The U.S. dollar index climbed back above 100 on September 22 for the first time since early August, and bank stocks paid the bill: JPMorgan Chase fell 3.4 percent, financials dragged the Dow down 0.36 percent to 51,863.69, while the Nasdaq Composite added 0.45 percent to a second straight record close at 27,244.28.
The S&P 500 finished essentially unchanged at 7,764.64, about 0.4 percent below its recent high. Financials dropped about 1.7 percent as a group. EUR/USD traded near 1.145 to 1.147. The 10-year Treasury yield hovered around 4.94 to 4.95 percent even as oil logged a fifth session of losses. Volume was heavy.
The split is the story. AI-linked names kept the Nasdaq at records. Banks, which live on the yield curve and on dollar funding, did not. A firmer dollar and a still-tight curve are a poor mix for net-interest optimism after the Federal Reserve's first hike in three years.
When the dollar reclaims 100, it is not a patriotism trade. It is a tighter financial condition that the Nasdaq can ignore as long as AI demand is the bid, and that the Dow cannot. Who loses is the bank book — and any portfolio that treated a five-day oil slide as permission to buy cyclicals.
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