilize.
If a few technology leaders continue carrying the tape while breadth deteriorates, index-level resilience becomes less convincing.
Rates / Fed / Volatility
This has become the dominant macro constraint.
The 10-year Treasury yield moved above 4.75%, while the long end remains historically elevated.
The important conceptual shift is that AI investment itself may help keep long-term yields elevated by creating enormous demand for capital.
That means AI can simultaneously be:
bullish for economic growth and earnings
while also being
bearish for bond prices and expensive equity valuations.
Volatility is another important September variable.
The VIX recently sat near the mid-14s, while downside protection has become unusually inexpensive across the S&P 500, small caps, financials and consumer groups.
Volatility probably has more room to rise than fall from here.
That does not mean a decline is imminent.
It means protection is cheap relative to the number of catalysts ahead.
Commodities and Dollar
Oil was Monday’s dominant macro mover.
Brent returned above $90, leaving the market once again in the active inflation-pressure zone.
The preferred equity combination remains:
Brent below $90 + 10-year below 4.75% + stable dollar.
Monday produced the opposite on the first two measures.
Another useful geopolitical tail risk is Kharg Island, which reportedly handles roughly 90% of Iranian oil exports. No attack has been confirmed, but any genuine threat to that infrastructure would materially change the oil equation.
Crypto
Crypto was not the primary market signal Monday.
The more important liquidity signal came from rising Treasury yields despite weaker equities, which indicates tighter financial conditions rather than simple rotation.
Bitcoin remains worth monitoring, but QQQ, SMH, the 10-year yield and oil currently provide cleaner information about broader risk appetite.
Technical Picture
S&P 500
Close: 7686
Immediate resistance: 7700
Next resistance: 7750
Major resistance: 7800
Next upside target: 7857
Immediate support: 7675
Structural support: 7620
Next support: 7550
Major support: 7500
7675 is Tuesday’s first test.
If that holds and 7700 is reclaimed, Monday remains another manageable geopolitical/rate pullback.
If 7675 breaks, the probability of another 7620 test rises quickly.
SPY
Close: 767.05
Immediate support: 764–767
More important support: 760–762
Initial resistance: 769–770
Next resistance: 775
Nasdaq 100 / QQQ
QQQ: 716.76
Immediate support: 713–715
Important support: 710
Major support: 700
Initial resistance: 720
Next resistance: 725–730
QQQ’s ability to finish roughly flat despite the macro pressure remains encouraging.
Semiconductors / SMH
Close: 556.63
Immediate support: 550–553
Initial resistance: 560
Next repair zone: 570–575
Important repair: 580
Major resistance: 590
Former breakout: 600
SMH needs a close above 560 before the repair becomes more meaningful.
Russell 2000 / IWM
IWM: 293.93
Immediate support: 292–294
Next support: 290
Initial resistance: 297
Major pivot: 300
Small caps remain the weakest major piece of the tape.
Quality of the Move
Constructive
Nasdaq 100 held roughly flat.
QQQ remained resilient.
SMH gained.
NVDA, MU and SNDK showed relative strength.
TSLA reclaimed its 50-day moving average.
CRWD extended its post-earnings move.
S&P 500 remains above 7620.
August still produced strong monthly gains.
AI opportunity continues broadening into power, cooling and infrastructure.
Concerning
S&P 500 lost 7700.
RSP and IWM underperformed.
NYSE breadth was nearly 2-to-1 negative.
New lows exceeded new highs.
Retail dip-buying is weakening into September.
Brent moved back above $90.
10-year yield moved above 4.75%.
September Fed-hike odds climbed.
Corporate buybacks will increasingly enter blackout windows.
Systematic exposure has already rebuilt.
Volatility protection remains unusually inexpensive.
Assessment
Monday weakened the broad market but did not break leadership.
That is a reason for greater selectivity and vigilance—not an outright bearish signal.
