Key points this morning (summarized in 3 lines)
-
Fed Governor Waller hinted at the necessity of additional rate hikes. He stated that while there is flexibility in timing, they must be implemented “within an acceptable timeframe.”
-
WTI crude oil surged +3.32% due to the ongoing US-Iran war. Concerns over reignited inflation rose, causing the SOX (Semiconductor Index) to drop significantly by -3.39%.
-
Nikkei 225 futures are weak at -1.72% (68,385) compared to the previous session. With CPI and PPI announcements coming next week, Japanese stocks are likely to start the day in a cautious mood.
Interest rate movements (why they moved)
The US 10-year Treasury yield fell slightly to 5.22% (-0.06pt from the previous day), and the 30-year yield fell to 5.60% (-0.07pt). The 3-month yield remained almost flat at 4.23% (+0.01pt).
The background to the slight decline in long-term interest rates is ‘buying back in reaction to the rate hike expectations becoming too strong’ from the previous day. However, the level remains high at 5.22% for the 10-year, which is an increase of over 1pt compared to about a year ago (4.11%).
Listen closely. According to official US Treasury data, the 10-year to 2-year yield spread (the yield curve, which reflects the future of the economy) is in positive territory at 0.47pt. This is close to the 0.51pt level from about a year ago, and the inversion (recession signal) has been resolved. However, the 30-year mortgage rate has risen further to 7.4% (as of 2026-10-08) from 7.28% the previous week. The cost of buying a home continues to rise, which is becoming a burden on the real economy.
With Governor Waller’s statement that ‘additional rate hikes will be necessary if the data supports it’ overlapping with the view in the September FOMC minutes that ‘the majority believe additional rate hikes this year are appropriate,’ the structure of high interest rates is unlikely to change for the time being.
Stock index movements (why they moved)
The Dow held steady at +0.10%, but the NASDAQ fell -1.25% and the SOX (Semiconductor Index) dropped significantly by -3.39%.
The composition is simple. Rising oil prices -> concerns about reignited inflation -> expectations of additional rate hikes -> growth stocks (stocks bought for future growth expectations, whose value tends to fall when interest rates rise) that are weak against rising interest rates were sold off. The combination of Waller’s remarks and the minutes intensified selling pressure on the AI and semiconductor sectors.
The Dow held its ground because traditional, cyclical large-cap stocks were relatively resilient. The decline in the NASDAQ and SOX indicates that the market is once again pricing in a ‘higher for longer’ interest rate scenario.
Furthermore, as of early this morning, S&P 500 futures are up +0.64%, NASDAQ 100 futures are up +0.75%, and Dow futures are up +0.47% compared to their cash closing prices. The fact that President Trump denied an attack on Iran before the midterm elections may be supporting futures as geopolitical tensions have eased slightly.
Gold and commodity movements (why they moved)
WTI crude oil is up significantly at $91.21 (+3.32%). As the US-Iran war (in its 8th month) continues, reports that tanker attacks in the Strait of Hormuz have reached a weekly high have pushed up prices. Reports that the Pentagon has issued instructions to prepare for the resumption of large-scale operations have also emerged, shaking market sentiment due to supply concerns.
However, official statements from US Central Command (CENTCOM) state that ‘freedom of navigation in the Strait of Hormuz is secured, and commercial cargo including 20 million barrels of crude oil is passing through,’ which contradicts Iran’s claims of a ‘blockade and total control.’ Caution is required in grasping the reality.
The IEA’s announcement of accelerated release of approximately 100 million barrels of oil reserves and President Trump’s denial of an attack have capped some of the upside.
Gold (NY futures) is slightly positive at $4,154.40 (+0.33%). In a rising interest rate environment, the holding cost of gold (opportunity cost = profit if invested elsewhere) increases, which is a downward factor, but demand for a safe haven against geopolitical risks has provided support. Silver is down -0.80% and copper is down -0.48%, showing weakness and reflecting demand concerns for industrial metals.
Crypto asset movements (why they moved)
Bitcoin is at $81,746 (-1.84%) and Ethereum is at $2,463.80 (-4.26%), both showing declines.
In a risk-off environment characterized by rising oil prices and interest rates (a move away from risk toward safe-haven assets), crypto assets are in a position where they are easily sold. In particular, Ethereum’s 4.26% drop is larger than Bitcoin’s, revealing a structure where speculative capital is prone to exiting.
Economic Indicators, Official Statements, and Geopolitics (What has been released / What is coming up)
[Indicators Released]
The weekly initial jobless claims released on the 8th were 197,000, a decrease from the previous week’s revised figure, indicating a robust labor market. Continuing claims have increased, revealing the reality that once unemployed, it takes time to find re-employment.
The U.S. unemployment rate (as of FRED, 2026-09-01) is 4.2%, a slight increase from the previous month’s 4.1%, showing a trend of gradual softening. In the September employment report (released on the 2nd), non-farm payrolls fell significantly below expectations, average hourly earnings also missed expectations, and the figures for July and August were revised downward. This served as the basis for the retreat in expectations for a rate hike at the October meeting.
The effective federal funds rate was 3.75% as of 2026-09-01. This is down from 4.22% about a year ago, marking a phase where rate cuts have been implemented. However, Governor Waller has stated that “if the data warrants it, additional rate hikes will be necessary and should be implemented within an acceptable timeframe,” keeping the possibility of resuming rate hikes in focus.
