As September begins, investors face a market that is turning "elephanty," according to hosts Andrew Horowitz and John C. Dvorak in Episode 816 of DH Unplugged, titled "Strikes, Spikes, Hikes." The episode, published September 1, 2026, highlights renewed U.S. bombing of Iran, a sharp move higher in crude oil, rising bond yields, and a fresh wave of corporate winners and losers. The hosts frame September's classic volatility against a backdrop of eroding institutional trust and a Federal Reserve caught between political pressure and a wobbly labor market.
One of the most pressing concerns is the surge in crude oil, which has jumped roughly 13% in two weeks to about $91.80 per barrel. Diesel crack spreads are flashing inflation warnings, adding to the narrative that energy prices could feed into broader price pressures. This comes as the U.S. engages in renewed military action against Iran, with President Trump threatening that Iran will be "totally wiped out as a country" if it retaliates again. The geopolitical tensions underscore the fragility of supply chains and the potential for energy-driven inflation shocks.
On the corporate front, Dell provided a bright spot with blowout guidance, projecting fiscal 2027 EPS near $25.50 versus the prior $18.99, thanks to a 40% data center share. This suggests strong demand for AI infrastructure, but it contrasts with other retailers struggling to connect with consumers. Dick's Sporting Goods plunged roughly 30% as Foot Locker comps fell 3.6%, while Target faces a Halloween clown costume backlash, illustrating the landmines in brand management. These diverging fortunes highlight the uneven nature of the economic recovery.
The hosts also discuss Nvidia's reported $12.9 billion pursuit of Hugging Face and the fallout between Jensen Huang and Sam Altman, which could reshape the AI landscape. Meanwhile, the government's equity stakes in Intel, MP Materials, and Trilogy Metals, and a lawsuit challenging the Intel arrangement, raise questions about the state's role in private markets. Horowitz, who discloses a personal short position in Intel, questions why Washington gets discounted shares that retail investors never see. Dvorak contrasts this with China's state-owned enterprise model and flags GLM 5.3 Flash from Chinese lab Z.ai, reportedly trained without a single Nvidia chip, underscoring global competition in AI.
Horowitz's skepticism extends to Treasury Secretary Scott Bessent and Fed nominee Kevin Warsh. "The administration is the boy who cried wolf right now," he says, adding that "Bessent has really gotten a little bit crazed trying to manipulate the markets." Dvorak connects these concerns to bond yields and the dollar, arguing that currencies, equities, and even private valuations ultimately rest on trust. "It's a series of very large trust factors," he warns, pointing to tariff escalation echoing Smoot-Hawley as a sign that America no longer believes it can compete.
The episode also covers LEGO's 21% first-half revenue jump and the baseball-card casino economy drawing scrutiny from Japanese regulators. With Friday's August payrolls, ADP, JOLTS, and ISM data on the horizon, the hosts set the stage for a volatile month. As they open the final four months of the year, their unfiltered take reminds listeners that market moves are often driven by more than just fundamentals—they're driven by confidence, policy missteps, and unforeseen events.
