Why Oil and Treasury Yields Matter for Stocks Right Now
September is seasonally one of the weaker months for stocks, and so far, it’s giving investors plenty to chew on.
- Interest rates
- Crude oil prices
- Learn to trade credit spreads
Yields are up
The much-awaited August inflation report is finally behind us, and the numbers helped calm the market after Thursday’s selloff.
The good news: Inflation came in line with expectations.
The not-so-good news: Inflation is still in the picture, and the Fed is expected to raise interest rates on Wednesday.
According to the CME FedWatch Tool, the odds of a rate hike were at 86.50% on Friday. In some ways, it feels as though the market is one step ahead of the Fed. Treasury yields remain elevated, which isn’t surprising given the recent rise in oil and diesel prices. And this brings us to the main focus of the market...
Oil prices are rising
Crude oil pulled back on Friday, but prices remain elevated. The chart of West Texas Crude Oil ($WTIC) below shows a clear uptrend, with price trading well above the 21-day exponential moving average (EMA).
I’ve marked several key support and resistance levels based on previous highs and lows using the Annotation tool. These horizontal lines make it much easier to see where oil could run into resistance or where the trend could weaken.
If geopolitical tensions escalate, there’s still plenty of room for oil prices to move higher. The next level I’m watching is the $106 level, which lines up with the May 2026 high. A move above that could put the April highs back in play.
The opposite scenario is just as likely. If tensions ease and oil falls below $93.50, it could quickly pull back to its 21-day EMA. If this were to happen, there could be a noticeable shift in the market narrative. Lower oil prices could pull U.S. Treasury yields down, which could provide some relief for equities.
StockCharts members can view the Intermarket Analysis panel in the Market Summary page to get a bird's-eye view of how stocks, bonds, oil, and precious metals are performing relative to one another.
These markets don’t move in isolation, and monitoring them can provide some clues as we head into next week’s FOMC meeting. The chart below puts this in perspective. Over the last year, oil is up 112.19% while bonds are down 6.38%.
The question is whether the relationships between these asset classes changes, especially with the Fed meeting and the midterm elections getting closer.
Trading in uncertain times
When the market doesn’t have a clear directional trend, options can provide another way to approach the market.
Tony Zhang, Chief Strategist at OptionsPlay, is hosting a live event where he’ll walk through how to find and set up credit spreads. One of the advantages of these strategies is that your potential profit and maximum risk are defined before you enter the trade.
What: Find the Best Credit Spreads in Under 60 Seconds
When: Tuesday, September 15, 2026, at 12:00 PM ET.
Have a relaxing weekend!
