S&P 500 Investors Adjust to Expectations of More Rate Hikes

The trading week ending Friday, 11 September 2026 saw the S&P 500 (Index: SPX) drop 0.8% below the preceding week’s close. The index dropped to 7,656.98, which is 1.8% below its all-time record high close from 13 August 2026.

The week’s biggest catalyst driving the outlook for investors was news of inflation, which saw the Consumer Price Index come in at an annualized value of 3.4%, the same a month earlier. That news locked in expectations the Fed will hike interest rates when after it meets 15 and 16 September 2026. The CME Group’s FedWatch Tool now foresees four quarter point rate hikes in the Federal Reserve’s future. The increases above the Federal Funds Rate’s current target level of 3.50-3.75% are expected to come at 12 week intervals, starting on 16 September (2026-Q3), and repeating on 9 December (2026-Q4), 17 March (2027-Q1), and 28 July (2027-Q2).

The news also eliminated all the remaining uncertainty for what the Fed would do in this next week, giving the index some room to rebound on Friday, which saw the S&P 500 rise a little under 0.9% above its Thursday close.

The latest update of the alternative futures chart shows the trajectory of the Samp;P 500 is consistent with investors focusing on 2026-Q4, with the index running in the lower end of its expected range for that time horizon.

Here are the week’s market-moving headlines:

Tuesday, 8 September 2026

• Signs and portents for the U.S. economy:

• Oil hits multi-week highs after Houthi attacks on Saudi energy facilities

• OPEC+ keeps oil output policy unchanged for October
• Why isn’t oil above $100 despite supply disruptions?

Copper Hits All-Time-High As Physical Economy Reprices Scarcity

Bigger exports, bigger trouble, bigger stimulus developing in China:

• China’s exports surge as demand for high-tech, AI help prop up economic growth
• China’s car exports stay strong in August but domestic sales decline more
• China’s Provinces Show Evidence Of Financial Pressure And The Economy’s Imbalances
• Chinese Oil Demand Unexpectedly Soars, Sending Shanghai Crude Above $100, With Brent Prices Set To Follow
• China says it will pump $54 billion into banks and insurers — but their stocks still fell

BOJ minions getting excited to hike interest rates again as continuing effort to prop up yen:

• Yen holds near seven-month high as US dollar steadies

• Japan may have sold U.S. Treasuries to fund yen intervention
• Japan’s August foreign reserves post largest-ever drop after record intervention
• The yen’s sudden surge upsets the carry trade faithful

• What is the yen carry trade?

Why the BOJ will bet small on rate hikes now to avoid a bigger shock later

S&P 500 falls as AI worries hit software makers

• Wall Street ended in the red as Middle East tensions kept investors on edge

Wednesday, 9 September 2026

• Signs and portents for the U.S. economy:

• 10-year yields highest since 2023

• US fixed 30-year mortgage rate climbs to highest since June 2025

Brent crude rises above $100 a barrel as Middle East conflict intensifies

Fed minions maybe only going to hike interest rates once before the end of 2026?

• Fed to hold rates steady in rest of 2026; rising number of analysts see at least one hike: Reuters poll

Bigger trouble, stimulus developing in China:

• China oil demand to fall 8.9% in 2026, Sinopec research says

U.S. Treasury Secretary claims asymmetric information advantage for supporting Japan’s currency:

• “I Am The House Now”: Bessent Goes Full Judge Dredd On Yen Bears

S&P 500 ends down as oil tops $100 per barrel

• Wall Street ended lower as oil cleared $100/bbl amid Middle East escalation
• S&P 500 breadth tumbles as only 42% of stocks clear 50-day average

Thursday, 10 September 2026

• Signs and portents for the U.S. economy:

• US producer prices increase as expected in August; but key details firmer
• China buys 1 million tons of US soybeans ahead of Xi visit, sources say
• Brent holds above $100 as tanker attacks dampen hopes for Hormuz traffic recovery

• Rate-Hike Odds Spike As Fuel Costs Push US Producer Prices Higher
• OPEC oil output falls in August, Reuters survey shows

US holiday retail sales growth set to accelerate, Deloitte says

US existing home sales drop to 14-month low in August

Bigger trouble, stimulus developing in China:

• China independent refiners scramble for oil, underpinning spot premiums

BOJ minions describe what gets them excited to hike Japan’s interest rates:

• BOJ policymaker warns of price risks that may trigger rapid rate hikes
• BOJ to raise rates to 1.25% this month, reach 1.75% faster than expected

• Japan’s PM has a new ally: foreign yield hogs

ECB minions deliver Eurozone interest rate hike as expected, think they won’t see more inflation because of it:

• ECB raises interest rates, bolstering bets for further moves

• ECB hikes interest rates – as it happened

ECB raises interest rates to fight off inflation jump

ECB governors see more tightening ahead with October in play

ECB is focusing on the wrong risk of $100 oil

S&P 500 ends down as Treasury yields rise and traders fret about inflation

• U.S. equities closed in the red as Wall Street received the latest inflation data

Friday, 11 September 2026

• Signs and portents for the U.S. economy:

• Inflation stayed hot in August with annual pace of 3.4%, raising the odds of a Fed hike

• Rate-Hike Odds Soar Despite Lowest Core Consumer Price Inflation Since 2021

US 10-year borrowing costs pull back from 5% in reprieve for Bessent

Oil falls but on track for 8% weekly gain on supply concerns; US diesel hits record high

• U.S. crude oil falls back below $100 but heads to weekly gain
• Oil tanker rates hit record highs following Iran, US shipping attacks

Fed minions expected to deliver September 2026 rate hike:

• Fed rate-hike case builds as inflation fails to cool

BOJ minions coyly excited to hike Japan’s interest rates in next week, coordinating with U.S. on support for currency:

• BOJ set to lift rates next week but offer few clues on terminal, sources say
• Japan to maintain close communication with US on currency markets, Katayama says

ECB minions starting to think interest rate hikes in Eurozone might hurt economic growth, say it won’t stop them from more hikes:

• ECB’s Makhlouf says further rate hikes could hurt economic growth
• ECB policymakers open door to more rate hikes on energy risk

S&P 500 ends higher as strong inflation data cements rate-hike bets

• Wall St climbs after August inflation report, oil price slide

• VIEW Stocks, bonds rally after August inflation report

The Atlanta Fed’s GDPNow tool‘s forecast of real GDP growth for the U.S. economy in 2026-Q3 dipped to +4.4, declining from the +4.7% annualized growth it projected a week earlier.

Image credit: Microsoft Copilot Designer. Prompt: “An editorial cartoon of a Wall Street bull and bear who are happy to see news the Federal Reserve will hike interest rates in September 2026 as the bull says ‘THANK GOODNESS. MAYBE WE CAN FINALLY START LOOKING PAST THIS MONTH’”. That’s a bit of satire aimed at analysts who somehow think investors weren’t already looking past the end of the current quarter and factoring in the potential for more rate hikes before the end of the year in their investing decisions.