Squared T Capital · Grow Your Pile
Crude fell four and a half percent today on talk of a US-Iran deal. That is normally the kind of move that buys a central bank some room. Five days after the Fed’s first hike since 2023, Alberto Musalem spent the afternoon explaining why it does not.
The market ignored all of it and bought technology. The S&P closed up 1.6%, the Nasdaq 100 up 2.8%. Seven of eleven sectors did essentially nothing.
Not advice — full disclaimer below.
The Tape
Look at the last row twice. The S&P gained 1.6% and the VIX gained 1.6% with it. Volatility is supposed to fall on days like this. When it does not, somebody is paying up for protection into strength rather than selling it.
Two sectors did the work. Communications and Technology are about 44% of the index between them, and at +3.8% and +2.6% they account for nearly all of the S&P’s 1.6%. Seven of eleven sectors finished under half a percent or negative. This was a narrow day dressed up as a broad one.
Oil Broke, And It Was Political
US crude settled at $95.78, down $4.52 on the day — 4.51%. Brent settled at $100.34, down $3.53. Energy was the worst sector on the board at -2.4%.
The catalyst was diplomatic, not economic. Qatar said it is working to facilitate a US-Iran agreement, including a possible short-term deal. Separately the administration floated a $5 billion fund to rebuild Gulf energy infrastructure. Barrels that markets had priced as unavailable started looking available again.
Natural gas went with it, down 2.8% to $2.83.
And The Fed Is Still Talking About More
We wrote on Wednesday that the Fed had raised rates for the first time since 2023 and that Wall Street was rebuilding its forecasts around it rather than fading it. Today gave that a second leg. Alberto Musalem, on the afternoon crude broke:
Without further policy restraint, inflation is more likely than not to remain substantially above the 2% target 18 months from now.
Further hikes are likely needed to tame inflation that is both demand- and supply-driven.
The commodity shock is about more than oil — it includes base metals like copper.
Stripping out supply factors, inflation remains “too high,” and business contacts are planning price increases “closer to 3%.”
That last pair of points is why a cheaper barrel does not automatically fix his problem. If the pressure sits in copper and in what companies plan to charge, oil falling four percent in an afternoon does not reach it.
He is not freelancing, and this is the part we already showed you. Last Wednesday’s hawkish meeting pushed Goldman Sachs, Morgan Stanley, NatWest, Rabobank, Swedbank and Commerzbank to either add another hike or take cuts out of their forecasts. JP Morgan flipped the Bank of England from two cuts in 2027 to a hike. The street is not fading this Fed, it is rebuilding around it, and Musalem is what that sounds like from the inside.
The bond market sits where that argument would put it — the US 10-year at 4.968%, the 5-year at 4.840%.
Britain is paying more than the United States to borrow for ten years. China is paying 1.676%.
Trusted Voices
Keith McCullough, Hedgeye — posted this afternoon
He is deliberately light. One short position on the board, timestamped, and he said plainly he had not added to it: “I went to 1 Short for a reason.” His read on the tape is that the crowd is about to be forced in — “it’s getting pretty easy to see when the crowd is going to be forced to chase, just let them.”
Where he is short, he is not short the index. He was cutting Qatar at its recent lows and made the point explicitly: differentiated shorts instead of SPY. He is also long corn, which is having a day.
One voice, printed because there was a dated read in front of us this afternoon. The rest of the panel is left out rather than restated from an older frame.
The Number That Settles It Is Friday
August core PCE lands Friday, and it is the only tier-one print of the week — the one that either validates another hike or takes it off the table. Thursday brings the President hosting Xi in Washington with tariffs and chip restrictions on the agenda, which is the other thing capable of moving this tape.
Worth holding next to today’s close: the CNN Fear and Greed index reads 29, in Fear, on a day the S&P gained 1.6%. Rising volatility, a fearful survey and a narrow melt-up is an unusual combination to see together.
Elsewhere
Bitcoin ran 6.1% to 85,988, an eight-month high. South Korea led the world at +4.3%, emerging markets generally +2.6% against developed +1.2%. Gold slipped 0.8% to 4,343, and natural gas fell 2.8% to $2.83.
Treasury Secretary Scott Bessent said AI companies should be responsible for harms caused by their products and rejected calls for a federal liability shield: “It is humans who are responsible, not the AI.” Worth filing on a day when the two sectors that carried the index were Communications and Technology.
What We Did About It
We took profits into the strength. Two short puts came off in Portfolio 1 this morning, both sold on the same August afternoon, both bought back with 25 days still on them. Full detail is in the separate trade alert.
The honest summary of the day: a narrow rally, a Fed speaker arguing for more restraint, a four-percent break in crude that was political rather than economic, and a volatility index that went up anyway. That is not a tape to be adding short-put risk into at these levels. It is a tape to be taking it off, which is what we did.
Disclaimer
This is not investment advice. Nothing in this letter is a recommendation to buy or sell any security. Grow Your Pile and Squared T Capital publish what we do in our own accounts for education. Options involve substantial risk and are not suitable for every investor. A short put can require you to buy stock at the strike price and can lose more than the premium collected. Past results do not predict future results. Do your own work and consider speaking with a licensed advisor about your circumstances.
Market levels, sector moves, sovereign yields, currencies and commodity prices in this letter are closing or late-session figures for September 21, 2026 as they appeared on our own screens, and are gross of any subsequent revision. Quoted comments from Federal Reserve and Treasury officials and from named commentators are reproduced from wire and public feeds on the same afternoon; we quote them as published and do not paraphrase into views they did not express. Commentary attributed to Keith McCullough is his own and is not our recommendation.
Past performance is not indicative of future results, and results shown are those of our own accounts and are not representative of any subscriber’s results. Read the Characteristics and Risks of Standardized Options before trading.
Tony Rihan and Tony Battista Grow Your Pile · Squared T Capital
Every options trade in all three portfolios is published, win or lose, with entry, exit and running P&L at growyourpile.com.
