Rising Yields and Oil Pressure Stocks Ahead of the Fed Decision

Stocks are under pressure today as rising Treasury yields and higher oil prices weigh on the broader market ahead of tomorrow’s Federal Reserve decision. The main conflict is straightforward: if yields and oil keep climbing, stocks face more pressure, but even a modest cooling in the 10 Year Treasury Yield could give equities and precious metals some room to recover.

In One Minute

SPDR S&P 500 ETF Trust (SPY) finished down 0.46%, while Invesco QQQ Trust (QQQ) fell 0.65% as the U.S. 10 Year Treasury Yield (US10Y) pushed through the important 5.021% 2023 level. The market is assigning roughly a 92% probability of a Federal Reserve rate hike tomorrow, so the bigger issue is what the Fed says about future hikes. Oil is adding another layer of pressure, with West Texas Intermediate Crude Oil (WTI) overbought and approaching $108.26, while its larger inverse head-andpshoulders setup still points toward $116. The immediate opportunity is that yields are also overbought after eight consecutive green candles, so even a short period of consolidation could give stocks, gold, and silver some breathing room.

The Setup

The market is being driven by three things right now: Treasury yields, Federal Reserve policy, and oil.

The U.S. 10 Year Treasury Yield has moved higher quickly enough to push its Relative Strength Index above 70, which puts it in an overbought condition in the near term. At the same time, crude oil is also above the 70 RSI threshold.

That creates a difficult setup for stocks because both higher yields and higher energy prices tighten financial conditions. But it also creates the possibility of relief if either one begins consolidating.

The Federal Reserve decision is the immediate catalyst. With roughly a 92% probability of a rate increase, the hike itself is largely expected. What matters more is the language surrounding additional rate increases.

What Changed

SPY closed below the previous all-time high pivot that had been acting as support during the recent September declines. That area had already been breached on September 10 and again yesterday, but buyers managed to recover it before the close. Today, that recovery failed.

If SPY closes below today’s red candle tomorrow, the probability increases that this breakdown remains active. The next important support is the rising trend line near $749. That line has already produced three major pivots, so another test could create a near-term bounce or at least slow the selling pressure.

If SPY turns higher instead, the declining trend line above price becomes the next obstacle.

QQQ also weakened, finishing down 0.65% and closing near the lows of the day after yesterday’s recovery. Most of the selling came early, followed by quieter sideways action during the afternoon. That type of slowdown is common ahead of a major Federal Reserve decision.

VanEck Semiconductor ETF (SMH) was one of the few areas to finish positive, gaining 0.11%, but the technical picture is still not especially strong. SMH is sitting around the 50% area of its parallel channel rather than bouncing decisively away from it.

If that midpoint fails, the lower portion of the channel becomes the next destination around $509, with another nearby reference at $50363 from July 29. That creates a broader support zone between those levels. To the upside, the first important resistance is the declining trend line around $555.17.

The 10 Year Treasury Yield remains the major macro chart.

It pushed above the 5.021% 2023 pivot today and has now produced eight consecutive green candles. The move is stretched enough to put RSI above 70.

The near-term range is 5.021% to 4.809%. I do not need to see the yield fall all the way to 4.809% for stocks to get relief. Even a few down days or a period of consolidation could help equities.

Longer term, however, the yield picture is still potentially bullish. A Fibonacci sequence running from 1981 through the COVID low shows the 10 Year Yield above the 2.36 Fibonacci retracement level, with the next major level at the 382 retracement around 6.249%.

So a near-term pullback in yields does not necessarily mean the larger move is finished. If the longer term advance resumes, we could eventually be talking about a 6% 10 Year Treasury Yield, and that would continue putting pressure on stocks and precious metals.

Gold is sitting in a similar decision area.

Gold slipped below the bottom of an inclining parallel channel that dates back to April 2025, but it has not confirmed the breakdown. Price has not extended far enough below the channel to make the move decisive.

The key channel area is around $4,312. If yields keep rising, the next near-term support is around $4,193. If gold recovers back inside the parallel channel, the next important medium-term resistance is around $4,575.

Silver is also below an inclining trend line after yesterday’s break, but again, there is no clean confirmation yet. The potential head and shoulders pattern remains active only if price extends below the neckline. A move back above that neckline would weaken or cancel the setup.

West Texas Intermediate Crude Oil continues moving higher after only two days of consolidation.

Oil broke above the neckline of an inverse head and shoulders pattern on September 2, and that pattern carries a measured target of $116.

The daily RSI is already above 70, so oil is overbought. The next resistance is $108.26, which could become a natural area for profit taking or a technical pullback. Near-term support has moved up to $93.19.

The complication is the Middle East. With no peace resolution and neither side agreeing to come to the table, oil can remain overbought longer than expected and continue toward $116.

The faster oil moves higher, the greater the risk of a sharp reversal. We have already seen that pattern during this conflict, with fast moves up followed by equally fast moves down.

Natural Gas (NG) has moved the other way technically and produced a strong recovery.

It closed below an important support level on September 9 but never confirmed the breakdown. Instead, price reversed and pushed higher. The setup remains more constructive heading into colder months, especially with additional demand tied to data centers.

Natural gas is now testing the upper range of its recent pivots. The next destination is around $3.15, followed by $3.24.

Amazon.com, Inc. (AMZN) remains under pressure inside its larger inclining parallel channel dating back to 2023.

