EB Daily Market Report - Brief Update - Wednesday, September 9, 2026

Good afternoon!

I just wanted to send out a quick update on where the market stands as we approach two key economic reports - the PPI to be released tomorrow morning and the CPI to be released on Friday morning.

The 10-year treasury yield ($TNX) spiked to near 4.86% earlier today, rapidly approaching critical yield resistance at 5.00%.  As a reminder, the 10-year treasury yield serves as a proxy for mortgage rates.  There's a variable gap between the two, usually between 1.5% and 2.5%, but generally speaking, as the 10-year treasury yield moves, mortgage rates tend to move in the same direction and by about the same amount - again, with an additional variable spread.

The 10-year treasury yield last moved above 5.00% in 2007, so nearly two decades ago.  And, in our recent past, spikes in the TNX to the 4.75%-5.00% range have triggered periods of selling in U.S. stocks.  Therefore, it wasn't too surprising that the S&P 500 and NASDAQ 100 sold off earlier with the TNX spike, and then started to rally a bit when the TNX fell back from that earlier high.  Still, at last check, the TNX was 4.835% and has me super cautious in the near-term with U.S. equities. The S&P 500 has key price support at 7609.78, so that's the first important level to watch. Currently, the S&P 500 is trading at 7642, down over 100 points from last Thursday's close, but still above support.

As you might suspect, the rising TNX is having a negative effect on the Dow Jones U.S. Home Construction Index ($DJUSHB) as it's on the verge of a significant breakdown:

The bottom panel shows that this group has already lost relative support, so absolute support may be just a formality at this point. This group could be among the most volatile over the next week as the key inflation reports, along with the Fed decision will have a direct impact here. The AD line continues to spiral downward, so I'm not getting a warm and fuzzy feeling about this group right now.

We haven't seen the TNX break above 5% yet, and we haven't see the DJUSHB break down on an absolute basis, so all of this is pure speculation at this point, but it's important to prepare for what may lie ahead.

I'll be back tomorrow with a look at the PPI report and the market's reaction.

Happy trading!

Tom