US Stock Market Weekly Wrap: Dow Jones Crash 1012 Pts In 5 Sessions; Nasdaq, S&P 500 Fall 1%; Here's Why

The US stock market crashed significantly during the trading week from September 7th to 11th, owing to an extraordinary rally in crude oil prices and treasury yields. The Dow Jones, Nasdaq, and S&P 500 indexes found some relief in the last trading day; however, they could not rebound in weekly performance. Among other major factors, US PPI and CPI inflation data extended the odds of a rate hike from US Federal Reserve next Wednesday, which also added to frenzy selling pressure. Treasury yields are at multi-year highs, and crude oil tested almost the $110 per barrel mark this week.

US Stock Market Weekly Crash

On September 11th, the Dow Jones index ended at 52,573.29, up by 509.19 points or 0.98%. The Nasdaq 100 also recorded buying momentum as it gained by 264.93 points or 0.91% to close at 29,368.44. The tech-heavy index, Nasdaq Composite, rallied by 251.31 points or 0.96% to finish at 26,333.04. Lastly, the S&P 500 index surged by 65.28 points or 0.86% to end at 7,656.98.

The reason behind the rally on Friday was a correction in crude oil and treasury yield after four consecutive winning streak. Wall Street also halted its losing streak of four sessions in a row on Friday.

US stock indices closed higher on Friday, halting four sessions of losses as oil prices and Treasury yields paused their surge. The S&P 500 gained 0.9%, the Dow added 509 points, and the Nasdaq 100 rose 0.9%. Long-dated Treasury yields eased from multi-year highs as fuel prices refrained from extending this week's rally, which was fueled by a wave of strikes between the US and Iran in the Persian Gulf. High energy prices were expected to worsen an already elevated inflation outlook, with headline inflation at 3.4% in August, reinforcing bets that the Fed will raise rates on Wednesday, as per Trading Economics.

Among stocks, Alphabet gained by 1.5%, Amazon surged 2%, JP Morgan rose 1%, while chipmakers like AMD rallied 2.5%, Intel zoomed 3%, and Dell skyrocketed by nearly 12% to hit an all-time high. Oracle stock price plunged 2% despite reporting robust quarterly earnings.

However, overall for the week, the Dow Jones crashes 1,011.60 points or 1.9%, making it the biggest loser of the week. All other indices were also in deep red but faced lesser bears compared to Dow Jones.

The Nasdaq 100 has plunged 171.13 points on week-on-week performance, while its counterpart, the Nasdaq Composite, recorded 254.86 points or 0.96% weekly decline. Also, the S&P 500 index posted a weekly drop of 93.21 points or 1.20%.

Explaining the performance, Jim Ferraioli, Director of Digital Currencies Research and Strategy at Charles Schwab in a note said, "Market participants continued to closely monitor economic data for clues on inflation trends and whether economic activity can continue to support equity valuations. Energy prices remained a focal point, as the move higher in oil cascaded to higher bond yields with increasing volatility.

US CPI Inflation

US CPI inflation came steady at 3.4% in August 2026, also in-line with market estimates. But gasoline prices climbed to 27.4% YoY, higher than 24.6% in July. Fuel oil prices also increased sharply to 52% in August, compared to 39.1% in the previous month.

"The immediate focus will be on U.S. inflation and the Federal Reserve's policy decision. The September 11 inflation report showed headline CPI rising 0.4% month-on-month and holding at 3.4% annually, while core inflation increased 0.3% from the previous month but eased to 2.4% year-on-year. The firmer monthly reading keeps inflation risks in focus and could reinforce pressure on global bond yields and the dollar, particularly if the Federal Reserve adopts a more hawkish tone," said Hariselvan Radhakrishnan, Founder & CEO of HST Wealth.

Another notable theme this week was sector rotation.

As per Ferraioli, leadership continued to fluctuate as prior leaders, specifically Financials and Healthcare, began to weaken while Energy moved toward the top of the leaderboard amid strength in oil markets.

Despite some hotter-than-expected inflation data and seasonal weakness, there has been a lack of strength in more traditionally defensive groups, such as Staples and Utilities, which are also sitting at relative lows vs the S&P 500. Prices tended to consolidate in more cyclical sectors, such as Tech, Communication Services, and Discretionary.

Furthermore, Schwab's strategist said, on the earnings front, second quarter earnings have largely come to a close, shifting investor attention away from backward-facing results and more towards the outlook for economic growth, inflation, and monetary policy. Perhaps most importantly, investors most likely spent much of the week positioning ahead of next week's Federal Open Market Committee (FOMC) meeting.

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