• Stocks: Indexes tumbled today as bond jitters swept the globe, with rate-sensitive small-cap stocks bearing the brunt of the selloff.
• Commodities: Crude climbed on reports of attacks against two supertankers passing through the Strait of Hormuz. CENTCOM’s announcement that the US launched retaliatory attacks against targets around the waterway did nothing to ease the market’s fears.
• Bonds: Yields popped as escalating tensions in the Middle East spooked traders, sending a shockwave through markets around the world (more on that in a moment).

Bonds

Morning Brew Inc, Photos: Spencer Platt/Getty Images, Adobe Stock

You’ve probably heard rumblings about a global bond selloff—but if you’ve been too busy throwing your money at GoPro because you’re a Markiplier fan, now’s the time to tune in.

Rising geopolitical tensions between the US and Iran have reignited fears that inflation could again become a runaway train, triggering investors everywhere to dump bonds as they anticipate higher interest rates (keep in mind, bond prices and yields move inversely).

The 10-Year US Treasury yield touched 4.8% today, its highest level since January 2025. Meanwhile, the two-year Treasury yield jumped to 4.369%, also its highest since early 2025.

But yields weren’t just bouncing in the US: Japan’s 10-year yield hit 3%, the highest in decades, while long-dated German and French bonds also hit their highest levels in roughly 15 years.

Heads up: Given that oil prices briefly surged above $92 per barrel once again, and the Strait of Hormuz is still not fully open, analysts are expecting yields to stay volatile. UBS, for one, predicts that 30-year and 10-year Treasury yields will end the year at 5% and 4.5%, respectively, while yields on shorter-dated government bonds should decline over the next few months.

Fixed income gets some fixing up

Skyrocketing yields are ominous news for the global economy, the stock market, and the Federal Reserve. But there is a silver lining for investors: Bonds suddenly deliver far more bang for their buck.

That’s why some strategists are seeing higher yields as an opportunity, rather than a disaster. “For almost a decade, investors became accustomed to a world where interest rates were low and high-quality bonds yielded almost nothing,” explained MacKenzie Kohler, an associate portfolio manager of fixed income at Northwestern Mutual. “Today, that environment has changed. Interest rates are considerably higher, but more importantly, real rates—the return investors can potentially earn after accounting for inflation—are positive.”

Now, investors can earn 4% to 5% on relatively risk-free US Treasuries, without the volatility of stocks. “We continue to see an attractive risk-return profile in the short- to intermediate-maturity segment of high-quality government and corporate bonds,” explained UBS Global Head of Equities Ulrike Hoffmann-Burchardi. “Yields are likely to decline over the coming months, while their currently elevated levels provide a cushion against volatility and serve as an important driver of returns.”

Just remember: No bond is going to experience the exponential profits of AI stocks, or even outpace the S&P 500 in a good year. But for a low-risk investment, they’re pretty high-reward right now.—LB

      

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Stocks

🟢 What’s up

• Apple climbed 2.61% as John Ternus began his first day as CEO, succeeding Tim Cook after his 15-year run.
• Fervo Energy surged 28.41% on a deal to supply Google with roughly 400 megawatts of geothermal power from its Utah project.
• Novartis gained 6.03% on positive late-stage trial results for its experimental multiple sclerosis pill, overshadowing a clinical hold on a separate cell therapy linked to three patient deaths.
• GoPro soared 40.38% on a $285 million deal to be acquired by Starman Optical.
• Medtronic added 1.52% on plans to invest $700 million in its robotic surgery business.
• Duolingo rallied 7.02% on an Evercore ISI upgrade that pointed to a potential rebound in user growth.

🔴 What’s down

• Nvidia fell 1.51% amid concerns that its role in a $35 billion Anthropic-Lambda computing deal could amount to “circular financing.”
• Alumis plunged 56.58% after its experimental lupus treatment failed to meet the main goal of a mid-stage trial.
• Micron sank 2.64% on reports that its employees are planning to strike.
• EV maker Nio declined 4.14% on a third-quarter sales outlook that fell short of Wall Street expectations.
• Metal manufacturer Metallus sank 3.33% following news that CEO Michael Williams will retire at the end of 2026.
• Dell dropped 6.8% ahead of earnings, with Wall Street expectations running high due to the stock’s massive rally this year.

Stat of the day

Wake me up when September ends

Morning Brew Inc

Historically, September is a terrible month for investors. If today was any indication, it might be even worse than expected.

