Falling Oil Cushions Stocks as Treasury Yields Climb Above 2007 Highs

Stocks held up with only modest index declines as the United States 10 Year Treasury Yield (US10Y) climbed above its 2007 high. Lower West Texas Intermediate Crude Oil (USOIL) prices helped offset that pressure, while tomorrow’s Micron Technology, Inc. (MU) earnings could determine whether several technology breakouts hold.

In One Minute

The market is showing resilience, but higher yields remain the main pressure point. If yields settle or pull back, stocks and precious metals could get some breathing room. I’m watching the yield range between 5.021% and 5.289%, alongside Micron’s earnings and guidance tomorrow after the close. Several stocks have constructive patterns, but the opportunity depends on support holding and breakouts following through.

The Setup

The 10 Year Treasury yield reached 5.293% before retreating, piercing its June 2007 high. The daily candle finished with a narrow body, although it was not quite a doji, where the opening and closing levels are nearly equal.

The daily Relative Strength Index, or RSI, has moved in and out of overbought territory. Readings above 70 suggest the advance is stretched. That supports the possibility of consolidation or a pullback, although it does not establish that yields have peaked.

I’m watching 5.021% to 5.289% as the potential consolidation range. A decline toward 5.021% would be a meaningful retreat. Small downticks in yields have been met with stock buying, so further easing could support the next round of breakout attempts.

The Job Openings and Labor Turnover Survey, known as JOLTS, came in weaker than expected. Personal Consumption Expenditures data arrives tomorrow, followed by jobs data later this week. Those reports will give the Federal Reserve more information as it considers potential rate hikes later this year. The rise in yields suggests markets may already be pricing in some of that possibility.

What Changed

The S&P 500 Index (SPX), tracked through the SPDR S&P 500 ETF Trust (SPY), absorbed the yield increase relatively well. SPY fell 0.18%, closed at $764.20, and gained about $0.50 after hours.

Price stayed within its recent range without approaching the declining trendline it had interacted with during about five of the previous six trading sessions. If selling continues, the previous pivot high at $760.40 is the support I’m watching. To extend the advance, SPY still needs to clear that declining trendline.

The Nasdaq Composite Index (IXIC) declined, but the selling was less severe than the rise in yields might have suggested.

Price remains above its previously broken declining trendline and has avoided touching that support during the past two sessions. A return to the 27,000 range would create more distance from support. That matters because repeated tests can weaken a level.

The potential move toward 28,000 remains in place. First, I want to see the index hold its breakout and move away from the trendline beneath it.

The Russell 2000 Index (RUT), tracked through the iShares Russell 2000 ETF (IWM), is approaching a potentially useful support area. About 64% of the companies in this group are unprofitable and depend heavily on borrowing to fund their operations. Higher interest rates put particular pressure on those businesses.

IWM has stayed within a rising parallel channel since the April 2025 lows, touching its lower boundary only twice. It is now heading toward that boundary around $274.52. Just below it, the 50% Fibonacci retracement of the advance from the March 30, 2026 low sits at $271.94. That also aligns with the January pivot high, bringing multiple support references together.

The daily RSI is near 31.05, approaching the oversold threshold below 30. A bounce could develop around this area, even if price briefly pierces the channel. A pullback in yields would help that setup.

Oil declined toward the September 22 and September 23 pivot lows, helping offset the pressure from rising yields.

The next support is the bottom of the parallel channel around $87.73, which could be tested tomorrow. As long as price remains above its previously broken declining trendline, the breakout still carries a measured move target of $116.

That target is a projection from the chart pattern. The immediate test is whether buyers respond at the lower channel boundary.

Natural Gas (NG) sold off sharply as milder weather forecasts, weaker demand during the transition between seasons, strong production, and abundant, increasing storage weighed on the market. Forecasts also pointed toward a milder start to winter in the Northern Hemisphere. Resolved infrastructure issues in West Virginia added to the selling pressure.

Price stopped at the top of the recent consolidation area, where the earlier breakout began. That gives buyers a support level to work with, but the decline may not be finished.

The earlier breakout produced one strong daily candle without a sustained extension. Price subsequently gapped beneath the trendline, showing why an initial breakout needs follow-through.

