Morning Briefing: Falling Oil and Yields Help S&P 500 Stabilize Before the Fed

Stocks have stabilized after S&P 500 futures were down more than 50 points overnight, with falling oil and a pullback in Treasury yields helping erase most of that weakness before the open. The bigger question now is whether that relief can hold through tomorrow’s Federal Reserve decision, especially with the 10 Year Treasury Yield still near 5%, oil above $100, and several major markets sitting at important technical levels.

Data as of: September 15, 2026

In One Minute

The Federal Reserve is expected to raise rates by 25 basis points tomorrow at 2:00 PM ET, with the probability now at 92.5%, so the hike itself is largely priced in. The more important issue is what Kevin Warsh says about future hikes. The United States 10 Year Treasury Yield (US10Y) reached 5.04%, territory not seen since 2007, before pulling back to 4.99% as West Texas Intermediate Crude Oil (WTI) fell from $104.23 to around $101.35. That reversal helped the S&P 500 Index (SPX) recover from an overnight decline of more than 50 points. I remain bullish on the S&P 500 as long as 7,570 to 7,575 holds.

The Setup

The market is trading around one main relationship right now: oil, Treasury yields, and Federal Reserve policy.

When oil moved higher overnight, Treasury yields followed, and stocks sold off. When oil reversed, yields came back down, and stocks recovered. That relationship matters because higher energy prices keep inflation pressure alive, while higher Treasury yields raise borrowing costs across the economy.

The 10 Year Treasury Yield reached 5.04%, pushing above the important October 2023 area and into levels last seen in 2007. It then reversed to 4.99%, creating the possibility of a long upper wick on the daily chart.

I also see the potential for a double top in the 10 Year Yield after it briefly pushed above the previous high and then pulled back. If that develops, yields could continue easing after the Federal Reserve decision.

There is a counterintuitive part of this setup. A more aggressive Federal Reserve does not automatically mean the 10 Year Yield has to rise. If the Fed convinces bond buyers that it is serious about controlling inflation, investors may become more comfortable owning longer-term Treasury debt at lower yields.

The S&P 500 continues to hold up remarkably well considering oil remains above $100, Treasury yields have moved through 5%, and the index is still only about 2% to 3% below its all-time highs.

The key support remains 7,570 to 7,575. As long as that area holds, I stay bullish. A daily close below roughly 7,570 would move me toward a neutral view.

The broader S&P 500 structure also remains constructive. The recent decline has formed a downward-sloping parallel structure after a sharp move higher. That type of consolidation can remain bullish as long as the lower boundary and major support continue to hold.

The SPDR S&P 500 ETF Trust (SPY) reflected that same overnight recovery as oil and yields reversed.

Positioning adds another layer. The S&P 500 put-call ratio is extremely elevated, meaning a large number of traders are positioned for downside. Heavy bearish positioning can become supportive if the expected decline does not happen because traders may be forced to unwind those positions.

The U.S. Dollar Index (DXY) is fractionally higher but remains stuck in a tight range. The dollar is consolidating below an ascending trend line that previously broke, so the longer-term technical pressure still leans toward eventual downside, although the immediate action remains choppy.

What Changed

Oil became the biggest driver overnight.

West Texas Intermediate Crude Oil reached $104.23 before reversing to around $101.35 in the premarket. That reversal happened near a major resistance trend line that has controlled several important highs.

When the conflict with Iran began, oil gapped above that line and accelerated higher. The same level later became support. Once support broke, it turned back into resistance, and oil is now testing that resistance again.

I still believe oil is closer to a high than a low. I could see a move toward $90, or potentially into the mid $80s, before the midterm elections. I am not assuming a return into the $70s.

The economic pressure from energy remains significant. Diesel is above $6 per gallon, which adds inflation pressure and takes more disposable income away from consumers. When households are paying more for food, energy, and housing, optional spending becomes easier to cut.

Gold Spot Price (XAUUSD) has broken down and triggered a head and shoulders pattern. That pattern stays active unless gold gets one daily close back above the neckline. If Treasury yields pull back, gold could rally and invalidate that bearish pattern.

Silver Spot Price (XAGUSD) also closed below its neckline. Silver is positive today, but it has not reclaimed the neckline yet, so the breakdown remains active for now.

Henry Hub Natural Gas Futures (NG) are moving sharply higher, with $3 now the main technical level.

The chart itself is moderately bullish, but the fundamental story is stronger. Seasonal demand is part of the setup, and growing electricity demand from data centers could become an important longer-term driver.

If natural gas clears $3, I could see a sharper move toward $3.50 to $4 in the near term.

NVIDIA Corporation (NVDA) is bouncing after a sharp selloff over the last few sessions and has now filled an important gap.

The larger chart remains inside an ascending structure where the upper and lower trend lines are beginning to converge slightly. The important question is whether NVIDIA rotates back toward the highs or falls toward the lower trend line. A break below that lower boundary would be the development I would not want to see.

Meta Platforms, Inc. (META) is also at an important decision point. Meta is testing a descending trend line connecting major highs from September 2025, January 2026, July 2026, and the most recent high.

That resistance line has already been tested several times. Each test can weaken resistance, so I would not treat this as a high-probability short anymore. At this point, it is closer to a 50 50 setup, which means I would rather wait for confirmation.

