Markets are pricing in roughly a 92% probability of a 25-basis-point rate hike by the Federal Reserve on Wednesday, marking the first rate hike since 2023, as inflation remains well above target and the energy shock stemming from the war with Iran continues to weigh on the outlook. The September Fed meeting kicked off Tuesday and concludes on Wednesday with the central bank's latest policy decision. With the labor market steady and energy prices keeping inflation elevated, it's widely expected that the Federal Reserve will vote to raise the federal funds rate for the first time since 2023.
The benchmark 10-year Treasury yield climbed to its highest levels in 19 years on Tuesday as oil prices surge from the Iran conflict and expectations grow that the Federal Reserve will raise interest rates on Wednesday. The yield on the US 10-year Treasury note rose for a fifth consecutive session on Tuesday, hitting the closely watched 5% threshold for the first time since July 2007. The yield climbed as high as 5.04% before easing slightly to 5.01%. The rate milestone could ripple through the economy as the 10-year yield is a benchmark for consumers loans and corporate funding.
As of 11 September 2026, Brent crude is trading around $104.61 and WTI at roughly $100.05, driven by an effective closure of the Strait of Hormuz that has removed approximately 20 million barrels per day from global supply. The renewed rise in oil prices, which pushed crude back above $100 a barrel, continues to cloud the inflation outlook, particularly as tensions in the Middle East remain elevated and risks to oil supplies increase. US headline inflation held at 3.4% year-on-year in August, while core inflation was at 2.4%. Meanwhile, diesel prices have risen to $6 a gallon, adding further pressure to the inflation outlook as an end to the conflict appears increasingly distant.
The Dow Jones Industrial Average lost 328.09 points, or 0.63% to close at 52,093.11. The S&P 500 fell 0.45% to end at 7,585.73, while the Nasdaq Composite dropped 0.78% and settled at 25,981.57. Stocks fell on Tuesday as traders looked ahead to the Federal Reserve's policy decision this week and as Treasury yields surged to multiyear highs. Losses in the S&P 500 and Nasdaq were mitigated by gains in a number of stocks connected to artificial intelligence, which were under pressure in the prior trading day. Coherent added nearly 2%, while Advanced Micro Devices gained 2%. Qualcomm advanced more than 4%.
EQT X ("EQT") has entered into a definitive agreement to acquire a majority stake in McGill and Partners from Warburg Pincus for USD 2.0bn. Founder and Chief Executive Officer Steve McGill will continue to lead the firm, while Chairman John Lloyd will remain actively involved.
On September 17, 2026, the U.S. Small Business Administration will host a virtual public forum on its recently proposed revisions to small business size standards. Size standards determine eligibility for SBA programs and small-business federal contracting opportunities. The proposals could affect which firms qualify as small and are eligible to compete for small-business set-aside contracts. The rule would consolidate standards primarily at the four- and five-digit NAICS levels, reducing the total number of individual standards from nearly 1,000; shifting some industries from receipts-based to employee-based measures; and generally increasing standards so more firms qualify as small.
Congress passed a major tax reform bill in late 2025, and it has serious implications for how you'll manage earnings, payroll, and forecasting next year. The 20% Qualified Business Income (QBI) deduction is now permanent for pass-through entities. Business owners should also monitor beneficial ownership reporting requirements, which remain in effect with limited exemptions for non-foreign-owned firms.
A 25-basis-point Fed rate hike today will mark the end of the rate-hold period and signal the central bank's commitment to fighting inflation. For business owners, this translates immediately into higher costs for lines of credit, equipment financing, and any variable-rate debt. The larger concern is the 10-year Treasury yield reaching 5 percent for the first time since 2007, which sets the floor for all corporate and consumer borrowing costs. Refinancing decisions and expansion plans that depend on capital access should account for this environment. Small and mid-sized businesses that rely on floating-rate financing may see working capital pressures intensify in coming quarters.
Persistent energy costs tied to Middle East tensions remain the hidden driver of inflation and business operating margins. Oil prices above $100 per barrel raise input costs, shipping expenses, and transportation budgets for most sectors, particularly logistics, manufacturing, and distribution. The Strait of Hormuz closure shows no signs of resolution, meaning businesses should plan for energy prices to remain elevated through year-end. Meanwhile, the labor market stability and contained wage growth offer one silver lining: wage-driven inflation pressures are minimal, giving the Fed confidence that tightening policy may not derail employment growth. The key watch: whether the rate hike, combined with higher borrowing costs, begins to cool demand and hiring in the months ahead.