For the past five years, the S&P 500 has averaged a 4.2% decline in September. This year began no differently. On the first trading day of the month, the S&P 500 dropped 0.69%.
But the reason behind the slide is slightly different than usual.
U.S. stocks fell Tuesday as investors weighed two forces: the latest trade developments and rising bond yields.
Tariffs are Illegal?
A federal appeals court ruled that most of Trump’s tariffs are illegal. In a 7–4 decision, the U.S. Court of Appeals for the Federal Circuit said only Congress has the authority to impose tariffs. The case now heads to the Supreme Court, with the Trump administration calling the ruling “highly partisan.”
Markets Hate Taxes but Love Revenue
Bond markets also felt the shock. Demand for Treasurys fell, pushing yields higher, as investors considered the possibility that Washington may need to refund billions collected from tariffs. That possibility amplifies concerns about America’s worsening fiscal position and rising deficits.
In short, the markets never liked tariffs, but they’ve also grown used to the revenue. That uneasy dependence is confusing and has spooked investors.
Other News
Here are some other news items that you might find interesting.
Fed Governor Lisa Cook ‘did not ever commit mortgage fraud,’ her lawyer says.
Judge lets Google keep Chrome but orders other penalties in major antitrust ruling.
Gen Z slashes holiday budgets ahead of shopping season.
Kraft Heinz went all-in on scale. Now it’s banking on a breakup to save its business.
Might add India continuing to buy Russian oil and shrugging off tariffs -- this actually reduces upward pressure on oil prices, as India is buying from Russia at previously agreed discounted prices. Will have an effect on US consumption of Indian B2B services.
Also, we got the image of a sitting US President benefiting from his own pro-Crypto policies by launching a new token and increasing his family's wealth by a cool $5 billion...
I'm not sure I understand the reason behind recent conglomerate spin-offs. It worked for Johnson & Johnson and GE but those companies had a bunch of different businesses mashed together. For these recent food ones (Kellogg, Keurig/DP, and Kraft Heinz) it doesn't quite make as much sense from an ongoing concern perspective. Maybe the idea is just to set one part off on its own as a target for private equity.