Hi friends! 👋
Here’s what I’m looking at today.
Inflation Still Has the Fed Cornered
A Lot of Bad Breadth
The Most Important Line in the Market
Something New in the Bond Market
A Notable Insider Buy
Founder-Led Stocks List
Thanks for reading Spilled Coffee. Let’s get into it.
Eric
Just the second negative week in the past seven for stocks. The S&P 500 fell 1.2%. The Nasdaq held up a little better, down 0.9%. The Dow led the losses, off 2.1%. Small caps got hit hardest, with the Russell 2000 down 2.2%.
Bonds moved too. The 10-year Treasury yield climbed 4.5% on the week as tensions between the US and Iran flared up again in the Persian Gulf.
Oil was the big story, up 9.5% and back above $99 a barrel. Gold didn’t act like a safe haven, falling 2.3%. Bitcoin fell right alongside it, also down 2.3%.
Market Recap
Weekly Heat Map of Stocks
Sentiment Check
Bears continue to outnumber the bulls. The AAII bull/bear spread has now been bearish 24 out of 37 weeks in 2026. 65% of the year.
A Dow Update
Inflation Still Has the Fed Cornered
Friday’s inflation report didn’t bring any surprises. Headline CPI came in at 3.4% year over year, exactly as expected. Core CPI eased slightly to 2.4%. Both numbers matched estimates.
But dig into the categories and it gets uglier. Fuel oil is up 52% year over year. Gasoline is up 27%. Airline fares are up 23%. Energy is doing a lot of the damage, and with oil back above $99 a barrel, don’t expect relief anytime soon.
This was the last major data point before the Fed meets on September 16th, and the full picture isn’t pretty. PPI is running at 5.4%. The economy added 162,000 jobs in August, blowing past expectations. Oil is at $100. Diesel is at record highs. And the 10-year is flirting with 5%, a level we haven’t seen since 2003.
Markets are now pricing in almost a 90% chance of a rate hike next week. I still don’t think they pull the trigger on Wednesday. If they pass this time, October is unlikely too, since that meeting lands right before the election and the Fed tends to avoid moves that close to one. That would push the next real window out to December.
Whatever they decide, don’t expect much guidance either way.
Employment is fine. Inflation is the problem.
And I’m still not convinced raising interest rates does much to fix inflation driven by oil, energy, and supply issues at this point.
That’s what has the Fed cornered.
Grab your popcorn. This one’s going to be worth watching.
A Lot of Bad Breadth
Price has been holding up fine. Under the hood, it’s a different story, and this week gave us one of the clearest warning signs I’ve seen in months.