Top News Today: Stocks Fall; 10-Year Yield Hits 19-Year High; Oil Surges

MARKET WRAPS

STOCKS: Stocks fell as oil futures and Treasury yields continued to surge.

TREASURYS: Treasury yields rose, and the yield on the 10-year note closed at the highest level since July 2007.

FOREX: The U.S. dollar rose against rivals in anticipation of a Federal Reserve rate hike on Wednesday.

COMMODITIES: Oil futures rose by more than 4% to top $105 a barrel in New York, amid fears that Saudi export capacity will be constrained for an extended period.

HEADLINES

An AI bubble is no longer Wall Street's biggest fear. This stock-market

risk just took its place.

Global fund managers are being haunted by a new worry - the

possibility that bond yields could shoot higher in a "disorderly" manner,

stoking volatility that potentially spills over into stocks and the

economy.

That's according to Bank of America's September survey of 170 managers

who collectively have $470 billion in assets under management. Up from a

net 27% in August, 33% of those managers now see uncontrolled rises in

yields as the biggest "tail risk" facing them at present. A tail risk

refers to a rare or extreme market event that has a low probability of

happening.

Iran War's Price Tag, Pegged at $38 Billion, Is Growing as Much as $3

Billion a Month

WASHINGTON-The Pentagon spent some $38 billion in its first few months

of the war with Iran and will need at least five years to replace the

missile interceptors it expended trying to defend U.S. troops and bases,

according to a nonpartisan congressional office.

The Congressional Budget Office also estimates that the war is likely

to cost an additional $2 billion to $3 billion a month. The tally doesn't

include the costs of rebuilding U.S. bases damaged in the war and could

increase if fighting intensifies.

The assessment comes as President Trump is trying to determine next

steps in the war. Iran hasn't agreed to his demands to relinquish its

nuclear program, and Trump in recent weeks has tried to pivot to economic

pressure.

U.S. Diesel Prices Hit New Record High as Fuel Squeeze Bites

The average price of a gallon of diesel in the U.S. hit a fresh record

high of $6.27 on Tuesday, according to the American Automobile

Association.

U.S. diesel prices are soaring once again as the squeeze in the fuel

market tightens, breaching $6 a gallon for the first time on Friday.

Higher prices at the pump come as Brent Crude trades at around $107 a

barrel, with renewed supply concerns mounting and Northern Hemisphere

farmers entering the diesel-intensive harvesting season.

Prices had jumped at the start of the Iran conflict before cooling

after refiners ramped up production. The average price for a gallon of

diesel was $3.69 a year ago.

Regulators Press Tesla on Whether Cybercab May Have Option for Human

Control

Federal regulars are pressing Tesla on whether its steering wheel-free

Cybercab may have a way for humans to drive it after all.

The National Highway Traffic Safety Administration asked Tesla in an

order published Tuesday whether the vehicle has the ability to be driven

with traditional controls and, if so, whether that is why Tesla believes

the Cybercab is compliant with federal safety standards.

"State whether temporarily installed human driver controls or other

equipment for use by a human driver were a part of Tesla's basis for

certifying compliance," NHTSA said in the order.

Landmark Crypto Bill Fails Procedural Vote, Casting Doubt on New

Digital-Asset Rules

In a setback for the crypto industry, a bill that would have helped

usher digital assets into the mainstream financial system failed to

advance in Congress.

Known as the Clarity Act, the measure fell short Tuesday in a

procedural vote requiring the approval of 60 senators.

The legislation, which was expected to establish the first

comprehensive regulatory framework for digital assets, was under

negotiation for more than a year. Democrats and Republicans fought over

whether the measure should restrict President Trump from profiting off

the industry. Crypto and banking executives (and their allies) meanwhile

dug in on whether digital-asset platforms such as Coinbase could offer

tokens with interest-like rewards that resembled bank deposits.

Truist to Sell $5.5 Billion of Loans as It Exits Near-Prime Auto Lending

Truist Financial has inked a deal to sell $5.5 billion of auto loans

as part of the regional bank's decision to exit the near-prime auto

lending business.

