The Fed opens with the 10-year above 5% and crude still over $100
Tuesday, September 15, 2026: FOMC meeting begins, WTI at $102.50, 10-year yield above 5%, Empire State report due 8:30 a.m.
The Federal Reserve’s two-day meeting starts this morning with the 10-year Treasury already at 4.97% on Monday’s official curve and trading above 5% before the open. West Texas Intermediate was at $102.50 a barrel, up 1.1%, as of 7:12 a.m. Eastern. The rate decision, the new economic projections, and the press conference land Wednesday.
Overnight, the other story reversed. Semiconductor funds took the brunt of Monday’s selling after Anthropic’s Dario Amodei, OpenAI’s Sam Altman, and xAI’s Elon Musk called for a slower pace of model development. The semiconductor fund SMH fell 4.8%. Cybersecurity funds closed a median 7.8% higher, all eight of them; CrowdStrike jumped 13.9% and Palo Alto Networks 13.1%. President Donald Trump, on a public call with Nvidia chief executive Jensen Huang, dismissed the safety scare as a “hoax” and said a slowdown would not be allowed to happen. Huang said he would not let one happen either. In extended hours, SMH was 0.9% higher and Nvidia 0.6% higher. The cybersecurity fund CIBR was 1.0% lower; CrowdStrike and Palo Alto Networks were each about 2% lower.
U.S. equity funds are not opening in a hole that matches the noise around them. The S&P 500 fund SPY was 0.2% below Monday’s close in extended hours as of 7:22 a.m. Eastern. The Nasdaq-100 fund QQQ was essentially unchanged. The CBOE Volatility Index sat at 17.13.
Yields, oil, and a hike the surveys now match
Monday’s Treasury curve put the 2-year at 4.65% and the 30-year at 5.34%. The long-Treasury fund TLT tagged $80.46 in Monday’s session, matching its year low, closed 0.1% higher, and then traded down 0.3% in extended hours. The high-yield fund HYG finished a sixth consecutive down session. Investment-grade credit LQD has now fallen for four.
A 25-basis-point increase would lift the federal funds target from 3.50%–3.75% to 3.75%–4.00%, the first hike since 2023. Interest-rate futures were pricing close to a 90% chance of that increase as of Monday. A Reuters poll published the same day found 86 of 101 economists now expect the quarter-point move, a reversal from last week’s survey in which more than two-thirds expected a hold. A CNBC survey published this morning found respondents now expect at least two increases over the next year. The Reuters poll found 37 of 70 respondents expect at least one more hike by the end of March. The live question is the path: whether Wednesday’s projections describe a one-time adjustment to expensive oil or further tightening.
Crude is doing the inflation work the last consumer-price report could not. WTI is above $100; Brent was at $106.27, up 0.6%. Energy equities did not confirm the crude move on Monday: the energy sector fund XLE fell 0.9% on its heaviest volume in 20 sessions. The oil fund USO gained 1.1% on Monday and is up 10.4% over five sessions; it was another 0.5% higher in extended hours.
USO is up 10.4% in five sessions. XLE is not.
- USO · 156.66
- XLE · 64.53
Attacks have shut Saudi Arabia’s East-West pipeline, a bypass around the Strait of Hormuz, where flows remain constrained. AAA put the U.S. average diesel price at a record $6.27 a gallon.
Asia lower, Europe softer, the cash open quiet
Asian indexes closed lower overnight and European ones were softer before the U.S. open, none of them down more than 1%.
The S&P 500 closed Monday at 7,619.98, down 0.5%, or 37 points. The Nasdaq-100 fell 0.8% to 29,127.16, the Dow 0.3% to 52,421.20, the Russell 2000 0.4%. Breadth was worse than the indexes: 1,500 U.S.-listed ETFs closed higher and 3,801 closed lower. The communications sector fund XLC gained 2.2% for a third session; the technology sector fund XLK fell 1.8% on its heaviest volume in 20 sessions.
Only three of 11 sector funds finished higher
- +2.2%
- +1.4%
- +1.2%
- −0.1%
- −0.4%
- −0.7%
- −0.9%
- −0.9%
- −1.3%
- −1.4%
- −1.8%
The small-cap fund IWM was 0.4% lower in extended hours, extending a five-session drop of 2.7%.
Empire State, Bessent, a 20-year auction, and a crypto vote
The scheduled U.S. data is light for a Fed day. The weekly ADP employment update is due at 8:15 a.m. Eastern. The New York Fed’s Empire State manufacturing index follows at 8:30 a.m., with a consensus of 14.1 after August’s 20.6. Neither print includes this week’s oil, and neither will rewrite the projections the committee is already writing. August retail sales are Wednesday, not today.
Treasury auctions a 6-week bill and a 20-year bond today. At 10 a.m., Treasury Secretary Scott Bessent gives his annual testimony on the international financial system to the House Financial Services Committee, a venue for questions on energy prices, the debt, and the Fed.
At 2:15 p.m., the Senate holds a cloture vote on the Digital Asset Market Clarity Act, which needs 60 votes to advance. Cloture would only end debate on the motion to proceed. The bill would divide oversight of digital assets between the Securities and Exchange Commission and the Commodity Futures Trading Commission. Bitcoin was at $76,917, down 1.6%, as of 7:32 a.m. Eastern. The iShares Bitcoin Trust IBIT was 2.7% lower in extended hours.
What would prove this morning’s setup wrong is a hold on Wednesday, or projections that treat $100 oil as a one-meeting problem.
Frequently asked
Is the Fed expected to raise rates?
Yes: rate futures priced close to a 90% chance of a quarter-point increase, which would be the first hike since 2023.
Why did semiconductor funds sell off?
The heads of Anthropic, OpenAI and xAI called for a slower pace of model development, which hit chip funds and sent cybersecurity funds sharply higher.
What is driving oil above $100?
Attacks have shut Saudi Arabia's East-West pipeline, a bypass around the Strait of Hormuz, where flows remain constrained.
What else is on the calendar today?
The Empire State manufacturing index, Treasury Secretary Bessent's testimony to the House Financial Services Committee, a 20-year bond auction and a Senate cloture vote on a digital-asset market bill.