September has lived up to its reputation as Wall Street's toughest month so far this year, with a bumpy few sessions that included two days of losses followed by a rebound.
The Dow Jones Industrial Average fell 374 points, or 0.7%, on August 31, then fell again on September 1, dropping 419 points, or 0.8%, to close at 52,766.88, as geopolitical tension in the Middle East and rising bond yields weighed on sentiment. The yield on the benchmark 10 year Treasury note rose to 4.804%, its highest level in 20 months, while the 30 year yield climbed to 5.28%. Higher yields tend to pressure stocks because they make bonds a more attractive, lower risk alternative and raise borrowing costs for companies. The market then turned higher on September 2, with the Dow gaining 295 points, or 0.56%, to close at 53,061, and the broader S&P 500 index rising to roughly 7,668, up 0.48% on the day.
Zoomed out, August itself was a good month for stocks: the Dow rose more than 1%, its fifth straight monthly gain and 15th monthly win in the last 16 months, while the S&P 500 and Nasdaq Composite advanced 2.6% and 3.9% respectively.
Performance has diverged sharply beneath the surface. The energy sector is the best performer in the S&P 500 so far in 2026, up 43% for the year, while Marathon Petroleum shares recently traded at their highest level since June 2011. On the other side, Nike shares hit a 52 week low near $38, a level the company has not seen in over two decades, and shares of travel and leisure companies including Wynn Resorts, Las Vegas Sands, VICI Properties, and Carnival also touched 52 week lows, alongside a broader pullback in housing related stocks. Pfizer, meanwhile, hit its highest price since October 2024.
Investors are looking ahead to Friday's US jobs report for August, which will be a key data point heading into the Fed's September meeting.
Why are Treasury yields rising?
Yields have climbed alongside expectations that the Federal Reserve may raise rates in September rather than cut them, given persistently elevated inflation.
Why are travel and leisure stocks struggling?
Companies including Wynn Resorts, Las Vegas Sands, VICI Properties, and Carnival have hit 52 week lows this week, though the specific causes were not detailed in the available reporting.