I prefer watching the return to support over chasing that first move. If current support fails, the next level is $2.99, about $0.09 lower.

Gold (XAUUSD) rebounded after the previous session’s sharp breakdown. The decline stopped short of $4,104, leaving a small gap above that level before price recovered as yields eased slightly.

The broken trendline is now nearby resistance. However, the breakdown consisted of one large red candle without a sustained extension lower. Gold could return to that trendline, pause during the session, and potentially recover above it.

I’m watching the next few sessions to see whether the rebound can reclaim that level.

Silver (XAGUSD) recovered above $61.30 after breaking through that support during the previous session. Buyers responded, although the recovery came after the initial support test. The next important level is $63, near the lower consolidation area. Getting above it would make the near-term outlook more bullish.

My working expectation remains a move toward $63 followed by rejection. A decline toward the $50 area is still possible over the near to medium term and could create an interesting buying opportunity.

The VanEck Semiconductor ETF (SMH) continues to challenge the 0.618 Fibonacci retracement at $607.58. It opened above that level and pushed higher, but again failed to close above it.

The broader structure remains constructive. SMH has broken above a declining trendline, cleared a parallel channel, and maintained its position above key moving averages. The 50-period moving average is comfortably below the 20-period average, with increasing separation between them. The consolidation following those breakouts is encouraging. A convincing close through resistance remains the next step, and Micron’s earnings could provide the catalyst.

Micron remains above its horizontal breakout level. The stock is currently in breakout mode, but tomorrow’s earnings report could quickly change that. I anticipate a strong report, with guidance especially important to whether the move continues. A favorable reaction could support Micron and related stocks. A disappointing reaction could undermine the breakout.

Seagate Technology Holdings plc (STX) is consolidating near a potential breakout area without making a decisive move. The setup remains in place, with Micron’s results offering a test for the broader group. A pullback in yields could also give Seagate more room to advance.

Western Digital Corporation (WDC) is consolidating along a declining trendline and attempting to build momentum for a breakout. The move remains unconfirmed. Micron’s earnings and guidance could help determine whether Western Digital clears that barrier.

Sandisk Corporation (SNDK) has already broken above its key trendline and held above it during the past two trading sessions. The pattern carries a measured move target of $2,600. Micron’s report could help sustain that advance, but a failed breakout could send SanDisk back toward the bottom of its parallel channel.

Holding above the trendline is encouraging. The earnings reaction still needs to support that strength.

Lumentum Holdings Inc. (LITE) recorded another daily close above its declining trendline. It has traded within a rising parallel channel since October of last year, and this latest attempt represents the ninth contact with resistance.

A daily close above the line also occurred on September 9, so I still want confirmation. Micron’s report tomorrow afternoon could provide the catalyst, given Lumentum’s exposure to the artificial intelligence data center buildout.

If the breakout confirms, a pullback toward $952 could offer an entry at support. The upside reference is the midpoint, or 50% area, of the rising channel above $1,100, putting new all-time highs in view.

CarMax, Inc. (KMX) beat earnings per share expectations by 58% and revenue expectations by 11% before the market opened. The stock rallied sharply, then surrendered nearly all its gains and closed at $59.23. The weekly chart still shows a breakout above a declining trendline originating in November 2021 and connecting to the February pivot from last year.

Before earnings, the daily chart had already completed a breakout and pullback. Price consolidated around the trendline, with closes alternating above and below it without a sustained move back into the former pattern. That established the breakout, pullback, and bounce sequence.

The earnings rally met selling near the previous pivots at $63.29. Significant resistance remains around $64. CarMax is still in breakout mode, but giving back most of the rally is a concern. I want to see price extend beyond those pivots and then consolidate, rather than repeatedly stall against them.

Bloom Energy Corporation (BE) gained 10.8%, but surrendered its gains above $300 and closed at $291.25. The stock has been building a bullish consolidation since September 8. Attempts to clear the midpoint of its parallel channel occurred on September 7, September 8, September 25, and again during the latest session.

Repeated tests can weaken that resistance and improve the chance of a breakout. If Bloom Energy secures a position above the midpoint, the next resistance is the rising trendline around $314.94. The top of the channel sits at $400, which remains the anticipated upside destination if the breakout holds. The retreat from above $300 keeps confirmation important.

