U.S. stocks steadied Wednesday morning as the S&P 500 and Dow Jones Industrial Average attempted to recover from Tuesday’s selloff, while the Nasdaq remained slightly lower under pressure from elevated Treasury yields. Wall Street is weighing softer private-sector hiring and strong artificial intelligence demand against renewed U.S.-Iran fighting, higher oil prices and a 10-year Treasury yield hovering near 4.8%.
Around 10 a.m. Eastern time, the S&P 500 was up about 0.1%, while the Dow gained roughly 189 points, or 0.4%. The Nasdaq Composite was down about 0.1%, reflecting continued pressure on technology shares.
Dow Jones Tries to Recover After 50-Day Average Break
The rebound follows a difficult opening session for September. The Dow dropped 419.02 points, or 0.8%, Tuesday to 52,766.88, while the S&P 500 fell 0.7% and the Nasdaq lost 1%. Rising oil prices and Treasury yields weighed heavily on risk appetite.
Dow Jones 50-Day Moving Average Breakdown. Source: Barchart (@Barchart) on X
Barchart highlighted that Tuesday’s decline pushed the Dow below its 50-day moving average for the first time since April. The index had spent much of the spring and summer above that trend measure, making the break a notable deterioration in short-term momentum.
Wednesday’s recovery therefore has a technical test attached to it. A sustained move back above the 50-day average would reduce some of the immediate pressure, while failure to reclaim it could leave the Dow vulnerable to another leg lower.
September Seasonality Adds Another Test for Wall Street
The calendar is also working against stocks. September has historically been the weakest month for major U.S. equity indexes, adding another layer of caution after Tuesday’s sharp start to the month.
Best and Worst Months for Stocks. Source: Jesse Cohen (@JesseCohenInv) on X
Cohen noted that the S&P 500 has averaged a decline of about 0.7% in September over the past decade. The historical weakness does not determine what happens in 2026, but it increases attention on whether the market can absorb rising yields and geopolitical risk without losing its broader uptrend.
S&P 500 Valuation Leaves Less Room for a Yield Shock
Stock valuations remain another important consideration as Treasury yields move toward 5%. Higher bond yields can make equities less attractive relative to fixed-income assets and are particularly important for technology companies whose valuations depend heavily on future earnings.
S&P 500 Forward 12-Month P/E Ratio: 10 Years. Source: Hedge Vision (@HedgeVision) on X
FactSet reported a forward 12-month S&P 500 price-to-earnings ratio of 19.6 in its update, slightly below the five-year average of 19.9 but above the 10-year average of 19.0.
The 10-year Treasury yield was around 4.8% Wednesday after reaching its highest level since January 2025. A move toward 5% could put renewed pressure on equity valuations, particularly if it occurs quickly.
Weak Jobs Data Meets Strong AI Demand
The latest labor report offered stocks some support. ADP said private employers added only 38,000 jobs in August, below economists’ forecast for 48,000 and down from an upwardly revised 46,000 in July. Manufacturing lost 17,000 jobs, while professional and business services shed 16,000.
Investors will now turn to Friday’s government employment report for a clearer picture of the labor market and the Federal Reserve outlook.
Corporate earnings are providing a counterweight to the macro risks. Dell Technologies rallied after raising its annual revenue forecast to $192 billion as demand for AI-optimized servers remained strong. The company received more than $130 billion in AI server orders over the past year, reinforcing confidence that infrastructure spending remains resilient.
Broadcom reports earnings after Wednesday’s closing bell, giving investors another major test of AI demand.
For the S&P 500 and Dow Jones, Wednesday’s early rebound shows buyers have not abandoned the rally. But with the Dow trying to recover its 50-day average, Treasury yields threatening 5% and historically difficult September trading underway, Wall Street still faces several hurdles before the latest pullback can be considered over.
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