Rising Bond Yields and the Diesel Shock: Market Commentary for Retirees

Rising bond yields, $6 diesel, a jobs report that came in better than feared, and a Nike dividend promise that may have backed the company into a corner. That is the ground covered this week on The Financial Hour of The Tom Dupree Show, where host Tom Dupree and analysts James Dupree and Michael Dawahare explain what is really moving the stock market in early October 2026, and what it means for retirees and anyone over 50 who counts on a portfolio for income.

The 30-year Treasury yield climbed to 5.63% and the 10-year reached 5.30%, levels Tom called unprecedented in recent years. Diesel is above $6 a gallon. Yet the NASDAQ was trading at an all-time high the morning the show was recorded. Here’s how all of that can be true at once.

“That’s a seismic shift in the bond market, and stocks have been trying to digest that.”Tom Dupree

Why the 10-Year Treasury Yield Matters to Your Retirement Income

Tom opened with the bond market, where he started his career in 1978. When long-term Treasury yields move this much, it touches mortgage rates, the bonds already in your account, and what investors will pay for stocks. You can follow the official numbers yourself on the U.S. Treasury’s daily Treasury yield curve rates page.

In plain English, a bond’s yield is the income it pays you as a percentage of its price. When yields rise, the prices of bonds you already own tend to fall, because new bonds pay more. For a retiree, that cuts both ways: existing bonds may show a lower value, while new money can earn more income than it could a few years ago. That is why we look at what a bond pays, and for how long. Investor.gov has a solid primer on how bonds and fixed income products work. Bond prices move with interest rates, and all investing involves risk, including the possible loss of principal.

Then Tom connected the dots to the other big story of the week: “The bond market and the oil markets are inextricably tied together.”

Why Diesel Prices Are Staying High Even With Oil Flowing

Here is the part of the energy story most people miss. Tom pointed out that something like 85% of oil is now getting through the Strait of Hormuz, one of the world’s most important oil chokepoints according to the U.S. Energy Information Administration. But shipping rates have gone up roughly fivefold.

“Therefore, the oil price doesn’t matter so much as the fact of what it costs to get it shipped to the refineries. That’s keeping the price high. That is why diesel is so high.”Tom Dupree

Tom compared a refinery to a whiskey distillery. Crude is heated in a cracking tower, and products called distillates separate out at different levels. Diesel comes off lower than gasoline but commands a much higher price, making it the most profitable thing refineries produce. The reason is simple: everybody in shipping has to use it. The EIA explains the basics of how refineries turn crude oil into fuels if you want to go deeper.

Tom said years ago that major engines ought to run on natural gas. Some do, but adoption has never been widespread enough to make a difference. His conclusion was blunt: “I think you’re gonna be looking at $6 and change diesel for quite a while unless something really changes.” He called it a problem for the economy, a problem for the consumer, and a political problem for the party in power heading into the midterms, while making clear he wasn’t blaming President Trump. In Tom’s view, it’s a side effect of the war with Iran. You can track weekly prices on the EIA’s U.S. on-highway diesel fuel prices page.

Michael added what had changed in just the past few hours. European countries had agreed that morning to release their diesel reserves, which could help in the short term. Michael noted that this came only after Great Britain released five individuals the Prime Minister confirmed were linked to Iran, under surveillance, while European governments had until that morning refused to release their diesel. Russia signaled overnight that it might start exporting diesel, assuming Ukraine stops striking diesel refineries, which Michael said resumed about a month ago as the U.S. midterms heated up. On supply, Michael said barrels coming out of the Gulf now exceed earlier levels, storage may become the next issue, and futures for later months show West Texas Intermediate crude between $70 and $80. Oil itself, in his words, is no longer the issue. Shipping is, because it all runs on diesel.

Michael also pointed out what he sees as a contradiction in globalist policy: closing factories in Western Europe and the United States, moving production to Asia, and shipping those goods back on diesel-powered vessels, while at the same time calling fossil fuel use an existential threat. As he put it, that approach requires roughly twice the fossil fuel use it claims to oppose.

