The market is lower as oil prices and yields dominate the tape. There was an attempt to recover as yields eased from their earlier highs although the three indices remain firmly in negative territory.

Renewed geopolitical concerns added pressure to the market as the U.S. Central Command confirmed that U.S. forces began striking IRGC targets in Iran at 12pm ET today.

While the Fear and Greed index is still in neutral range, it has dipped slightly toward Fear as caution seems to be strengthening a bit.

Five sectors are in the green with Energy (XLE) leading as higher oil prices provide support for the group. Consumer Discretionary (XLY) is holding the widest loss as Tesla (TSLA) gave back a portion of yesterday’s gains. The rotation out of AI plays is driving today’s losses in Industrials (XLI) and Technology (XLK).

In the first day of trading for September, Health Care (XLV) names are leading the S&P 500 winners list. Medtronic (MDT) is higher after surpassing Q1 expectations and raising FY27 guidance.

While refiners are still moving to more new highs.

Economic Data

The Atlanta Fed’s Q3 real GDP estimate ticked up to 4.82%, the highest since August 6^th. The move comes driven by gains from business spending, inventories, and consumption which offset a sharp deterioration in net exports.

The ISM manufacturing eased to 54.6, but it is still the second highest level since 2022. This is the eighth straight month of expansion making it consistent with the 2.4% real GDP growth.

• New Orders -3.0pts to 53.7
• Production -0.2pts to 58.3, still the second best since late 2021
• Employment -1.6pts to 51.2, marking its second month of expansion
• Prices unchanged at 71.1, the lowest since February

It was a low hire, low fire reading for the July JOLTS reports. Job openings increased +89k to 7.27M but June was revised downward -177k to 7.18M-the biggest revision since 2025. Hires dropped -278k to 5.05M while quits fell -157k to 3.05M.

Fed Update

Fed Governor Barr, who has been favoring holding rates steadily, was a touch more moderate in his remarks at the Second-Chance Lending Forum in Washington. He said he would back a September rate increase if inflation “appears not to be moderating sufficiently.”

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