The NAHB homebuilder index fell to 29 in October, three points below September and two below consensus. That is the lowest since June 2012, with 43% of builders reporting price cuts.
Outside the 2007-2012 housing crisis, the index has rarely printed below 30. September housing starts arrive at 8:30 this morning, and the builders already signaled what to expect.
The S&P 500 gained 0.41% to 7,690.73 but most of its 503 members closed lower. The equal-weight S&P 500 fell 0.32%.
Only technology, consumer discretionary, and materials finished positive among eleven sectors. NYSE decliners topped advancers 1,761 to 945, and the Dow slipped 0.07% to 51,966.03.
The Nasdaq climbed 1.11% to 26,430.89 as the Philadelphia Semiconductor Index ended its eight-session losing streak with a 1.61% gain. Netflix reports after Tuesday's close, the first major earnings test for this narrow rebound.
The 10-year yield rose about 5 basis points to 5.14%, reversing the safe-haven bid that eased yields late last week. The 30-year climbed to 5.48%.
The backup drove the day's sector damage. Utilities fell 2.01%, real estate dropped 1.16%, and financials lost 0.83%.
With the 30-year fixed mortgage rate at 7.40%, the yield rise connects directly to the NAHB's collapse. Today's housing starts will show whether builders have begun to slow construction in response.
November WTI, expiring Tuesday, settled at $103.66, up 2.22% and its highest close since September 15. The more-traded December contract settled at $98.54.
Houthi claims of strikes on Saudi Aramco sites and Hormuz tanker flows near 8.5 million barrels a day, kept supply fears alive. Crude above $100 reinforces the inflation pressure behind Monday's yield rise.
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Oil also feeds the NAHB's other complaint: rising energy and material costs. December WTI near $99 shows the cost pressure persists beyond the expiring front month.
December gold fell 0.50% to about $4,160, losing ground for the second time in four sessions as higher yields erode its appeal. The dollar index edged up 0.15% to 101.99.
The VIX dropped 7.75% to 18.44, retreating from Friday's four-month high above 22. The Fed's pre-FOMC blackout through October 29 means no officials can recalibrate rate expectations before the decision.
September housing starts at 8:30 a.m. ET carry added weight after the NAHB's worst reading in 14 years. Consensus is 1.31 million annualized, up from August's 1.275 million.
A miss would confirm that 7.40% mortgage rates are stalling new construction. GE Aerospace, 3M, GM, and Halliburton report before the open.
November WTI futures expire today, which can amplify price swings in crude near settlement. Netflix reports after the close, with Tesla, Meta, and IBM due later in the week.
