Stocks Fall, Yields Rise on 'Triple Witching' Day

Published as of: September 18, 2026, 9:13 a.m. ET

(Friday market open) Major indexes turned mostly lower early, backtracking from Thursday's wide rally as Treasury yields ticked higher. The yield rise came after the Bank of Japan raised rates, an expected move that lifted borrowing costs there to a 31-year high. The central bank hinted at more hikes ahead.

Today is "triple witching" day, when options and futures expire for various traded products, possibly fueling increased trading activity and volatility. Volatility could accelerate again next week as more position shifting takes place before the end of the quarter in what's traditionally called "window dressing" season. That said, the Cboe Volatility Index (VIX) declined yesterday following the Federal Reserve's rate hike, which removed  some uncertainty. Several Fed speakers are on tap today and next week, possibly shedding light  on the decision.

Major indexes climbed yesterday for the second time in nine sessions as oil and yields retreated. The S&P 500 Index is down less than 1% week to date and less than 1% so far in September. The tech-heavy Nasdaq-100^® (NDX) is up this week. "From a bullish perspective, while oil prices have pushed back higher over the past six weeks, the consumer remains resilient, and bond yields are higher but not 'running away,'" said Nathan Peterson, director of derivatives research and strategy at the Schwab Center for Financial Research (SCFR)."

1. Dropping anchor on rates: The Fed's 25-basis point hike Wednesday was arguably all about anchoring inflation expectations, which can spiral when it's anchors away. Those pesky expectations edged up to 3.4% from 3.3% in the preliminary August University of Michigan Consumer Sentiment report. "We believe rate hikes can help keep a lid on long-term yields if they keep inflation expectations anchored," said Collin Martin, head of fixed income research and strategy at SCFR. "Follow through by the Fed can also lend it credibility." The Fed risked "weighing anchor" by hemming and hawing while inflation stayed above its 2% target for more than five years. The hike likely calmed things for now, reflected in a modest Treasury yield decline yesterday. It won't likely slow price growth, however, especially when inflation is closely tied to an energy price shock. Without another hike later this year, the market could start to again question Fed commitment unless inflation readings cool appreciably in the months ahead.
    
2. Gasoline demand slows as times change: Despite expectations for an increase, U.S. crude oil inventories fell 600,000 barrels last week to 423.4 million, the government said. Gasoline demand dropped 1% year over year to 8.8 million barrels a day. That's roughly the same gasoline demand the U.S. averaged 25 years ago, and down from record highs near 10 million in 2019. Lower gas demand this century reflects many factors, including more people working at home, efforts by transport companies to improve efficiency, and the popularity of hybrid and electric vehicles. Hybrids accounted for a record 14% of U.S. auto sales in the first quarter, according to researcher Cox Automotive. All this is great for companies overseas that dominate hybrid manufacturing, but only one of the top 10 biggest selling hybrids is made by a U.S. company. Ford (F) sells the most hybrids of any U.S. manufacturer and has said nearly all its vehicles will have a hybrid or multi-energy powertrain choice by the end of this decade. However, hybrids come with a higher cost of entry for consumers strapped by rising interest rates.
    
3. Checking under the market's hood: Yesterday's rally did little to improve market breadth. Only 31% of S&P 500 stocks trade above their 50-day moving average. About 50% trade above their 200-day moving average, while the S&P 500 Index itself clawed back after dropping below its own 50-day. Drops under that line earlier this year preceded rallies, but the last time breadth fell to these depths, in March, the index took more than a month to recover. Eight of 11 sectors are down over the last month. More positively, the S&P 500's Relative Strength Index (RSI) bounced off one-month lows near 40 and edged near 50 Thursday, a resilient sign. The market is fighting seasonal pressure. Late September is traditionally a rough thicket and lack of earnings removes a positive catalyst. For now, the index's ability to hold the 50-day moving average of 7,615 may be a technical victory of sorts. Recent price action has been notably calm, with the S&P 500 avoiding a 1% down day for 36 trading sessions, according to Bloomberg data. This underscores how durable risk appetite has been.

• Berkshire Hathaway (BRK.B) slipped after 96-year-old Warren Buffett announced he's stepping down as chairman and now will be chairman emeritus. Buffett's son Howard now takes over his role. Greg Abel took over from Buffett as CEO at the start of this year.
   
• Netflix (NFLX) dropped 3% early as Wells Fargo downgraded shares to underweight from equal weight and said the company's engagement trends "look worrying."
   
• Xenon Pharmaceuticals (XENE) tumbled 23% early after a clinical setback in the study of its lead drug for major depressive disorder and bipolar depression, Barron's reported. The company submitted the drug for approval to treat focal seizures.
   
• Crude fell 1% today, though that partly reflected the roll to the new active November CME futures contract. Worries persist about Middle East supplies amid continued violence between Saudi Arabia and Iran-backed Houthi rebels in Yemen.
   
• Major European indices are tracking to end lower this week. Asian stocks ended mostly higher, with Japan's Nikkei up 1.6% for the week.
   
• AI server stocks like Hewlett Packard Enterprise (HPE) and Super Micro Computer (SMCI) posted sharp gains Thursday, a sign that some of the AI slowdown worries of early this week faded. Strength in server and chip stocks yesterday came after Nvidia (NVDA) said it sees chip sales doubling next year.
   
• Arm Holdings (ARM) rose 8% Thursday after the company's CEO told CNBC he's more confident Arm's new AI chip can meet a $2 billion revenue goal.
   
• Financial sector stocks generally are headed for a lower week, hurt by yield curve flattening that occurred in the Treasury market after the rate hike. This type of move in yields tends to hurt bank industry profits.
   
• Lucid (LCID) rose 6% Thursday on a Bloomberg report that the EV maker has finalized its work with restructuring advisers.
   
• Workday (WDAY) rose 6% Thursday after CNBC reported "more optimism" about a possible effort to take the company private.
   
• CoreWeave (CRWV) fell 4% Thursday after launching a $3 billion convertible debt sale, Reuters reported.

Double duty for Fed: Investors heard again from the Fed this week about its dual mandate of maximum employment and price stability. In our new article, learn how these two goals can counterbalance and what they tell investors about Fed policy.

Hedging with futures: Schwab's newest explainer video examines what to consider when hedging a portfolio with futures, including what to trade, when to trade, and how much to trade.

The sharp rise in U.S. crude futures (/CL—blue line) over the last three months has taken a toll on the Dow Jones Transportation Average ($DJT—candlesticks). This week, trucking firm J.B. Hunt Transport said it expects higher costs to reduce third quarter earnings, and airline companies said they might have to reduce capacity due to rising fuel expenses.

Check out the investors' calendar for a summary of the top economic events and earnings reports on tap this week.

September 21: No major earnings or data expected.
September 22: Earnings expected from AutoZone (AZO) and KB Home (KBH).
September 23: Expected earnings from Cintas (CTAS), Paychex (PAYX), and General Mills (GIS).
September 24: August new home sales and expected earnings from Darden Restaurants (DRI) and Costco (COST).
September 25: August durable goods orders and final September University of Michigan Consumer Sentiment.