Video summary
The daily market session on September 2nd opened with significant volatility but concluded in the green across major indices, driven largely by a strong rally in technology and energy sectors. The S&P 500 surged nearly half a percent to trade at 7676, while the Dow Jones Industrial Average climbed over 250 points to reclaim levels above 53,000. Despite an initial dramatic dip in the Nasdaq 100, it recovered to finish positive by roughly one-tenth of a percent at 29,154, with the Russell 2000 leading the broader market gains by gaining over 1.2%. This upward momentum was fueled by a rebound in crude oil prices after a brief pullback; despite fluctuating between $89 and $92, oil settled higher for the session, allowing equities to accelerate as investors digested the mixed energy data.
A central theme of the trading day was the sharp rise in the 10-year Treasury yield, which climbed to 4.8%, marking its highest level since November 2023. This surge in yields coincided with a strengthening US dollar and rising gold prices, as the metal rallied back above $44 following last night's losses. The volatility index, known as the VIX, saw a significant "suckout" dropping to around 15, indicating reduced fear in the market despite the high interest rates. Commodities also performed well, with silver gaining over six-tenths of a percent and copper-related stocks like Southern Copper and Freeport-McMoRan posting solid gains, reflecting the broader theme of resource strength amidst economic uncertainty.
Market commentary highlighted the conflicting signals regarding future monetary policy, particularly from New York Fed President John Williams. He attributed the rising yields to a robust US economy driven by massive investments in AI, data centers, and technology, suggesting that financial conditions are reacting to economic strength rather than causing it. However, he maintained a wait-and-see approach on further interest rate hikes, noting that there are currently no clear signs that inflation will return to target within the next year or two. This perspective contrasts with the reality of mortgage rates hovering near 7%, making home ownership challenging for many, though the speaker noted that refinancing remains an option for those already in the market.
Looking ahead, the focus shifts to upcoming economic data and corporate earnings, specifically Broadcom's report scheduled for release after the bell. The transcript emphasizes that the current high yield environment is a "best-case scenario" if inflation can be tamed within two years, but warns that further action from the Federal Reserve may be necessary if targets are missed. With the next Fed meeting approaching on September 16th, investors are closely watching how the interplay between a strong AI-fueled economy and persistent inflation will shape future rate decisions. The market's resilience in the face of these headwinds, particularly in the tech sector led by giants like Nvidia which added significant market capitalization, suggests that investor confidence remains high despite the elevated cost of borrowing.
Read the full video transcript
Good afternoon, folks. Tommy O'Brien
coming to you live from T F N N
Wednesday afternoon. We got about 60
minutes left to go in the trading day,
and you got markets in the green. We
accelerate from pre-market lows. S&P's
right now up nearly half a percent, up
33 points, trading at 7676.
Nasdaq 100 was in the red dramatically,
and we get it back and then some. We're
positive by 1/10 percent, up 28 points
at 29,154.
The Dow up half a percent, quite a rally
early in the session from the Dow.
And crude in focus today for sure. Okay,
crude was easing for a bit. It allowed
the market to accelerate. We had a
pullback, but Dow right now up half a
percent, back above 53,000, up 257
points, 53,085. And the Russell leading
the way. How about the Russell up by
1.2%? Up 35 bucks, 2959.
I mentioned crude. A little bit of a
roller coaster.
Last night, 9229. This morning, we're
back there at $89. I mentioned 7:00.
There you see the drop that we had.
Okay, and we're back above that price
level though. We reached 9150. We're at
9078. Crude up by 56 pennies. We jump
over the 10-year right now. Yields in
focus. Now, we got non-farm payrolls on
Friday.
Excuse me, you have a 10-year right now
trading
flat on the session at 10712. And you
have a 10-year yield of 4
.8.
4.8.
Quite a number.
Yeah, take a look at the
the weekly and check out how we are
breaking.
Okay, January 2025,
the low was 10706.
You just hit 10708.
Right back to where we were.
In January 2025, now you take a look at
yields on a little bit of a longer-term
basis. You go back 5 years.
We've been here before many times. Okay,
we're almost there in 2022. You made as
low as 105.10 in 2023 and we were right
here in 24 and at the beginning of 25.
So, critical area. We got yields pushing
those highs at 4.8 right now on the
10-year.
The dollar chops around we're at 99.60
down by seven pennies. We'll go back to
the short term and yeah, we had some
action this morning, man, when I was on
the air. How about that weakening? Now,
the dollar's gotten some of it back.
Okay, but dollar 99.61 under some
pressure.