DraftKings Inc. (DKNG) fell 7.42% on news of a 3% market share in the sports betting prediction field during the first week of the National Football League season. The decline is bringing the price toward overlapping support. A test of the middle pivot in a W-shaped formation produced a bounce in April, and additional support areas are now approaching.

The main setup combines a rising trendline with the 0.786 Fibonacci retracement at $19.15. That retracement runs from the 2022 pivot low to the subsequent major high, while the trendline connects major lows.

The daily RSI is 29.15, below the oversold threshold of 30. The weekly RSI remains at 34, leaving room for further weakness before that longer timeframe becomes oversold.

Price could fall further or briefly pierce support before bouncing. If $19.15 fails, the next lower Fibonacci reference is the 0.886 retracement at $14.77. I’m interested in the potential rebound, but I want to see how price responds at support. Oversold readings alone do not establish that the decline is finished.

Digital Assets and Crypto

Bitcoin (BTC) gained 0.15% and remained largely sideways. The main level I’m watching is the rising weekly trendline at $89,250. That line previously served as the neckline of a head and shoulders pattern.

A move above it would make the near-term outlook substantially more bullish. Until then, Bitcoin is still consolidating and attempting to build enough momentum to reach and clear that barrier. The stronger bullish signal requires price to get above $89,250.

Why It Matters

The relationship between yields and stocks is central here. Higher borrowing costs pressure companies that depend on financing, making IWM particularly sensitive. If yields ease, smaller companies and technology stocks approaching breakouts could get some relief. Precious metals could also benefit.

Micron’s guidance adds another test. Several related stocks are holding breakouts or consolidating near resistance, so the earnings reaction could determine whether those patterns extend or fail.

Key Levels

The yield range and Micron’s earnings are the main tests for the broader stock outlook. Bitcoin has its own clear confirmation level at $89,250.

Bull Case

The constructive path starts with yields settling or pulling back. That could support a rebound in IWM near its overlapping support and give technology stocks room to advance. SPY needs to clear its declining trendline, while the Nasdaq needs to hold its breakout and regain the 27,000 range. SMH needs a convincing close above $607.58, supported by a favorable Micron earnings reaction.

Seagate and Western Digital need to complete their breakout attempts. Micron and SanDisk need to hold theirs, while Lumentum needs confirmation before a pullback toward $952 becomes the intended setup. Bloom Energy needs to secure its channel midpoint, and CarMax needs to extend beyond its resistance pivots. DraftKings needs buyers to respond at support.

Gold could reclaim its broken trendline, and silver would become more bullish above $63. Oil retains its $116 projection while holding above its broken trendline. Natural gas needs its support test to hold, and Bitcoin needs to clear $89,250.

Bear Case

If yields remain elevated or advance further, borrowing pressure stays in place, particularly for smaller companies. Repeated tests of Nasdaq support would also increase the risk of a break.

SPY’s next support is $760.40. A disappointing Micron reaction could weaken the technology setups, including SanDisk’s breakout and its position within the parallel channel. CarMax’s lost earnings rally and Bloom Energy’s retreat from above $300 show that sellers remain active.

Silver could be rejected at $63 and decline toward $50. Natural gas could lose current support and test $2.99. DraftKings could pierce $19.15, with $14.77 becoming the next lower Fibonacci reference if that level fails. Bitcoin remains in consolidation until it clears its weekly barrier.

What to Watch Next

Tomorrow brings Personal Consumption Expenditures data and Micron’s earnings after the close. Jobs data follows later this week. I’m watching whether yields settle within the identified range, whether oil tests $87.73, and whether IWM attracts buyers near its channel boundary and Fibonacci support.

For technology, watch the earnings reaction and whether the breakout attempts produce sustained closes above resistance. For metals, watch gold’s broken trendline and silver at $63. DraftKings needs a response at support, while Bitcoin still needs to clear $89,250.

Bottom Line

Whether yields ease is the main relationship controlling this setup, with Micron’s earnings testing whether technology can follow through. Let support hold, and breakouts confirm before committing to the next move.