The CPI (headline index as of 2026-08-01) rose to 334.131 from the previous month’s 332.813, and the core CPI also rose to 337.765 from the previous month’s 336.789. Inflation has not completely subsided, and there is a risk that rising oil prices will push the next figures even higher.
The U.S. high-yield bond spread (the yield difference between high-credit-risk corporate bonds and U.S. Treasuries, a measure of market stress) is 3.09pt (as of 2026-10-07), widening from the previous 3.03pt, indicating that credit anxiety is gradually increasing. It is also up from 2.82pt about a year ago, data showing that the market’s “sense of security” is thinning.
[VIX (Quality of Volatility)]
The VIX (fear index, a measure of market anxiety) is at 15.08 (as of 2026-10-07), which is not a particularly high level, but one should not simply interpret this as “peace of mind.”
Looking at the VIX term structure, the VIX1D (1-day implied volatility = the 1-day fluctuation range expected by the market) is 10.40, the VIX30D is 15.56, and the VIX3M (3-month) is 18.14. This is a “normal yield curve” where the short term is lower than the long term, meaning sudden, immediate panic is not being priced in.
The S&P 500’s 20-day realized volatility (the magnitude of actual price fluctuations) is 10.14% per annum, while the VIX is 15.56, exceeding it by about 5.42pt. The market is more cautious than the reality, anticipating that “things might get rough from here.” Keep in mind that when this gap is large, it is prone to swinging in the opposite direction given any trigger.
[Key Indicators for This Week and Next Week]
There are no major indicator releases on the calendar for today (10/9), but important indicators will follow next week.
-
10/14 (Wed): U.S. CPI (Consumer Price Index) The focus is on whether the impact of high oil prices will appear in the figures. Governor Waller has explicitly stated that “if the data warrants it, there will be a rate hike,” so if the numbers come in higher than expected, expectations for an additional rate hike could intensify all at once.
-
10/15 (Thu): U.S. PPI (Producer Price Index), U.S. Retail Sales, U.S. Initial Jobless Claims You can confirm whether corporate-side cost increases are continuing.
With the CPI and PPI coming up next week, the market environment is not conducive to aggressive buying heading into the weekend and the start of next week. Keep in mind that the indices are in a phase where they are prone to swinging up and down.
[Geopolitics]
The U.S.-Iran war is now in its 8th month. While the official CENTCOM statement says “passage through the Strait of Hormuz is secured,” there are reports that tanker attacks have reached their highest weekly level, indicating that the reality is a continuing tug-of-war. President Trump has stated that “there will be no attack on Iran before the November midterm elections” and “the war will end soon,” while also mentioning that “negotiations are productive.” No official announcement of a ceasefire or cessation of attacks has been confirmed.
Outlook for today’s Japanese market
Today is a regular business day for the Tokyo market.
Nikkei 225 futures are showing clear weakness at 68,385 (-1.72% from the previous session) as of 04:50 JST on 2026-10-09. Even compared to the final closing price of the underlying index (there is a delay in yfinance, so the previous day’s level needs to be confirmed separately), the futures level is pulling the opening price significantly lower.
In contrast to S&P 500 futures (+0.64%) and NASDAQ 100 futures (+0.75%) which have turned positive compared to US spot prices, the Japanese market is being dragged down by the decline in semiconductor and AI-related stocks (SOX -3.39%) and the high number of constituent stocks that are easily hit by the impact of rising crude oil prices.
The dollar-yen is moving slightly toward a stronger yen at 157.87 yen (-0.27%), which could also be a headwind for export stocks. Although the movement is small, as the -1.72% figure for futures indicates, you should expect the opening to test lower levels.
With the CPI announcement (10/14) coming up next week, the market environment makes it difficult for aggressive buying to enter over the weekend and into the beginning of next week. While confirming the impact of rising crude oil prices and Waller’s remarks, the index may move to explore lower ranges.
Outlook for today’s US market
In today’s US market, there are no major indicator announcements on the calendar this week. The market’s focus is on next week’s CPI (10/14) and PPI (10/15), so today is likely to be centered on wait-and-see and position-adjustment moves.
As of early morning, futures are in positive territory with S&P 500 futures at +0.64% and NASDAQ 100 futures at +0.75%, as President Trump’s remarks about “denying attacks and progress in discussions” have eased excessive caution regarding geopolitical risks.
However, crude oil has risen to the $91 level, and caution regarding a resurgence of inflation has not disappeared. The weight of Governor Waller’s hint at additional rate hikes combined with the minutes remains. Even if it opens higher, caution is required regarding the heavy upside for growth stocks and the semiconductor sector, which are sensitive to high interest rates.
The fact that high-yield bond spreads are gradually widening and that the VIX is more than 5 points above realized volatility also indicates that the market is feeling stress beneath the surface. Rather than jumping into optimism on the back of positive futures, this is a phase to calmly watch the situation until next week’s CPI is released.
Summary (*Personal analysis. Invest at your own risk)
What is driving the current market are two things: “rising crude oil prices (Iran geopolitics)” and “the Fed’s signal to resume rate hikes.”
The levels of WTI crude oil at $91.21 and the US 10-year Treasury yield at 5.22% are both significantly higher than they were a year ago. Inflation is rearing its head again, and if next week’s CPI (10/14) comes in higher than expected, there is a possibility that expectations for rate hikes will strengthen further.
As indicated by the -1.72% in futures, today’s Japanese market is expected to start lower. Although US futures have turned positive, this is not a phase to move aggressively before next week’s indicator announcements.
Take today’s report card home with you.
