Equities fell last week, with the Dow Jones Industrial Average declining 1.6%, its worst week since March. The S&P 500 index dropped 0.8%, while the Nasdaq Composite fell 0.7%.
Treasury yields continued to push higher, pressuring stocks, before a respite on Friday. The yield on 10-year Treasury notes hit 4.97%, the highest since October 2023, while the yield on 30-year bonds breached 5.35% for the first time since 2007.
That puts more pressure on Fed Chairman Kevin Warsh when the Federal Open Market Committee meets this Tuesday and Wednesday. Wall Street expects a rate increase, and if the FOMC fails to deliver one there could be more trouble for longer-dated bonds.
A rate hike would re-establish the central bank's inflation-fighting credentials, which could lower yields at the long end of the Treasury curve, even though short-term rates would rise. In late August at Jackson Hole, Warsh said that "price stability is not self-executing, nor is inflation necessarily mean-reverting," and leaving interest rates untouched again could risk a bond-market revolt. If bond operators don't think the FOMC is serious about tackling inflation that has run above the Federal Reserve's 2% target for more than five years, Treasury yields could become unanchored.
Monday 9/14
The G20 energy ministers meet in Houston to discuss energy security and the critical-minerals supply chain, among other topics. The confab runs through Wednesday.
Tuesday 9/15
Forgent Power Solutions and Trip.com Group report quarterly results.
Wednesday 9/16
Lennar releases third-quarter fiscal-2026 earnings.
The Census Bureau reports retail and food-service sales for August. Consensus estimate is for a 0.8% month-over-month increase following a 0.6% decline in July. Excluding autos and gasoline, retail sales are expected to increase 0.4%, compared with a 0.2% drop previously.
The National Association of Home Builders releases its Housing Market Index for September. The consensus call is for a 34 reading, one point less than in August. Readings below 50 indicate home builders are pessimistic about single-family housing markets in the near future.
The Federal Open Market Committee announces its monetary-policy decision. According to the CME's FedWatch Tool, traders are pricing in an 85% chance that the FOMC will raise the federal-funds rate by a quarter of a percentage point, to 3.75% to 4%. Wall Street will be keen to hear from Fed Chairman Kevin Warsh, even if he has scrapped forward guidance. If the central bank raises rates, the key for equities is whether it's the start of a larger rate-hiking cycle or just a tap on the brakes.
Thursday 9/17
The Census Bureau reports residential housing statistics for August. Economists forecast a seasonally adjusted annual rate of 1.32 million privately-owned housing starts, nearly 100,000 more than in July.
The National Association of Realtors reports its Pending Home Sales Index for August. Consensus estimate is for a 0.5% month-over-over increase following a 2.3% decline in July. Pending home sales in July fell to its lowest level since January. "The highest mortgage rates of the year hit right in the middle of summer, and that's pulling back contract signings," according to NAR chief economist Lawrence Yun.
Friday 9/18
The Bank of Japan announces its monetary-policy decision. The central bank is widely expected to lift its key short-term interest rate to 1.25% from 1%. Treasury Secretary Scott Bessent has voiced support for higher interest rates in Japan to support a weak yen. The yen hit a four-decade low against the dollar earlier this summer but has rebounded a bit with the help of U.S. intervention. A stronger yen could keep a lid on rising Treasury yields.