Daily Scenarios
Bull Case: The S&P 500 holds 7675, reclaims 7700, Treasury yields retreat below 4.75%, Brent moves back below $90 and semiconductor/technology leadership continues improving while breadth stabilizes. (35% probability)
Base Case: The S&P 500 consolidates between roughly 7620 and 7750 as investors digest elevated oil and yields while waiting for Broadcom and Friday’s jobs report. September produces more chop and rotation than trend. (45% probability)
Bear Case: Brent moves toward $95, the 10-year Treasury establishes itself above 4.75%, retail/corporate buying support fades, breadth continues deteriorating and the S&P 500 loses 7675 followed by 7620, opening a deeper correction toward 7550–7500. (20% probability)
How Probabilities Improve
The setup improves if:
S&P 500 holds 7675
S&P 500 reclaims 7700
QQQ holds 713–715
QQQ reclaims 720
SMH clears 560
IWM stabilizes above 292–294
RSP stops underperforming
10-year Treasury falls below 4.75%
Brent falls below $90
Fed-hike odds stop rising
semiconductor breadth improves beyond NVDA/MU/SNDK
The strongest signal would be:
oil below $90 + 10-year below 4.75% + SMH above 560 + S&P 500 above 7700 + improving RSP/IWM.
How Probabilities Weaken
The setup deteriorates if:
S&P 500 loses 7675
S&P 500 closes below 7620
QQQ loses 710
SMH loses 550
IWM loses 290
RSP continues materially underperforming
retail dip-buying continues fading
10-year Treasury establishes itself above 4.75%
Brent advances through $95
September hike odds increase further
Iran/Hormuz escalation worsens
Potential Opportunities
SMH / NVDA, MU, SNDK, AVGO: Why interesting: semiconductors gained despite rising oil, yields and broad-market weakness. Setup: relative-strength repair. Confirmation: SMH clears 560 and then 570–575. Invalidation: sustained loss of 550.
NVDA: Why interesting: Nvidia continues holding relative strength following earnings and is expanding its ecosystem through strategic investments. Setup: post-earnings support/relative strength. Confirmation: price holds post-earnings support and begins outperforming QQQ again. Invalidation: complete failure of the earnings breakout.
CRWD: Why interesting: continued post-earnings strength in a weak tape places CrowdStrike among the clearest technology leaders. Setup: momentum continuation or controlled pullback. Confirmation: recent breakout holds or price pulls back constructively toward support. Invalidation: rapid earnings-gap failure.
TSLA: Why interesting: 5.5% relative-strength move and reclaim of the 50-day moving average. Setup: leadership repair. Confirmation: holds the 50-day and develops follow-through above Monday’s range. Invalidation: immediate loss of the reclaimed moving average.
SLB: Why interesting: the Kelvion acquisition adds direct exposure to AI data-center cooling while preserving energy-sector cash flow. Setup: event-driven infrastructure diversification. Confirmation: Monday’s gap holds and investors continue rewarding the data-center strategy. Invalidation: rapid gap failure.
SPY: Why interesting: the larger breakout remains intact despite macro pressure. Setup: support retest. Confirmation: 7675 holds and S&P 500 reclaims 7700. Invalidation: decisive close below 7620.
IWM: Why interesting: small-cap weakness could create opportunity if yields reverse. Setup: oversold breakout-repair watch. Confirmation: reclaim 297, then 300, alongside falling yields. Invalidation: sustained loss of 290.
Next Key Events
Tuesday: Manufacturing PMI, construction spending, ISM Manufacturing and JOLTS begin the September macro calendar.
Wednesday after the close: Broadcom earnings become the week’s largest AI catalyst. The market will focus on custom silicon, AI networking, hyperscaler demand, margins and whether the price reaction confirms the fundamentals.
Thursday: Additional labor indicators and services data provide the final setup before payrolls.