Lennar Corporation (LEN) looks more constructive in the short term.

The stock is sitting near a trend line dating back to 2023. Price previously gapped above that line and has returned to it several times as support.

If Treasury yields begin falling after the Fed decision, housing stocks could get some relief. My upside swing target on Lennar is around $88 over the next several weeks.

I am not making a long-term bullish call on housing. This is a shorter term setup based on support holding and the possibility that longer term rates begin to ease.

Dave & Buster's Entertainment, Inc. (PLAY) is showing the other side of the consumer story.

The stock dropped sharply after earnings and is sitting near a multidecade low. That weakness fits the broader pressure on discretionary spending as consumers deal with higher food, energy, housing, and transportation costs.

Technically, connecting the previous pivot lows gives me a possible target around a pierce below $7.

That would still be a very high-risk area because Dave & Buster's is now a smaller, thinner stock with greater volatility. Below $7 could become interesting for a short-term trade, but the risk is materially higher.

Digital Assets and Crypto

Bitcoin (BTC) is pulling back after a lot of the recent movement centered on the CLARITY Act and the vote taking place around that legislation.

The most important part of the Bitcoin setup is still technical.

Bitcoin needs to hold its current major support zone. As long as that area holds, the chart remains an upward move followed by consolidation, which keeps the structure bullish.

If Bitcoin breaks that support zone below, the setup changes. At that point, I would favor a much larger decline, potentially toward approximately $67,000.

For now, Bitcoin continues to hold its bullish bias, and probability still favors the upside while that support remains intact. The next step is simply watching how price reacts around support as the market processes developments around the CLARITY Act.

Why It Matters

The important thing here is that several markets are connected.

If oil keeps falling, inflation pressure eases at the margin and Treasury yields may have room to come down. Lower yields would take some pressure off equities, housing stocks, gold, and other rate-sensitive areas.

If oil turns back higher and the 10 Year Yield pushes decisively above 5% again, that pressure comes right back.

That is why tomorrow’s Federal Reserve decision matters less for the 25 basis point hike itself and more for what happens to expectations afterward.

The market already assigns the hike a 92.5% probability. What investors need to hear next is whether more hikes are coming and whether the Federal Reserve can convince the bond market that inflation remains under control.

Key Levels

The two levels I care about most for the broader market are 7,570 to 7,575 on the S&P 500 and the 5% area on the 10 Year Treasury Yield. Those two areas will tell us whether this market is absorbing the pressure or beginning to lose its footing.

Bull Case

The bullish case starts with the S&P 500 holding 7,570 to 7,575.

If oil continues backing away from resistance, the 10 Year Yield could remain below 5%, and the potential double top could begin working. That would reduce pressure on stocks and could help rate-sensitive areas such as housing.

Lennar could then continue bouncing toward $88.

Gold could also recover if yields fall, especially if it closes back above its neckline and invalidates the head and shoulders pattern. Silver would need to reclaim its own neckline to improve its setup.

Natural gas remains constructive, and a breakout above $3 could open the door toward $3.50 to $4.

NVIDIA remains fine as long as the lower boundary of its ascending structure holds. Meta could break its descending resistance because repeated tests have weakened that line.

Bitcoin remains bullish while its major support zone holds, with probability continuing to favor the upside.

Bear Case

The bearish case begins if the S&P 500 closes below roughly 7,570. That would weaken the current bullish structure and move the market toward a more neutral stance.

A renewed move higher in oil could push inflation concerns and Treasury yields back up. If the 10 Year Yield moves decisively above the recent 5.04% high instead of confirming the potential double top, pressure on equities and rate-sensitive assets could return quickly.

Gold remains vulnerable while the head and shoulders breakdown stays active. Silver remains vulnerable while it trades below its neckline.

NVIDIA becomes more concerning if the lower trend line breaks.

Dave & Buster's remains under significant pressure, with the chart pointing toward a possible pierce below $7.

Bitcoin becomes materially weaker if its current support zone fails. If that happens, approximately $67,000 becomes the major downside level to watch.

What to Watch Next

Tomorrow’s 2:00 PM ET Federal Reserve decision is the main catalyst, but I will be watching the reaction after the expected 25 basis point hike, not just the hike itself.

The biggest question is what Kevin Warsh says about future rate increases.

I also want to see whether the 10 Year Yield remains below 5% after reaching 5.04%, whether oil continues backing away from $104.23, and whether the S&P 500 keeps holding 7,570 to 7,575.

In commodities, watch whether gold can close back above its neckline, whether silver can reclaim its neckline, and whether natural gas can break $3.

For individual stocks, NVIDIA needs to hold its lower trend line, Meta needs to resolve its descending resistance, Lennar needs to hold its long-term support, and Dave & Buster's remains a high-risk setup near $7.

In crypto, Bitcoin's current support zone remains the line between maintaining the bullish structure and opening the door toward $67,000.

Bottom Line

The market is holding together because falling oil has helped pull Treasury yields back below 5%, giving stocks room to recover ahead of the Federal Reserve.

The S&P 500 remains bullish above 7,570 to 7,575, but tomorrow’s reaction in oil and the 10 Year Treasury Yield will matter more than simply checking whether the Fed delivers the expected rate hike.

I am staying patient here. Let the Fed speak, let yields and oil react, and let the major support and resistance levels confirm the next move before chasing it.