Elevated Energy Prices and Rising Bond Yields Stoke Volatility in Market Averages

Barry Adams
07 Sep, 2026
New York City

U.S. indexes are likely to face volatile trading in a truncated week amid weakening global sentiment and renewed fighting in the Middle East. 

Investors are set to return on Tuesday after a three-day weekend, as tech stocks rebounded in the previous month amid sustained positive sentiment towards the sector.

Elevated bond yields weighed on major indexes last week, and renewed U.S.-Iran tensions and rising oil prices hurt investor sentiment.

The U.S. indexes closed higher later in the week, led by gains in the S&P 500 Index and NASDAQ Composite Index following strong tech earnings and market reactions, and rate-hike fears eased. 

For the week, the S&P 500 index increased 0.4%, and the Nasdaq Composite advanced 0.6%. 

In August-to-date, the S&P 500 Index edged up 3%, and the Nasdaq Composite advanced 4%, as investors shifted their focus to quarterly results. 

Nvidia advanced 8%, Microsoft gained 11%, Micron Technology jumped 13%, and SanDisk soared 22%.   

Rapidly cooling sentiment in the global bond market muted gains in tech-dominated stock trading as investors demand higher premiums to hold U.S. Treasuries.

Global markets experienced a sharp bond sell-off and rising energy prices this week, driven by escalating U.S.-Iran geopolitical tensions and persistent inflation concerns.

Government bond yields hovered near multi-decade and multi-year highs worldwide as investors braced for prolonged borrowing costs. 

Global Treasury yields and crude oil prices eased from their recent highs, providing a much-needed breather for investors, but market sentiment remained cautious.  

Despite the slight easing of bond yields, investors remained concerned over rapidly rising U.S. federal government debt, which has now surpassed $40 trillion and is growing by one trillion dollars every 100 days. 

 

U.S. Job Growth Accelerated Sharply in August

However, broader markets remain under pressure by stronger-than-expected U.S. jobs data that supported the case for a Federal Reserve rate hike later this month. 

The U.S. economy added 162,000 jobs in August, and the unemployment rate remained steady at 4.1%, said the Bureau of Labor Statistics.

The August job growth beat expectations and ended a slow summer for hiring.

July was revised upward to a gain of 21,000 jobs instead of a loss, and June was revised up to 31,000. 

U.S. wage growth was 3.1% from a year ago in August, remaining unchanged from July according to the U.S. Bureau of Labor Statistics employment report.

U.S. wages reached an average hourly earnings rate of $37.75, while continuing to lag behind broader cost-of-living increases. 

Rising oil prices (with Brent crude trading near $95 per barrel) have increased vulnerability for real wages, as higher costs for food, transportation, and housing erase most of the wage gains.

The stronger-than-expected data eased immediate concerns over a summer economic slowdown while giving the Federal Reserve complex data to weigh regarding future interest rate decisions.

 

U.S. Movers 

Lululemon plunged 17.2% to $100.61 in Friday's trading after the company announced fiscal second-quarter results. 

Revenue decreased 4% to $2.4 billion from $2.5 billion, net income fell to $329.2 million from $370.0 million, and diluted earnings per share fell to $2.92 from $3.10 a year ago. 

The diluted earnings per share includes $0.86 per share related to tariff refunds and associated interest, net of tax.

Net revenues decreased 8%, and comparable sales fell 12% in the Americas, but net revenues rose 4%, and comparable sales fell 3% in international markets, respectively. 

Operating margin decreased by 190 basis points to 18.8%, despite the tariff refunds of $134.5 million lifting the margin by 560 basis points.

Global comparable sales decreased 10% on a constant dollar basis, severely impacted by a 12% drop in the Americas, marking a sharp decline from past historical growth trends.

Sales of Lululemon's core women's leggings category plummeted by approximately 20% during the quarter, indicating declining product relevance and intense new competition.

Management sharply reduced its fiscal full-year revenue outlook to a range of $10.35 billion to $10.5 billion and slashed full-year EPS guidance to $9.48 to $9.73, citing traffic pressure and brand sentiment headwinds.