Amazon initially slipped below the 50% area of the channel without confirming the break, recovered, then failed to extend high enough to turn that area into reliable support. It later broke down again, retraced toward the 50% area, and was rejected.

The next important support is around $239, based on an inclining trend line connecting the March 27 and July pivot lows. A bounce from that area could send Amazon back toward the 50% area of the parallel channel near $258.22.

Meta Platforms, Inc. (META) has confirmed a breakout.

Meta pushed above a declining trend line that had already been tested three times. Yesterday closed above it, and today closed above yesterday’s candle.

The next upside reference is around $686. A further push higher would create more breathing room and make a future pullback toward $658 more attractive as a possible continuation setup.

The challenge is that Meta is already overbought. Ideally, price either pushes slightly higher or consolidates long enough to work off that condition before giving us a cleaner pullback.

Roblox Corporation (RBLX) is also attempting a breakout, but it has not confirmed yet.

The confirmation level is a close above the September 14 high. If that happens, a pullback toward the inclining trend line around $46.31 could become a continuation opportunity. A more conservative retracement would bring price toward the top of the parallel channel around $44.

Above that, $58 is the important pivot. A move through $58 could open the door toward $66.21.

DICK’S Sporting Goods, Inc. (DKS) remains weak after its earnings decline.

A Fibonacci retracement drawn from the COVID lows through the 2025 highs has price trading comfortably below the 50% retracement at $134.40. That raises the possibility of a move toward the 61.8% retracement at $105.57.

DKS did produce a strong technical bounce of approximately 17%, but the original decline was close to 30%. That rebound now appears to be losing momentum, with price back near the lower portion of its recent pivot range.

If weakness continues, $105.57 becomes the next major downside level.

Skyworks Solutions, Inc. (SWKS) is a good example of a clean breakout and retracement setup.

Price broke above a declining trend line drawn from the major pivot high through the May 27 pivot. Friday then pushed higher and confirmed the breakout.

Skyworks later pulled back toward that same trend line. Price spent only one day closing underneath it and never produced another confirming close lower. Instead, it reversed and rallied back toward the breakout highs.

A conservative entry around $79, with roughly 50 cents referenced around that area, produced approximately a 13% move in the stock by today. Call options tied to the move could have produced gains around 30% to 40%.

The important part of that setup is the structure: breakout, confirmation, retracement, failed breakdown, then continuation.

Why It Matters

The relationship between yields, oil, stocks, and precious metals is doing most of the work right now.

If the 10 Year Yield cools after this rapid eight-day advance, equities could catch a bounce and gold and silver could recover from their current breakdown attempts.

If yields keep climbing instead, particularly if the longer-term move begins pushing toward the 6.249% Fibonacci level, pressure on stocks and metals increases.

Oil adds another inflationary problem. A move through $108.26 and toward $116 would keep that pressure elevated, while a technical pullback would remove at least some of it.

Key Levels

The three levels that matter most to the broader market are 5.021% on the 10 Year Yield, $108.26 on oil, and the $749 rising support area on SPY. Those three charts will tell us whether pressure is easing or building.

Bull Case

The bullish path starts with Treasury yields cooling.

If the 10 Year Yield consolidates after this eight-day advance, stocks get some breathing room. SPY could stabilize before reaching the $749 trend line, QQQ could recover after the Federal Reserve decision, and SMH could hold its 50% channel area rather than breaking toward $509.

Gold could reclaim the $4,312 channel area and begin working toward $4,575, while silver could move back above its neckline and cancel the near-term head-and-shoulders breakdown.

Natural gas already has a constructive failed breakdown and can continue toward $3.15 and $3.24.

Meta remains in breakout mode, with $686 as the next upside reference. Roblox becomes more constructive if it closes above the September 14 high, and Amazon could bounce if $239 holds.

Bear Case

The bearish path is continued pressure from yields and oil.

If the 10 Year Yield keeps moving higher rather than consolidating, the longer-term setup keeps the 6.249% Fibonacci level in play. That would increase pressure on stocks and precious metals.

If SPY confirms today’s breakdown with another weak close, the rising trend line near $749 becomes the next support test.

SMH could fall toward $509 to $50363 if the 50% channel area fails.

Gold would bring $4,193 into focus if the channel breakdown confirms, while silver would strengthen its head and shoulders breakdown if it extends below the neckline.

Oil remains another major risk. A clean move through $108.26 could keep the inverse head and shoulders target of $116 active.

DKS remains vulnerable toward $105.57, and Amazon remains under pressure unless buyers defend the $239 trend line.

What to Watch Next

Tomorrow’s Federal Reserve decision is the immediate catalyst.

The rate hike itself is largely expected with roughly a 92% probability, so I will be watching the language around future hikes and, more importantly, how the 10 Year Treasury Yield reacts.

If yields pull back or consolidate, stocks and precious metals could catch relief.

If yields push higher again, pressure remains.

I also want to see whether WTI finally reacts near $108.26, whether SPY confirms or rejects its current breakdown, whether SMH holds the midpoint of its channel, whether gold and silver reclaim their broken technical structures, and whether Roblox can finally confirm its breakout above the September 14 high.

Bottom Line

The most important market relationship remains the same: rising Treasury yields and rising oil are pressuring stocks, while any cooling in either one could give risk assets room to recover. With the 10 Year Yield overbought above 5.021%, oil approaching $108.26, and SPY sitting near an important breakdown area, this is a market where patience matters more than prediction.

Wait for the levels to confirm the move before chasing it.