Markets closed out the week of September 22-26 with the S&P 500 up 1.2%, the Nasdaq up 2%, and the Dow up a more modest 0.3%. That headline number hides a rougher week underneath it: stocks ripped higher Monday, gave most of it back Wednesday, and clawed back to a weekly gain by Friday, all while the bond market quietly broke a 22-year record.
How did the major indexes perform this week?
The S&P 500 gained 1.2% for the week, the Nasdaq Composite rose 2%, and the Dow Jones Industrial Average added 0.3%, a split that shows large-cap tech doing most of the lifting. The week was not a straight line: Monday's rally, Wednesday's reversal, and Friday's rebound each moved the index 0.5% to 1.5% in a single session.
Stocks opened the week strong. On Monday, September 22, the S&P 500 gained 1.5% to close at 7,764.70, the Nasdaq jumped 2.3% to 27,122.09, and the Dow rose 0.7% (366.19 points) to 52,048.83, as Treasury yields slid off recent highs and oil dropped to an 11-day low.
That reversed fast. By Wednesday, September 23, the S&P 500 fell 0.75% to 7,706.03, the Nasdaq dropped 1.13% to 26,936.04, and the Dow lost 352.10 points (0.68%) to 51,511.59, as Treasury yields marched back up on fears of further Fed tightening.
Stocks found their footing again by Friday, September 25: the S&P 500 climbed 0.51% to 7,743.41, the Nasdaq gained 0.5% to 27,068.72, and the Dow advanced 0.93% (478.64 points) to 51,828.62.
Why did stocks sell off midweek?
Wednesday's drop tracked directly with a jump in Treasury yields, driven by trader anxiety that the Fed's newly resumed hiking cycle has further to run. Equities and long-term rates have been trading as mirror images most of the month: when yields spike, richly valued tech names get repriced first, and Wednesday's Nasdaq-led decline fit that pattern almost exactly.
What is actually driving the bond selloff?
The real story of the week happened in the bond market, not the equity market. The 30-year Treasury yield broke above 5.4% on Thursday, its highest level since 2004, while the 10-year note pushed toward 5.2%, a level last seen in 2007. Both moves came as investors priced in a longer stretch of elevated inflation and heavier government bond issuance.
That 30-year move matters more than a single day's headline. A 22-year high on the long bond reprices every duration-sensitive asset at once: mortgage rates, corporate borrowing costs, and the discount rate applied to future tech earnings. Equity markets shrugging off a move like that by Friday says more about positioning than about the underlying rate pressure going away.
Why does the Fed's hike still matter a week later?
Nine days before this week began, the Fed raised its target rate a quarter point to 3.75%-4.00%, the first increase since 2023 and a reversal of the market's prior assumption that the next move would be a cut. The committee said inflation remains elevated and that the hike supports "a more timely return" to its 2% target.
That single decision is the thread connecting almost everything else in this recap. It is why long yields kept climbing into a fresh 22-year high, why Wednesday's equity selloff tracked the bond market so tightly, and why next week's jobs data carries more weight than a routine payrolls print usually would.
What happened with oil and the WTI-Brent spread?
Oil told a similar story about a market repricing risk unevenly. WTI crude traded $12.68 below Brent on Thursday, the widest spread since May, reflecting diverging supply pictures between US and international grades even as headline crude prices stayed contained. A widening spread like that usually says more about logistics and export flows than about global demand.
Where does volatility sit heading into next week?
The VIX closed at 14.87 on Friday, down 5.1% on the day and still comfortably under the 15 level that traders treat as the line between a complacent tape and a nervous one. A sub-15 VIX alongside a bond market hitting 22-year highs is the week's most interesting divergence: options markets are not pricing much equity risk even as the rate backdrop gets genuinely more hostile.
What is on the calendar next week?
The week ahead is dense with data that will either confirm or challenge the Fed's new hiking stance. Pending home sales print Monday, JOLTS job openings and Chicago PMI land Tuesday, ADP employment and the ISM Manufacturing PMI follow Wednesday, and September's nonfarm payrolls report closes the week on Friday at 8:30 AM ET.
A hot jobs number would reinforce the case for another hike at the Fed's next meeting. A soft one would reopen the debate the market thought was settled two weeks ago. Either way, this is the first payrolls report since the Fed actually moved instead of just talking about it, which makes Friday the week's real event.
Track live index levels, Treasury yields, and volatility at opticalpha.net/terminal. 14-day free trial, no credit card required.