Domestic downturns and volatile energy markets dominated U.S. headlines from Sept. 7 through the 11.

During the week, inflation jumped to 3.4%, driven by rising energy costs and supply chain bottlenecks, CPI rose a seasonally adjusted 0.4% in August, bringing the 12-month inflation rate to 3.4%. Core CPI, inflation excluding food and energy, rose above expectations at 0.3% for the month.

The Treasury Department’s plan to repurchase $6 billion in long-term debt failed, sending the 10-year Treasury yield to its highest level in three years. The plan, meant to ease long-term liquidity and borrowing, was challenged heavily by external geopolitical events. Bond traders increasingly worry that these supply shocks and massive deficits overwhelm the Treasury’s liquidity interventions.

Apple’s (NASDAQ: AAPL) annual product event introduced the iPhone Duo. The release aims to revitalize stagnant consumer demand and position Apple at the forefront of artificial intelligence enabled mobile devices. Apple’s stock was flat on the day of the announcement before rallying 3.56% on the NASDAQ the following day.

Mortgage rates pushed existing home sales to a 14-month low. Existing-home sales fell 2% from July, reaching their lowest level since June 2025. Mortgage rates increased and added pressure, as the average rate of a 30-year fixed mortgage rose above 7% for the first time since May. The rise of 10-year Treasury note yields, which most mortgages are pegged to, also contributed to the slowing housing market.

Increased energy market volatility occurred after the Iran-backed Houthi rebels seized Perim Island in the critical Bab el-Mandeb Strait. These disruptions coupled with the more restricted tanker traffic, precautionary pipeline shutdowns in Saudi Arabia and regional drone strikes disrupted global crude supply further. These disruptions drove global crude prices above $100 per barrel.

With trade conflicts, rising costs and other upward pricing pressures, recent developments raise new concerns for investors. While year-on-year inflation remained the same in July, it still remains above price targets. As global shipping slowed, tightened domestic supplies are impacting a broader range of sectors.

Now, broader core inflation suggests underlying cost pressures from rising energy costs are embedding across multiple sectors, with core inflation rising by 0.3%.

Although previously resilient, recent cracks in the U.S. economy have spilled over into the financial markets, impacting bonds. Treasury buybacks, which were meant to provide liquidity to a cooling market, are now overpowered by inflation.

While equities remain resilient, the bond market now sees multi-year high yields across all tenors. With the Fed rate hike necessary, it could also be a consequential slowdown, further worsening a weak bond market.