Four US releases landed on Tuesday and none of them decided the session. New US strikes on Iran sent crude up roughly 5%, and almost everything that followed was priced off that.

1. Oil set the discount rate, and equities paid. The S&P 500 closed down 0.71% at 7,631.47, the Nasdaq Composite fell 1.03% to 26,099.77, and the Dow shed 419.02 points to 52,766.88. The 10-year Treasury yield rose about four basis points to 4.80%, its highest since January 2025. Higher crude feeds headline inflation, headline inflation feeds a Federal Reserve already leaning hawkish under Kevin Warsh, and a higher risk-free rate compresses the multiple on long-duration earnings hardest. The Nasdaq trailing the S&P by roughly 30 basis points is that mechanism in miniature. Energy was among the handful of sectors higher on the day; consumer discretionary was the weakest.

2. ISM manufacturing lost ground where it matters. The headline index fell to 54.6 in August from 55.6, missing the 55.2 consensus, an eighth consecutive month of expansion but at a slower pace. The composition was worse than the headline. New Orders dropped 3.0 points to 53.7, Backlog of Orders fell 3.2 to 51.8, and Imports fell 3.2 to 52.5. Employment shed 1.6 points to 51.2. ISM’s Susan Spence noted that a 54.6 reading historically corresponds to about 2.4% annualised real GDP growth, so this is deceleration rather than contraction.

3. Prices Paid refused to move. The ISM Prices index printed 71.1, unchanged from July and a whisker under the 71.2 forecast. That marks a 23rd straight month of rising input costs. With crude climbing, the one index that would need to fall before the Fed could soften is the one sitting perfectly still.

4. Job openings missed, and the base moved. JOLTS showed 7.271 million openings in July against a 7.330 million forecast. The calendar carried 7.359 million as the prior figure, but the BLS revised June down by 177,000 to 7.182 million, so measured against the revised base openings actually rose. Hires held at 5.1 million, though professional and business services hiring fell 188,000. Quits stayed at 3.1 million and layoffs showed no acceleration.

The awkward part is that softer labour data offered equities no support at all. When the Fed’s stated worry is inflation rather than employment, a cooling jobs market stops working as a rate-cut argument. S&P Global’s final manufacturing PMI, revised up to 53.9 from a 53.2 flash, made the same point from the other direction: output growth slowed to its weakest since February, and the firms surveyed blamed Middle East supply delays and rising prices.

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