Market Data / Market note
Market On Close: Rising Treasury Yields Pressure Stocks as CPI Becomes the Next Test
Can Stocks Hold Support as CPI Tests Surging Treasury Yields?
Stocks finished lower today as Treasury yields surged after the PPI report, with diesel costs up about 24% and transportation and freight costs up a little over 2%. The bigger question now is whether tomorrow’s CPI keeps yields climbing toward 5.021% and pushes stocks and metals through support, or whether stretched yields finally give the market room to stabilize.
In One Minute
The S&P 500 Index (SPX) fell 0.6%, the Invesco QQQ Trust (QQQ) fell 1.06%, and the VanEck Semiconductor ETF (SMH) dropped 2.44% as the U.S. 10 Year Treasury Yield (US10Y) reached 4.963%. CPI at 8:30 AM ET tomorrow is the main catalyst. For SPX, 755 and 747 are key support, while 760.40 is near-term resistance. Oil remains strong, while gold and silver are under pressure.
The Setup
PPI came in mainly in line, but diesel costs jumped about 24%, and transportation and freight costs rose a little over 2%. If those costs stay high, they can eventually reach consumers. Yields responded sharply, and that pressure spread into stocks, especially smaller companies and semiconductors.
The iShares Russell 2000 ETF (IWM) confirmed below the 50% area of its rising parallel channel. US10Y reached 4.963%, with daily RSI at 72.76, above the 70 overbought threshold, and resistance at 5.021%.
What Changed
SPX filled its gap and finished with a doji. QQQ also filled its gap and closed near the lower part of its range.
Gold Spot U.S. Dollar (XAUUSD) broke below $4,333. Silver Spot U.S. Dollar (XAGUSD) fell 5.5%. West Texas Intermediate Crude Oil (USOIL) remains one of the strongest moves, with an inverse head-and-shoulders measured target of $116.30 and next resistance at $108.26, although it is overbought in the near term.
Natural Gas (NATGAS) fell to $2.83 before recovering. It still needs a confirming move away from support, with resistance at $3.12 and $3.23.
Skyworks Solutions, Inc. (SWKS) jumped 9.79%, with daily RSI at 80.29 and a $90.90 resistance target after confirmation. Take Two Interactive Software, Inc. (TTWO) gained 2.76%, with support around $204, where the 786 Fibonacci retracement aligns, and $233 as an upside test. NVIDIA Corporation (NVDA) needs a daily close tomorrow above $219.67, with support at $219.39 and $207.30. Oracle Corporation (ORCL) reached $163.59 after hours and traded as high as $167.69.
Bitcoin (BTC), Tether Gold (XAUT), and other crypto assets have also been hot recently.
Why It Matters
The market is trading around one relationship: higher inflation pressure can keep yields elevated, and higher yields can pressure stocks, small caps, semiconductors, gold, and silver. The 10-year yield is already technically stretched, so what I’m watching tomorrow is not just the CPI number, but how yields react to it.
Key Levels
| Asset | Support | Resistance or Target | What Matters |
|---|---|---|---|
| SPX | 755, 747 | 760.40 | Open above or below 760.40 |
| QQQ | $700, $695.25 | Watch the gap and $700 | |
| IWM | $286.58 | 50% channel area | A gap below support increases downside risk |
| US10Y | 5.021% | High 4.963%, RSI 72.76 | |
| Gold | $4,305, $4,300, $4,188, $4,104, $4,100 | $4,333 | Support is being retested |
| Silver | $63.26, $61.03 | $63.26 is the first support | |
| USOIL | $108.26, $116.30 | Inverse head and shoulders |
Bull Case
A positive CPI reaction could help SPX reclaim 760.40 and support a bounce in IWM. If the 10-year yield starts consolidating after this stretched move, that would also reduce pressure on rate-sensitive areas. Oil can continue toward $108.26 and potentially $116.30 if its current structure holds.
Bear Case
If CPI keeps yields moving higher, 5.021% becomes the next major test. SPX could move toward 7550 and 7470, QQQ toward $700 and $695.25, and IWM could weaken below $286.58. Gold risks $4,300, then $4,188 and $4,104, while silver risks $63.26 and then $61.03.
What to Watch Next
The main catalyst is the August Consumer Price Index at 8:30 AM ET tomorrow, followed by the Federal Open Market Committee meeting on September 15 and 16. The bigger signal will be whether yields continue higher or start consolidating after reaching overbought territory.
Supporting links: Bureau of Labor Statistics CPI release | Federal Reserve September calendar
Bottom Line
Stocks are under pressure because yields are moving fast, and tomorrow’s CPI is the next test. If the 10-year yield keeps pressing toward 5.021%, support across stocks and metals stays vulnerable. If yields cool, the market has room to stabilize. Patience around these levels matters more than chasing the first move.