September began exactly the way market strategists feared it might. Tuesday, September 1, 2026 saw the Dow Jones Industrial Average drop 418.31 points (-0.79%) to 52,767, the S&P 500 fall 0.71% to 7,631, and the Nasdaq Composite decline 1.03% to 26,099 — the S&P’s lowest close since August 4 — as renewed U.S.-Iran hostilities in the Strait of Hormuz sent oil surging and pushed Treasury yields to levels not seen since early 2025. But the day’s single most dramatic story wasn’t macro at all: it was a small biotech that lost more than half its value in a matter of hours. Here are today’s top losing stocks and exactly why each one fell.

Today’s Market Snapshot

• Dow Jones: -418.31 (-0.79%) to 52,767
• S&P 500: -54.56 (-0.71%) to 7,631, its lowest close since August 4
• Nasdaq Composite: -271.12 (-1.03%) to 26,099
• Russell 2000: -36.32 (-1.23%) to 2,920
• The trigger: Two oil tankers — one Saudi-owned, one South Korean-owned — were struck by projectiles in the Strait of Hormuz Monday night as the U.S. and Iran resumed hostilities in a six-month conflict. The U.S. responded with new strikes on Iranian Revolutionary Guard targets Tuesday.
• Oil: Brent crude jumped as much as 4.6% to $94.65 a barrel, WTI crude rose 5.2% to $90.22 — its first close above $90 in more than a month.
• Treasury yields: The 10-year yield pushed toward 4.8%, and the 2-year yield hit its highest level since January 2025, as markets priced in rising odds of a Fed rate hike at the September 15-16 meeting.
• VIX: Closed below 15 on Monday for its lowest monthly close since November 2024, but spiked back toward 16 in Tuesday morning trading.

1. Alumis Inc. (ALMS) — Down 53.57% to $10.12 as a Pivotal Lupus Trial Fails

Alumis, a late-stage biopharmaceutical company with no commercial product, announced that its Phase 2b LUMUS trial of envudeucitinib — an oral TYK2 inhibitor described by the company as “potentially pivotal” — failed to meet its primary and secondary endpoints in the overall trial population of 408 patients with moderate-to-severe systemic lupus erythematosus. The trial’s primary endpoint, a disease-activity composite measure at week 48, simply wasn’t met broadly enough to support the drug’s lupus indication as originally designed.

There was a genuine silver lining buried in the data: a prespecified subgroup of patients with high interferon gene signature (IFNGS-high) — who represent the majority of moderate-to-severe SLE diagnoses — showed robust clinical responses on the primary endpoint and key secondary measures. The problem is that this subgroup was unexpectedly underrepresented in the actual trial population, dragging down the overall result even as the drug appeared to work in the patients it was designed to help most.

Bull Case vs. Bear Case

Bull case: Alumis remains on track to file a New Drug Application for envudeucitinib in moderate-to-severe plaque psoriasis in Q4 2026, backed by positive Phase 3 ONWARD program data — a separate, already-successful indication that gives the company a real near-term commercial pathway independent of today’s lupus setback. Management also plans to engage regulators about a potential Phase 3 trial focused specifically on the IFNGS-high lupus population, where the drug showed genuine efficacy.

Bear case: Today’s decline (roughly 3.3 times the company’s most recent cash and short-term investments of $502.3 million) reflects how binary clinical-trial risk works — a single failed endpoint erased more value than the company holds in cash. Any future IFNGS-high-focused lupus trial would need regulators to accept a narrower, biomarker-selected population, which is far from guaranteed, and continued R&D spending raises real dilution risk.

Forecast

What to watch tomorrow: Whether shares stabilize near today’s $10.12 close or continue drifting toward the intraday low around $8.89 — a close below $9.59 (today’s low) on continued volume would suggest the market isn’t done repricing the stock, while stabilization above $10 would signal investors are content pricing in the psoriasis opportunity alone.

2. Axon Enterprise, Inc. (AXON) — Down Roughly 8% to Around $522

The enterprise, the maker of Taser devices and law-enforcement technology, was among the S&P 500’s weakest performers today. Dropping nearly 8% to hover near $522 as surging Treasury yields hit high-valuation growth stocks particularly hard. The move extends a rougher stretch for the stock following its August earnings report. Where investors focused on operating margin compression. Software and services gross margin slipped from 78.9% to 75.1% — even as the company beat on revenue and raised full-year guidance.

Bull Case vs. Bear Case

Bull case: Axon’s core business fundamentals remain strong, with revenue still growing at a 30%+ clip and full-year guidance recently raised, not cut. Today’s move is a valuation-multiple story driven by macro rates, not a deterioration in the underlying business.