First, the numbers to know: The S&P 500 has fallen an average of 0.7% in September, going all the way back to 1950. The Dow has dropped an average of 0.8% during the same period, while the Nasdaq has sunk an average of 0.9% during this sordid month since 1971.

Put another way, September has generated positive returns for S&P 500 investors just 45% of the time, and it’s the only month besides February with a negative return on average, according to Carson Group’s Ryan Detrick.

Theories abound as to why September stinks for stocks: Some believe that the “sell in May and go away” crowd returns from their summer break and begins paying attention to markets again, while others suspect that fund managers start fretting about their profits and losses heading into the end of the year, and reposition accordingly.

Whatever the case may be, history isn’t on investors’ side this month. Couple that with bond market upheaval that doesn’t seem to be going away anytime soon, and you might want to consider skipping September altogether.—MR

Reader poll

Investing

Morning Brew Inc, Photos: Allison Robbert/Getty Images, Mario Tama/Getty Images

Elon Musk has never been short on ambition. He’s sold flamethrowers, put brain chips in humans, and spent years talking about colonizing Mars. Depending on who you ask, that either makes him a visionary, delusional, or just very committed to the bit. But with Tesla and SpaceX under his belt, investors have learned not to dismiss the big promises.

Yesterday, Tesla enjoyed its strongest day of trading since July, becoming the best-performing stock in the S&P 500, as excitement built ahead of Thursday’s Cybercab event in Austin. Robotaxis matter to shareholders because they’re central to the case for valuing Tesla as an AI and autonomy company rather than just an automaker. Morgan Stanley, for example, says Tesla’s autonomous-driving business could be worth roughly $1 trillion.

So far, though, the rollout hasn’t matched Musk’s ambitions. Last year, he said Tesla robotaxis could be available to half the US population by the end of 2025. Today, estimates put Tesla’s robotaxi fleet at only about 100 vehicles across six cities. Rival Waymo, meanwhile, has roughly 4,000 vehicles and continues to expand into new US markets. Tesla fell 3.22% today.

SpaceX wants to build it all

Musk’s ambition is also showing up at SpaceX, where he is pushing the company’s build-it-yourself philosophy.

In a post on X, Musk confirmed that SpaceX plans to make its own gas-turbine parts at a new foundry in Texas. Those turbines help generate electricity for things like AI data centers, and Musk says making the parts in-house could get new power online up to 18 months faster.

That announcement hurt suppliers like Howmet Aerospace, one of the few companies capable of producing those specialized turbine parts at scale, as investors worried SpaceX could eventually become a competitor.

But some analysts see the move as evidence of tight supply rather than an immediate threat to incumbents. GE Vernova, one of the world’s largest gas-turbine makers, has said much of its turbine capacity is already sold through 2030, while Howmet has customer agreements extending through the end of the decade. At the same time, Jefferies estimates it could take SpaceX roughly four years to establish meaningful in-house production.

With that in mind, investors probably shouldn’t panic-sell turbine suppliers just yet—nor should they smash the “buy” button on SpaceX. Musk certainly has no shortage of big ideas, but it may be worth waiting for something a little more concrete than a post on X before getting carried away.—SY

      

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News

• Donald Trump Jr.’s fund is investing $300 million in Polymarket.
• The US livestream shopping industry is forecast to approach $20 billion in sales this year, more than double from two years ago, thanks to apps like TikTok.
• MediaTek, the Taiwanese chipmaker, inked a $3.5 billion partnership with Nvidia.
• Waymo and Amazon’s Zoox are expanding across the US in a race to become the dominant robotaxi player.
• US job openings rose less than expected in July.
• Meet one investor who lost over $250,000 trading SpaceX—but is far from done chasing the high.

Calendar

Economic reports: Private employers take the spotlight with the ADP payroll report, and we’ll take a peek into the Fed’s mindset with a look at the Beige Book.

Earnings announcements: Broadcom, Snowflake, C3 AI, and Ollie’s Bargain Outlet keep the earnings coming.

recs

🤪 What do all great investors have in common? They’re weirdos.

🗓️ Welcome to September: Here are three stocks to buy and three to sell this month.

📸 Divorces can get messy. But divorces featuring billionaire hedge fund titans fighting tooth and nail can get very entertaining.

🤑 Amid all the bond market mayhem, emerging markets seem set to profit from a “wall of money.”

😰 Where did all that confidence go? Wall Street is getting nervous as earnings season hype fades away, but here are two ways to play the market volatility ahead.

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