Truist on Tuesday said it expects the sale, which represents

substantially all assets of its Regional Acceptance auto-finance unit, to

generate net proceeds of $5.2 billion, along with a $535 million

loan-loss-reserve recapture.

Regional Acceptance generated breakeven pretax earnings in the first

half of the year, Truist said.

Fed System Monitoring Banks Suffered Outage Last Month

A Federal Reserve database used for monitoring banks experienced a

temporary outage last month, triggering concerns from a top Senate

Democrat about the consequences of cuts to the Fed's regulatory staff.

The Fed confirmed that part of the system, called the National

Information Center, had an outage last month.

"The August 5 outage temporarily impacted the National Information

Center's public website," a Fed spokesperson said. "Critical functions

remained operational."

TALKING POINT Bond Yields Could Come Down as Fast as They've Climbed

Sometimes, the simplest explanation for something works. And in the case of the Treasury market, it appears that the main reason bond yields are rising is because short-term interest rates are likely to rise.

There are many risks that can frighten the bond market. Runaway inflation. Unsustainable fiscal deficits. Excessive bond issuance by tech companies. And as 10-year Treasury yields have climbed toward 5%, there has been no shortage of headlines about those threats.

But another reason investors sell longer-term bonds and demand a higher yield to hold them is because they believe that rates on shorter-term bonds are going to be paying them more for a while. So to agree to lock up their money for longer, they need more payback.

Based on available market signals, this appears to be the main factor behind the move in recent weeks. And that in turn is determined by what the Federal Reserve is expected to do.

That may be little comfort to anyone hoping to get a mortgage or borrow money. Yet it does suggest that at least some of the recent move is reversible, too.

Measures of inflation expectations, for example, haven't jumped dramatically very recently. The gap between the yield on a nominal 10-year Treasury bond and the yield over inflation paid on 10-year Treasury Inflation Protected Securities is around 2.4%. This so-called "break even" inflation rate is higher than it was in 2019 or early 2020, when it was under 2%. But it is well within the range of where it has traded since 2021.

This yield gap isn't a perfect measure of expectations for inflation, since it can also reflect differences in liquidity between the two markets and other factors. However, it matches what other measures of expectations show.

--Telis Demos, The Wall Street Journal

Expected Major Events for Wednesday 06:00/UK: Aug Producer Price Index

08:00/ITA: Aug CPI

08:30/UK: Jun Card Spending statistics

08:30/UK: Aug CPI

08:30/UK: Jul UK House Price Index

11:00/US: 09/11 MBA Weekly Mortgage Applications Survey

12:15/CAN: Aug Housing Starts

12:30/CAN: Jul Building permits

12:30/US: Aug Import & Export Price Indexes

12:30/US: Aug Advance Monthly Sales for Retail & Food Services

12:30/CAN: Aug Model-based Principal Field Crop Estimates

14:00/US: Jul Manufacturing & Trade: Inventories & Sales

14:00/US: Sep NAHB Housing Market Index

14:30/US: 09/11 EIA Weekly Petroleum Status Report

18:00/US: Federal Reserve economic projections

18:00/US: U.S. interest rate decision

20:00/US: Jul Treasury International Capital Data

All times in GMT. Powered by Onclusive and Dow Jones.

Expected Earnings for Wednesday Aeluma Inc (ALMU) is expected to report for 4Q.

Bio-Path Holdings Inc (BPTH) is expected to report for 2Q.

Dollarama Inc (DLMAF,DOL.T) is expected to report $1.28 for 2Q.

Here Group Ltd - ADR (HERE) is expected to report for 4Q.

Ispire Technology Inc (ISPR) is expected to report $0.05 for 4Q.

Lennar Corp - Class A (LEN,LENB) is expected to report $1.29 for 3Q.

(MORE TO FOLLOW) Dow Jones Newswires

September 15, 2026 16:38 ET (20:38 GMT)