Oil Spikes, Bond Jitters and a Target Halloween Backlash Rattle September Markets

As September begins, markets are bracing for a volatile month, with crude oil surging, bond yields climbing, and a retail backlash against Target's Halloween costume adding to the turbulence. In the latest episode of DH Unplugged, hosts Andrew Horowitz and John C. Dvorak delve into these developments, framing them against a backdrop of eroding institutional trust and a Federal Reserve caught between political pressure and a wobbly labor market.

The episode, titled "Strikes, Spikes, Hikes," highlights a sharp move higher in crude oil, which has risen roughly 13% in two weeks to about $91.80 per barrel. The hosts note that diesel crack spreads are flashing inflation warnings, signaling potential pass-through costs for consumers. This spike comes amid renewed U.S. bombing of Iran, with President Trump warning that Iran will be "totally wiped out as a country" if it retaliates again, according to Fox News. The geopolitical tensions are adding a risk premium to energy prices, complicating the Federal Reserve's inflation fight.

Bond yields are also on the rise, adding to market jitters. Horowitz criticizes Treasury Secretary Scott Bessent and Fed nominee Kevin Warsh, saying, "The administration is the boy who cried wolf right now," and adding that "Bessent has really gotten a little bit crazed trying to manipulate the markets." Dvorak connects these moves to a broader erosion of trust, arguing that currencies, equities, and even private valuations rest on one thing: trust. "It's a series of very large trust factors," he says, warning that tariff escalation echoing Smoot-Hawley would signal that America no longer believes it can compete.

Corporate earnings provide a mixed picture. Dell issued blowout guidance, projecting fiscal 2027 EPS near $25.50 versus $18.99 prior, on the back of 40% data center share. Meanwhile, Nvidia is reportedly pursuing a $12.9 billion acquisition of Hugging Face, though the hosts note a fallout between Jensen Huang and Sam Altman. On the retail front, Dick's Sporting Goods plunged roughly 30% as Foot Locker comps fell 3.6%, and Target faces a Halloween clown costume backlash, underscoring brand-management landmines in today's social media age.

The episode also touches on government equity stakes in Intel, MP Materials, and Trilogy Metals, with a lawsuit challenging the Intel arrangement. Horowitz, who discloses a personal short position in Intel, questions why Washington gets discounted shares that retail investors never see. Dvorak contrasts the U.S. approach with China's state-owned enterprise model and highlights GLM 5.3 Flash from Chinese lab Z.ai, reportedly trained without a single Nvidia chip.

Looking ahead, Friday's August payrolls, ADP, JOLTS, and ISM data will provide further clues on the labor market's health. The hosts frame September's classic volatility as a test of investor confidence in both policy and corporate leadership.