Friday, September 4: August employment report. The report may now carry a classic good-news-is-bad-news risk: a strong number could push September hike odds even higher, while a softer report could relieve yields if it does not revive recession fears.
September then becomes increasingly macro-dominated, with PPI, CPI and the FOMC replacing the earnings tailwind that carried much of August.
Need To Know
S&P 500 fell 0.33% to 7686.
S&P 500 lost 7700 but remains above 7620.
QQQ held roughly flat.
SMH gained 0.64%.
TSLA gained 5.5% and reclaimed its 50-day.
CRWD gained roughly 5.8%.
IWM and RSP weakened.
Breadth was poor.
Retail dip-buying is fading into September.
Brent returned above $90.
10-year Treasury moved above 4.75%.
September hike odds increased.
Buybacks will increasingly enter blackout windows.
Broadcom reports Wednesday.
Jobs report arrives Friday.
Bottom Line
Monday weakened the broader market, but it did not produce the type of leadership breakdown that would justify turning strategically bearish.
The S&P 500 fell to 7686, breadth deteriorated, RSP and IWM weakened, Brent moved back above $90 and the 10-year Treasury yield pushed through the important 4.75% area. At the same time, retail dip-buying appears to be weakening just as September’s seasonally difficult window begins.
Yet QQQ remained resilient, semiconductors strengthened late, Nvidia held firm, CrowdStrike extended its earnings move and Tesla reclaimed its 50-day moving average. Leadership has not broken.
The most important technical level Tuesday is S&P 500 7675, followed by the larger 7620 structural support. The first upside requirement is a reclaim of 7700. For leadership, SMH 560 remains the first repair level.
The most important macro catalyst ahead is Friday’s August employment report, while Broadcom earnings Wednesday provide the next major AI test.
Preferred posture: remain selective, maintain exposure to stocks demonstrating genuine relative strength, and preserve buying power. September begins with oil above $90, the 10-year above 4.75%, weaker breadth, softer retail dip-buying and fewer structural buyers waiting on the sidelines. That is a tactical reason for patience—not a strategic reason to become bearish. If volatility produces a seasonal pullback while earnings and leadership remain intact, the better opportunity may come from buying lower rather than chasing the final strength of August.
Three To Read
September Pullback Could Be a Gift
Like many on Wall Street, Scott Rubner is preparing for a potentially more challenging month ahead. Earnings are largely behind us, systematic exposure has rebuilt, corporate buybacks are beginning to fade, retail demand historically weakens, volatility has already collapsed, and September brings a heavier macro calendar, large options expiration, and the weakest seasonal window of the year. His expectation is not for the start of a major downturn, but for a tactical reset that could create a better buying opportunity heading into mid-October and year-end. In sum, a pullback in September may ultimately be a gift. (Scott Rubner, Citadel)
Key Market Signals at a Crossroads
The market enters September with the uptrend still intact, but several important indicators are sitting near consequential levels. The VIX has fallen below 15, the 10-year Treasury yield is back above 4.7%, earnings growth is expected to slow from an unusually strong pace, and leadership remains concentrated. The bigger issue is not September seasonality itself, but whether a break in volatility, yields, breadth, or risk appetite starts to signal a change in the market’s character. (Mike Santoli, CNBC)
The Real Risk Behind $40 Trillion in Debt
The bigger risk from America’s $40 trillion debt may not be default, but whether the financial system can keep absorbing an ever-growing supply of Treasurys without pushing yields higher and tightening financial conditions. New research suggests the cost of absorbing that debt has more than doubled over the past decade, while some foreign central banks are also shifting reserves away from dollar assets and toward gold. The result is a growing squeeze between rising Treasury supply and potentially less reliable demand, which could increasingly show up through higher long-term yields, greater bond-market volatility, and pressure on equity valuations. (Steve Goldstein, MarketWatch)
“If it rains, let it rain, if the wind blows, let it blow.” — Ikkyū
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Have a terrific Tuesday, my friends. - C.E. Kirk