Bear case: At roughly 250 times earnings, Axon trades at a massive premium to its industry, making the stock exceptionally sensitive to any rise in the risk-free rate (Treasury yields) — exactly the dynamic playing out today, and a trend that could persist if the Fed does hike in September.

Forecast

With the stock now well below its 52-week high of $885, watch whether Treasury yields stabilize — Axon’s price action is likely to keep tracking bond-market moves more closely than company-specific news until rate uncertainty resolves one way or the other at the September FOMC meeting.

3. Lumentum Holdings Inc. (LITE) — Down More Than 5% in an AI Infrastructure Selloff

Lumentum led a broader decline across AI infrastructure and photonics names Tuesday, as the iShares A.I. Innovation and Tech Active ETF (BAI) fell more than 1% and investors rotated out of richly-valued AI-adjacent hardware plays amid the day’s broader risk-off tone.

Bull Case vs. Bear Case

Bull case: The AI data-center optical-connectivity buildout remains a multi-year structural growth story, and today’s decline reflects macro positioning (rate fears) rather than any change to underlying demand for Lumentum’s components.

Bear case: Photonics and optical-networking names have been among the most richly valued corners of the AI trade in 2026, making them acutely vulnerable to exactly the kind of rate-driven multiple compression seen today.

Forecast

Watch whether Lumentum and sector peers stabilize once Friday’s August jobs report — the last major data point before the September 15-16 FOMC meeting — clarifies the Fed’s likely path.

4. Teradyne, Inc. (TER) — Down 5% Alongside Semiconductor Test Equipment Peers

Teradyne fell in step with the broader chip-equipment selloff today, part of the same AI-infrastructure and semiconductor complex weakness dragging down Lumentum and Coherent. Rising bond yields disproportionately hit capital-intensive, cyclical semiconductor equipment names, which tend to carry higher valuation multiples tied to AI-driven capital-spending forecasts.

Bull Case vs. Bear Case

Bull case: Semiconductor test equipment demand remains tied to the broader AI chip buildout, a theme that hasn’t structurally changed — today’s move is a rates story, not a demand story.

Bear case: With chip stocks already showing signs of fatigue after a strong summer, further Fed hawkishness could extend the pullback well beyond a single session.

Forecast

Semiconductor equipment names like Teradyne tend to be high-beta on both the way up and the way down — expect continued volatility tracking the broader chip complex until macro conditions stabilize.

5. Builders FirstSource, Inc. (BLDR) — Down 4% on Weak Construction Data

Builders FirstSource led housing-related names lower after the Commerce Department reported that construction spending fell 0.5% in July to its lowest level since October 2023. The iShares U.S. Home Construction ETF (ITB) lost almost 2% on the news, marking its fourth negative session in five, while peer LGI Homes fell 3% and Home Depot declined roughly 2%.

Bull Case vs. Bear Case

Bull case: Housing-sector weakness has been a known, well-telegraphed story for months — a single soft construction-spending print doesn’t necessarily signal further deterioration, and any eventual rate relief would be a strong tailwind for building-materials names specifically.

Bear case: Mortgage rates jumped to their highest level in more than a year Monday after renewed Middle East hostilities pushed bond yields higher — a double headwind of weak current demand and rising financing costs that could persist well into the fall.

Forecast

Watch mortgage-rate trends closely; a continued climb toward 7% would likely keep pressure on builders and suppliers alike, while any stabilization or pullback in rates could offer near-term relief for this beaten-down group.

6. Blackstone Inc. (BX) — Down 4% as Rate-Sensitive Asset Managers Slide

Blackstone fell alongside fellow alternative-asset manager KKR as rising Treasury yields pressured the entire private-equity and asset-management complex. Higher rates generally weigh on these firms’ valuations both directly (higher discount rates on future cash flows) and indirectly (more expensive financing for the leveraged deals that drive their fee income).

Bull Case vs. Bear Case

Bull case: Blackstone’s diversified fee-generating asset base provides some insulation from short-term rate volatility, and the firm has continued executing large transactions even in a higher-rate environment.

Bear case: A sustained higher-for-longer rate regime would directly pressure deal volume and asset valuations across Blackstone’s real estate and private-equity portfolios, a genuine structural headwind rather than a one-day blip.

Forecast

Watch upcoming deal announcements and fundraising updates as the clearest signal of whether higher rates are meaningfully slowing Blackstone’s core business, versus simply compressing its stock multiple.

7. KKR & Co. Inc. — Down 4% in Sympathy With the Broader Asset-Manager Selloff

KKR declined in lockstep with Blackstone today, hit by the same rising-yield dynamic pressuring the alternative-asset-management sector broadly. Notably, the decline came just a day after KKR agreed to sell USI Insurance Services to Aon for $17 billion in cash — a reminder that even amid today’s macro-driven selloff, KKR’s underlying deal-making machine continues operating actively.

