US equities extended their recovery from a three-week slide, with the S&P 500 rising 0.54% and the Dow gaining 0.94%, even as Treasury yields remained elevated near multiyear highs. The advance came despite futures slipping slightly on Sunday evening, according to CNBC, as investors weighed the interplay between persistent inflation signals and the Federal Reserve's hawkish stance.
The Dow's outperformance reflected a rotation into value and energy-sensitive names as oil prices retreated sharply. The S&P 500 and Nasdaq Composite posted their best weekly performances since early August, advancing 1.2% and 2.1% respectively over the prior week, according to CNBC. That rally occurred even as the 10-year Treasury yield climbed, underscoring resilience in risk appetite despite tightening financial conditions.
The week ahead will test that resilience. Friday's nonfarm payrolls report and fresh inflation data will arrive as Wall Street debates whether the Fed's first rate hike in three years marks the start of a prolonged tightening cycle or a shorter-lived adjustment, according to CNBC. Money markets currently price a 73% probability of another 25-basis-point hike at the next policy meeting, per the Wall Street Journal, bringing the fed funds target range to 4.00%-4.25%.
Defense contractors are among the notable movers in the industrial complex. RTX, Lockheed Martin, Boeing, L3Harris, and Northrop Grumman are ramping missile production to address shortages exposed by US operations against Iran, according to the Wall Street Journal. The Tucson factory run by RTX is operating around the clock to boost Tomahawk output, while Lockheed is adding hundreds of workers in Arkansas to triple Patriot interceptor production. Subcontractors have broken ground on new assembly lines, signaling a multi-quarter capital-spending cycle in the defense sector.
Regulatory developments also drew attention. SEC Chairman Paul Atkins is advancing proxy-reform measures to curb shareholder proposals that advance political agendas unrelated to shareholder value, according to the Wall Street Journal. The move has sparked debate over the balance between investor voice and corporate governance efficiency, with millions of Americans exposed through retirement accounts and mutual funds.
Gold & Commodities
Gold fell more than 1% in early Asian trading on Monday, pressured by rising oil prices and reinforced expectations of further Federal Reserve rate hikes, according to Reuters. Spot gold traded down 1.5% at $4,223.95 per ounce as of 0117 GMT, while US gold futures dropped 1.5% to $4,257.90. The metal had snapped a four-session losing streak late last week as the dollar softened, per the Wall Street Journal, but the reprieve proved short-lived.
The interplay between elevated bond yields and rising oil prices continues to weigh on gold, according to Reuters. Higher real yields increase the opportunity cost of holding non-yielding bullion, while oil-driven inflation concerns bolster the case for additional Fed tightening. Despite the Monday pullback, the GLD ETF closed Friday's US session up 0.44%, reflecting modest safe-haven demand amid geopolitical uncertainty in the Middle East.
Silver outperformed on Friday, rising 0.90% as industrial-metals sentiment improved on hopes for progress in US-Iran negotiations. Natural gas futures, however, fell 3.64%, giving back some of the prior session's gains tied to a pipeline outage in West Virginia operated by a TC Energy unit, according to the Wall Street Journal. The correction underscores the volatility in energy commodities as supply disruptions and geopolitical headlines drive sharp intraday swings.
Oil
WTI crude fell 3.11% to close at $148.33, retreating from recent highs as President Trump rejected Iran's latest proposal to reopen the Strait of Hormuz, according to Reuters. The proposal reportedly repeated previous Iranian demands, offering no new pathway to de-escalation. Despite the rejection, oil prices declined as traders assessed the likelihood of an imminent supply disruption versus the fading prospect of a near-term truce.
Brent crude climbed around 2% in early Asian trading on Monday, per Reuters, reflecting continued uncertainty over the strait's status. The lack of progress on reopening the critical shipping chokepoint—through which roughly one-fifth of global oil supply transits—has kept a geopolitical risk premium embedded in prices, even as the immediate threat of a full closure has not materialized.
Goldman Sachs recently lowered its December 2025 Brent forecast to $71 per barrel, down $5 from its prior view, citing slower oil demand growth and expectations of higher OPEC+ supply, according to Reuters. The bank also cut its 2026 average Brent forecast, signaling a structural shift in the supply-demand balance as the cartel prepares to unwind voluntary production cuts. That longer-term bearish outlook contrasts with the current geopolitical premium, suggesting oil may face downward pressure once the Iran situation stabilizes.
Natural gas futures fell 3.64%, reversing some of the prior session's gains tied to a West Virginia pipeline outage. The correction reflects the market's tendency to overshoot on supply-disruption headlines, particularly in a well-supplied North American gas market where storage levels remain elevated heading into the heating season.
