Yields above 5% hit the rate-sensitive sectors

The bond market set the tone last week, and this week's question is whether it keeps doing so. The Federal Reserve raised its policy rate by 25 basis points to a range of 3.75% to 4% on Wednesday in a 12-0 vote, its first hike since 2023, and the median projection shows one more increase before year end. The 10-year Treasury yield pushed above 5%, its highest level since 2007, and finished the week hovering right around that mark.

Our sector data reads like a duration trade. Utilities (-3.04%), Financials (-2.43%) and Real Estate (-2.05%) were the three worst groups, while Health Care (+1.83%) and Information Technology (+1.03%) were the only sectors to gain. The S&P 500 slipped 0.09% and the Nasdaq-100 rose 0.92%, so the index moves masked wide dispersion underneath.

This week the calendar turns quiet on data and loud on commentary. It shows at least ten Fed appearances, starting with Chicago Fed President Austan Goolsbee on Monday, while scheduled releases are second-tier: regional Fed surveys on Tuesday, S&P Global flash PMIs on Wednesday, jobless claims and new home sales on Thursday, and durable goods plus final University of Michigan sentiment on Friday. With few hard numbers, how officials describe the path after the hike, and how Treasury yields respond, is the signal for whether last week's rotation extends.

Oil is the swing factor behind those yields. WTI fell 7.9% last week but is still up 6.3% over the month, after Saudi Arabia shut a critical pipeline that bypasses the Strait of Hormuz and later reports of crude transfers through Oman eased fears of a full export stoppage. Energy slipped 1.27%. Calmer crude would take pressure off inflation expectations, while a renewed supply scare would do the opposite.

Utilities, Financials and Real Estate absorbed the sharpest losses last week as the 10-year Treasury yield moved above 5%. These groups tend to be priced off long-term rates, either because their cash flows are bond-like or because their funding costs and asset values move with them, so a higher discount rate tends to show up quickly in share prices. Housing is the most visible transmission channel to the consumer. Lennar (LEN) missed EPS estimates by 6.5% in last week's results within our tracked universe, an early read on how the housing chain is absorbing higher financing costs. KB Home (KBH) reports Tuesday, and Thursday's new home sales data will add a demand read. Blackstone Mortgage Trust (BXMT), which reports Thursday, sits on the credit side of commercial real estate, where refinancing costs are the main variable. The setup to watch is whether yields stabilize near 5% or push higher. Last week's sector moves suggest the market is still working out what a higher-for-longer policy path means for leveraged and long-duration assets, and company commentary on orders, margins and financing this week will show how much of that repricing is already reflected.

Commodities split last week. Copper rose 7.9% and silver 5.8%, while WTI crude fell 7.9%. Copper had already set a record on the London Metal Exchange earlier in the month, and its 5.7% one-month gain shows the move has continued. Gold added 1.0% but is still down 3.8% over the month, so the strength is concentrated in industrial metals and silver rather than in a broad flight to havens. Energy lost 1.27% as crude pulled back from supply-scare highs, yet WTI is still up 6.3% over the month, and the Saudi pipeline shutdown and the Strait of Hormuz remain the swing factors. Equities tied to these moves include Freeport-McMoRan (FCX) on copper, Paramount Gold Nevada (PZG), which reports Wednesday, on precious metals, and Uranium Energy (UEC), which reports Friday, in the wider resource complex. Evolution Petroleum (EPM) missed EPS estimates by 492.2% last week, a reminder that commodity prices and reported earnings do not always move in step. What to watch: whether copper holds its gains and whether crude's pullback persists.

Information Technology (+1.03%) and Health Care (+1.83%) were the only sectors in the green, and the Nasdaq-100 outperformed the S&P 500. Our catalyst radar flagged unusual option volume last week across mega-cap technology names including Microsoft (MSFT), Meta (META) and Nvidia (NVDA), along with congressional stock trade disclosures on the same names. Those are attention signals, not forecasts, but they show where positioning activity concentrated while the index held steady. Within health care, our radar also flagged three BioNTech (BNTX) phase 3 readouts: pumitamig (BNT327) in first-line triple-negative breast cancer in China, gotistobart in second-line-plus squamous non-small cell lung cancer, and BNT113 in first-line HPV16-positive, PD-L1-positive head and neck cancer. Binary trial events like these can move single stocks independently of the macro backdrop. The question worth tracking is durability. Mega-cap technology has held up through a rate shock, and the test is whether that resilience survives if yields push meaningfully higher or if earnings momentum fades. Health care's lead, meanwhile, came in a week when most cyclical and rate-sensitive groups lost ground.

Monday: Chicago Fed National Activity Index for August and the first of at least ten Fed appearances, including Chicago Fed President Austan Goolsbee. Tuesday: Philadelphia Fed Non-Manufacturing Survey at 8:30 AM ET and Richmond Fed Manufacturing at 10:00 AM ET, with AutoZone (AZO), Ferguson Enterprises (FERG) and KB Home (KBH) among the reports. Wednesday: S&P Global flash manufacturing and services PMIs at 9:45 AM ET, alongside earnings from Cintas (CTAS) and Paychex (PAYX), two read-throughs on business and employment activity. Thursday: initial jobless claims at 8:30 AM ET and new home sales at 10:00 AM ET, then Costco (COST) after the close with its call at 5:00 PM ET. Darden Restaurants (DRI), Blackstone Mortgage Trust (BXMT) and Td Synnex (SNX) also report. Friday: durable goods at 8:30 AM ET and final University of Michigan consumer sentiment at 10:00 AM ET, with Uranium Energy (UEC) closing out our calendar. Throughout the week, Fed commentary on the path after the September hike and the 10-year yield near 5% are the cross-currents to track.