This Week on Wall Street

Stocks fell for a fifth straight session Tuesday as the 10-year Treasury yield topped 5% for the first time since 2007, with the S&P 500 down 0.45% to 7,585.73, the Nasdaq Composite off 0.78% to 25,981.57, and the Dow Jones down 0.63% to 52,093.11, leaving all three benchmarks down roughly 1% week-to-date heading into today's Fed decision. Escalating Gulf tensions and a drone strike that knocked out Saudi Arabia's East-West pipeline pushed WTI crude up near $105 a barrel, tightening global supply and prompting Saudi Arabia to cancel some September crude deliveries to Europe. Energy led sectors on the oil spike while Technology and Real Estate lagged as the surge in yields hit growth stocks and rate-sensitive names hardest. The VIX closed at 17.01 and the CNN Fear & Greed Index held at 30 (Fear) as traders braced for this afternoon's FOMC announcement. Futures now price roughly a 93% chance of a 25-basis-point hike to 3.75%-4.00%, the first increase since 2023, following last week's hot August CPI, up 3.4% year-over-year, and a stronger-than-expected August jobs report. Attention turns to Thursday's jobless claims and housing starts data and Lennar's earnings before the open for a fresh read on how surging mortgage-linked yields are hitting housing and labor markets, with the Fed's decision due at 2 p.m. ET today.