Crypto Markets
Bitcoin fell 1.74% to $83,061.82, extending a pullback as risk appetite cooled and traditional markets grappled with elevated Treasury yields. Ethereum declined 2.13% to $2,649.85, while Solana dropped 2.34% to $118.64, underperforming the broader market despite recent upgrade and tokenomics news, according to CoinMarketCap. XRP led losses among major tokens, down 2.96%, while BNB slipped 1.52%.
Solana's recent strength—attributed to the Helicon network upgrade on 22 September and strong ETF inflows, per CoinMarketCap—has stalled as the token tests resistance in the $115-120 range. The upgrade reduced the minimum staking period and adjusted validator requirements, improving network flexibility, but the rally has encountered profit-taking after a multi-week advance. Solana's integration across more than 400 applications continues to underpin its ecosystem narrative, though competition from newer layer-1 protocols remains intense.
Avalanche surged roughly 40% over the past week, driven by the Helicon upgrade and growing adoption in real-world asset tokenization, according to CoinMarketCap. The protocol's reduced staking requirements and validator adjustments have improved capital efficiency, attracting institutional interest in tokenized securities and commodities. NEAR Protocol also posted a 7% gain over 24 hours, propelled by Bitwise's newly cleared spot NEAR ETF and fresh ecosystem adoption via Brave Wallet integration, per CoinMarketCap. A leveraged short squeeze amplified the move.
Regulatory developments continue to shape sentiment. Taylor Lindman, deputy general counsel at Chainlink Labs, joined the SEC's crypto task force after five years with the blockchain middleware firm, according to CoinMarketCap. Chainlink Labs thanked Lindman on X and expressed support for efforts to modernize US financial infrastructure. Separately, Michael Saylor proposed a digital asset bill of rights at a Washington policy summit, covering custody, tokenized securities, financial privacy, and bank access, per CoinMarketCap. Saylor criticized current reporting rules as built for a different era, arguing that ordinary transactions below a meaningful threshold should not trigger routine government reporting.
The European Central Bank released its response to the European Commission's targeted consultation on the Markets in Crypto-Assets Regulation (MiCAR), signaling ongoing regulatory evolution in the EU. Meanwhile, a payment-infrastructure vulnerability exposed by an exploit affecting Tria resulted in $431,945 in losses from 636 customers, according to NullTX via CoinMarketCap, highlighting shared risks in third-party contract dependencies across the industry.
Macro & Global Drivers
Treasury yields remained near multiyear highs as markets digested the Federal Reserve's hawkish pivot and persistent inflation signals. The 10-year yield—the benchmark for mortgages, auto loans, and credit card debt—hovered around 4.69%, while the 2-year yield, which more closely tracks Fed policy expectations, traded near recent peaks, according to CNBC. Money markets now price a 73% probability of another 25-basis-point hike at the next FOMC meeting, per the Wall Street Journal, bringing the fed funds target range to 4.00%-4.25%.
The week ahead will be critical for validating that pricing. Friday's nonfarm payrolls report and fresh inflation data—including the core Personal Consumption Expenditures (PCE) index—will test whether the labor market remains tight enough to justify further tightening, according to CNBC. August CPI data released earlier this month showed sticky inflation, with core CPI matching expectations but offering little evidence of a sustained disinflationary trend, per CNBC. That print reinforced the Fed's resolve to keep policy restrictive for longer.
Geopolitical uncertainty in the Middle East continues to inject volatility into energy and risk markets. President Trump's rejection of Iran's latest proposal to reopen the Strait of Hormuz leaves the critical shipping chokepoint in limbo, according to Reuters. While oil prices fell on Friday, the lack of a clear path to de-escalation keeps a risk premium embedded in energy markets and complicates the inflation outlook. The European Central Bank's response to the MiCAR consultation, released this month, signals ongoing regulatory coordination on digital assets as policymakers grapple with the intersection of crypto innovation and financial stability.
In Asia, Reuters noted that markets are navigating a "random walk" with oil and yields up, stocks mixed, gold down, and the dollar flat. The interplay between Fed tightening, geopolitical risk, and slowing global growth is creating cross-currents that defy simple narratives, leaving traders focused on incoming data rather than sustained directional bets.
What to Watch Next
Friday's nonfarm payrolls and inflation prints will determine whether the Fed's tightening cycle extends into early 2027 or begins to plateau. Progress—or lack thereof—on reopening the Strait of Hormuz will dictate whether oil's geopolitical premium persists or unwinds. In crypto, institutional ETF flows and regulatory clarity from the SEC's new task force will shape sentiment as the sector navigates a risk-off macro environment.
