Fed rate hike odds hit 62% as Wall Street slides
Published on September 10, 2026
US markets are trading on one question right now: does the Fed hike next week? Traders put the odds of a quarter point Fed rate hike on September 16 at 62%, up from 44% a month ago. Wall Street has now fallen three sessions in a row, and the two inflation prints due today and Friday will settle the argument.
Three down days and indexes losing altitude
The S&P 500 closed Wednesday at 7,636, down 0.48%. The Dow Jones fell 0.77% to 52,381 and the Nasdaq Composite lost 0.64% to 26,253. Small caps took the worst of it, with the Russell 2000 down 1.3%. Only one S&P 500 sector finished higher: energy, up 1.1%.
The engine of the move sits in the bond market. The US 10-year yield rose to 4.84%, its highest since November 2023 according to Investing.com, while the 30-year is closing in on 5.29%. When risk free money pays that well, equities look expensive, and long duration growth names look worst of all.
Futures are clawing back a little ground this morning. The S&P 500 contract is up 0.1% near 7,654, the Nasdaq 100 adds 0.1% and the Dow gains 0.2%. Asia did not join in: the Hang Seng dropped 1.4% and the MSCI Asia Pacific 0.8%.
Why a Fed rate hike is back as the base case
A month ago almost nobody was positioned for it. Kevin Warsh's Jackson Hole speech flipped the setup, pushing odds from roughly 30% to 56% and then to 62% today, per the CME FedWatch tool. The FOMC meets on September 15 and 16.
The Street is far from unanimous. Mark Malek at Siebert Financial put it plainly: oil at 100 dollars is not going to make Warsh's job any easier. BlackRock says a hot inflation print would likely tip the balance toward a hike. On the other side, Jason Pride and Michael Reynolds at Glenmede tell investors to resist treating a hike as a settled outcome, in comments carried by Kiplinger. That split is why indexes are drifting lower rather than gapping down.
Oil at 100 dollars is doing the damage
Brent pushed back above 101 dollars, its first move over the century mark since July, as tensions between Washington and Tehran over the Strait of Hormuz refuse to cool. Crude is up roughly 25% in a month. US gasoline hit 4.22 dollars a gallon, a record for early September.
That is the link back to the Fed. Energy costs bleed into freight, manufacturing and food. A commodity shock turns into sticky inflation, which is exactly what the central bank wants to avoid heading into a meeting. It also explains why a single commodity is now steering the whole US equity market.
PPI today, CPI tomorrow
The producer price index lands at 8:30 a.m. ET. Consensus looks for +0.4% month over month and +5.3% year over year after a flat July, with core seen at +0.3%. Weekly jobless claims print at the same time.
August CPI follows Friday at 8:30 a.m. ET, with consensus at +0.4% month over month and 3.4% year over year. That is the last inflation reading before the Fed decides. If you are running a funded account, both windows deserve smaller size. Our prop firm challenge guide covers how to handle data days like these.
Key levels today
| Instrument | Level (support / resistance) | Move (September 9 session) | Scenario / What to watch |
|---|---|---|---|
| S&P 500 | Support 7,630 then 7,600, air pocket to 7,500 | -0.48% | Below 7,600 there is nothing until 7,500 according to Michael Kramer (Mott Capital) |
| WTI | Broke 94 dollar resistance, target 101 dollars | +3.1% | Holding above 94 keeps the inflation trade alive |
| Gold (XAU/USD) | Support 4,345, resistance 4,443 | +0.1% | Hot PPI opens a slide toward 4,300; soft PPI puts 4,443 back in play |
Economic calendar
- 8:30 a.m. ET, August PPI. Core above +0.3% makes a hike close to a done deal and hits tech hardest. A miss on the downside and the S&P 500 can retest 7,700.
- 8:30 a.m. ET, jobless claims. A high number would remind traders the economy is cooling and shave some hike odds.
- Friday 8:30 a.m. ET, August CPI. Above 3.4% year over year the dollar rallies and gold breaks lower. Below it, the no change case returns to pricing fast.
- Wednesday September 16, 2:00 p.m. ET, Fed decision. The press conference will matter as much as the vote.
The bottom line
Wall Street is three sessions lower because expensive crude and rising long yields have made a Fed rate hike credible again. Thursday's PPI and Friday's CPI decide whether the market is right to believe it.
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This is not investment advice. Informational content only.