Bull Case vs. Bear Case

Bull case: The $17 billion USI sale to Aon, announced just before today’s session, demonstrates KKR can still execute major, value-accretive transactions even in a higher-rate environment — a sign of underlying portfolio strength.

Bear case: Like Blackstone, KKR’s stock remains structurally exposed to sustained higher rates, which raise financing costs across its leveraged buyout portfolio and could slow future deal flow if the trend persists.

Forecast

The USI transaction proceeds will be worth watching for capital-deployment signals — how KKR redeploys that cash could offer clues about the firm’s read on current market valuations.

8. Coherent Corp. (COHR) — Down 2% as the Optical Networking Complex Continues to Slide

Coherent extended its recent weakness today, falling alongside Lumentum and other AI-infrastructure optical component makers as the broader risk-off tone hit richly-valued tech hardware names particularly hard.

Bull Case vs. Bear Case

Bull case: AI datacenter buildout demand for Coherent’s transceivers and photonic components remains a durable multi-year theme, and today’s modest 2% decline is far less severe than peers like Lumentum, suggesting relative resilience.

Bear case: Coherent has already shown vulnerability to sentiment-driven selloffs in recent weeks, and continued bond-market turbulence could keep pressuring the entire optical-networking group regardless of individual company fundamentals.

Forecast

Coherent’s upcoming earnings report will be the next major fundamental catalyst — until then, expect the stock to trade largely in sympathy with broader AI-infrastructure sentiment and rate expectations.

9. PG&E Corporation (PCG) — Downgraded by Bank of America on California Wildfire Legislation

Bank of America downgraded PG&E Tuesday after the California legislature advanced a wildfire-protection bill that fell short of what utilities like PG&E and Edison International had been hoping for. The stock had already tumbled Monday on the initial legislative news, and today’s formal analyst downgrade compounded the pressure.

Bull Case vs. Bear Case

Bull case: California utilities have navigated wildfire-liability legislative cycles before, and any near-term legislative disappointment doesn’t necessarily preclude a more favorable framework emerging later in the process.

Bear case: Reduced wildfire liability protection directly increases PG&E’s exposure to catastrophic-event costs, a risk that’s proven financially devastating for California utilities in past wildfire seasons.

Forecast

Watch for any amendments or follow-up legislative action — utilities’ stock reactions to wildfire bills have historically been volatile and sensitive to late-stage changes in liability-cap provisions.

10. Edison International (EIX) — Also Downgraded by Bank of America on the Same Wildfire Bill

Edison International, the parent of Southern California Edison, was downgraded alongside PG&E in the same Bank of America note, reflecting the same core concern: the advancing California wildfire-protection bill offers less liability protection for electricity providers than the sector had hoped for.

Bull Case vs. Bear Case

Bull case: Edison International’s diversified regulated-utility operations provide some cushion, and the legislative process isn’t necessarily final — further negotiation could still improve terms for utilities before any bill is signed into law.

Bear case: Like PG&E, Edison faces genuine, quantifiable increased exposure to wildfire-liability costs if the current version of the bill becomes law, a risk that directly threatens the stock’s valuation and dividend sustainability in a worst-case scenario.

Forecast

Both California utility names are likely to remain headline-sensitive to any further developments in Sacramento — traders should watch legislative news flow closely rather than treating today’s downgrade as the final word.

The Day’s Dominant Theme: Rates, Not Fundamentals, Drove Most of Today’s Losses

With the exception of Alumis’s company-specific clinical catastrophe, nearly every other name on today’s losers list — Axon, Lumentum, Teradyne, Builders FirstSource, Blackstone, KKR, and Coherent — fell primarily because of surging Treasury yields and renewed geopolitical risk from the Iran conflict, not because of any deterioration in their individual businesses. PG&E and Edison International represent a third, distinct category: state-specific regulatory and legislative risk unrelated to the broader macro selloff. That split is worth remembering heading into Friday’s jobs report and the September 15-16 Fed meeting — most of today’s pain was a rates story, and it could reverse just as quickly as it arrived if that story changes.

Sector Sentiment Snapshot

Technology and AI infrastructure names were the session’s clear underperformers as rising yields compressed valuations across the board, while investors rotated into energy, healthcare, and consumer staples — sectors that benefited from the day’s oil-price surge and defensive positioning. Housing and rate-sensitive financials also lagged, reinforcing that today’s selloff was fundamentally a bond-market story wearing an equity-market costume.

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Disclaimer: This publication is entirely for informational and journalistic purposes and does not constitute formal financial, investment, or legal advice. All market investments carry inherent risks of capital loss. Always complete independent due diligence prior to executing equity trades.

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Kasia Davis

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