We jump over the yen.
I think they're coming in this yen
market again, folks. You had lower
prices. Now, when this goes lower, this
is the yen strengthening
which would correlate to the dollar
weakening. I talked to our man Teddy
Cakes that this morning. Okay, he
rightfully pointed out there's some
action across the board on differing
levels. Check out the New Zealand
dollar, right? Check out the action last
night. You check out the euro US dollar.
Okay, you see that spike coming into the
market at 9:00 as well. The euro's
almost gotten it all back. To 115.83
right now.
But that lays the context of gold
catching a little bit of a bid as you
saw that dollar drop off. So, gold last
night at 43.29,
we rally up to 44.40.
Oh my goodness, look at this price,
folks.
44.44.40
We just needed four more pennies. Just
four more pennies would have been the
perfect one, right? That's quite a
number, man. Gold up 26 dollars right
now in the session clawing back those
losses of last night.
So, gold's up 6/10% GDX up more than 2%.
Gives back some of the gains as gold
pulls back a bit, but quite an
acceleration earlier up to above 98.50.
You jump over to silver
up by 6/10% Heckler today. How about it?
Heckler up 7% today. Talk about an
acceleration, man.
Harmony yeah,
some of the tigers in the den talking
about those copper stocks. Southern
Copper up by half a percent today.
Freeport up by 1.4% right now.
All right, we jump over the VIX.
How's that for a volatility suckout? We
almost got a 14 handle, folks. 15.13 on
that volatility index. Now,
10-year Treasury yield, that's the
highest level since November of 2023,
folks. Okay, so you better believe
yields in focus. Highest since November
of 2023
with yields in focus right now.
And after the bell today, we get
Broadcom
with their numbers.
Okay, pulling back from the highs of 495
in June, the last time they had their
numbers. Now, look at the volume. Look
at the volume the last time they
reported, folks. You talk about
expectations.
Okay, this thing has not had a bid with
strength since that pullback, and we
are, you know, that is quite a wall of
worry, man.
And so, they'll be after the bell today.
Jump around to some of the other big
dogs. How about Nvidia, man? How about
Nvidia? Look at this run.
Part of the reason why you had the
market accelerating when you have Nvidia
up 3.2% you're up $7. Remember, folks,
almost 25 billion shares outstanding
today alone.
175
billion dollars in market capitalization
added. And Jensen Huang, he knows how to
use that equity, man. He knows how. He's
swinging around that equity, making
deals,
and riding
the AI wave.
Excuse me.
Now, you talk about why is the yield
surging?
A lot of different hot takes.
And New York Fed Williams, yeah.
John Williams, New York Fed president.
He just thinks it's rising cuz we have a
strong economy. Now, he's the president
of the New York Federal Reserve, folks.
Okay?
He added that he's taking a wait-and-see
approach to whether an interest rate
hike is necessary.
There's no clear signs right now whether
monetary policy currently sufficient to
make sure we're bringing inflation back
to target in the next year or two.
Year or two?
We're in year five and a half. Year or
two? That's a best-case scenario.
Because it is best-case scenario, even
when he's talking it up, right?
Whether it's going to go back or you
need to see further action to do that.
So, that's like best-case scenario, we
go back there in a year or two.
We got the next Fed meeting 2 weeks from
today, folks, September 16th.
And his quote, "What's driving it in
large part is a really strong US economy
and a strong economic outlook outlook
fueled by big investments in AI and data
centers and technology in general. So, I
think it's not really about financial
conditions affecting the economy, it's
more about the economy affecting
financial conditions."
Well, that's one man's take, folks.
But boy, it sure is a heck of a
coincidence
that the 10-year yield chart looks like
this since we've been in a war with
crude pushing $92. That war adding to
the debt, right?
So, that's the context of the
conversation in the same way as well
because we had a 10-year at 3.98
before we went to war.
And now,
we got crude.
Okay?
High as it high, 93.50, you hit 92.29.
And there's the spike on crude
initially. And yeah, 3.98 the yield.
Whoa, we! Remember we're talking about
man, still still, okay? We've been
saying go get a house, folks, go get a
house. You know, if you know people that
are trying to get a starter home, boy,
it's a little tough right now with
mortgage rates hitting almost 7%
folks. But guess what? You can always
refinance.
Okay? You're paying rent anyway.
Right? And we have inflation. You just
heard the New York Fed president. In a
year or two, or will do more. That's
like best-case scenario. A year or two,
or they're going to have to do more.
S&P's up by 37. We'll come right back.