The 50-Year “Terror Premium” on Oil and the Strait of Hormuz

To critics who say the Strait of Hormuz was always open, Michael agreed, with a catch. For 50 years, the world paid a $30 to $50 a barrel premium that, in his telling, flowed to the ayatollahs and clerics. He compared it to an office renter in certain parts of Manhattan who says, sure, my office worked fine. I just paid an extra $2,000 a month to a certain group of people for protection.

“So yes, the straits were open, but there was a geopolitical terror premium for the last 50 years. We’re close to that getting unwound.”Michael Dawahare

Will it cost the administration the midterms? Michael’s honest answer: he doesn’t know.

The August Jobs Report Revision Came in Better Than Feared

James raised the jobs report that came out the morning of the show, and Michael explained why the headline number on the first Friday of each month matters less than the revisions. The Bureau of Labor Statistics Employment Situation report is revised as more data comes in, and those revisions are often significant.

August originally printed in the 160,000 range, and many said the revision would take it to zero. Instead, it was revised down only 30,000. “So actual jobs created in August was 133,000 private jobs. That’s a nice, good number,” Michael said. Markets hitting all-time highs in the broader indexes, he argued, do not suggest an economy in free fall. “What it suggests is we have an energy shock,” which is a very real issue in the short term, but a different problem from a collapsing economy.

AI, “Knowledge Centers” and a Market Climbing a Wall of Worry

“Climbing a wall of worry” is an old Wall Street phrase for a market that keeps rising even when the news is full of reasons to be nervous. That is exactly what James sees happening. With the NASDAQ at an all-time high against high bond yields, high diesel and war in the Middle East, James said the market believes that “this AI build-out is insanely significant.” His point is that if technology stocks can climb against this kind of backdrop, things could look very different if the backdrop improves.

Michael added that AI is increasingly being called SI, for superintelligence, and data centers are rebranding as knowledge centers. No one can promise how this plays out, but the market weighs many things at once, not just the scariest headline of the day.

History, Elections and Taking the Long View With Your Money

Tom brought the conversation back to the hardest thing in investing, and in life:

“You know, the hard thing in anything is to see the long way forward instead of the short way forward.”Tom Dupree

Tom said people often fall into groupthink when they’re upset and decide against their own interests. He believes this country is a spiritual force more than an economic, military or cultural one, and he called the upcoming midterm election in some ways more important than the next presidential election. Even as he does battle as a businessman on the level of the economy, Tom said, he’s trying to look beyond the things he can see.

Michael answered that Tom had just described the American Revolution, when some of the wealthiest people in the colonies put everything on the line. Then he reached back to the Barbary pirates. In 1786, Thomas Jefferson and John Adams protested to Tripoli’s envoy about the seizure of American ships and sailors, and were told the attacks would continue. Adams favored paying the ransom; Jefferson wanted it stopped. As president, Jefferson sent naval forces and Marines to North Africa, the origin of “the shores of Tripoli” in the Marines’ Hymn. The U.S. State Department’s Office of the Historian has a good overview of the Barbary Wars.

Michael’s takeaway: “So much of what’s going on in the Mideast today, none of this is new.” James closed the segment by saying he just enjoys learning from the older guys on this kind of history, and Elizabeth wrapped it up with a line worth remembering: the crazy thing about history is that it tends to repeat itself, and it is a good guide for what might be to come. If you want more of this kind of perspective, the full market commentary archive has every past episode.

Nike’s Dividend Promise: A Case Study in Dividend Safety

The second hour opened with a little music theory. Michael picked Joe Nichols’ “Cool to Be a Fool,” an education in song construction. Most country, blues and rock songs live on a one, four, five progression. This one packs in nearly every interval in a major scale, even a rare Neapolitan chord, and it still works.

Then the conversation turned to a company the show has been following for six months. Nike reported earnings the night before, and the stock hit a 15-year low after a conference call Michael called one of the worst he has ever heard.

When One Product Line Is 20% of Sales: The Air Jordan Problem

“Air Jordan is 20% of their total sales globally. And if you’re under the age of 40, you don’t have any emotional connection to Michael Jordan.”Michael Dawahare

Michael added that if you’re under 30, you might not have even heard of him. Elizabeth made the point that Nike never attached itself to another iconic athlete with Jordan’s all-around appeal. To Nike’s credit, Michael noted, the company signed LeBron James and other stars it hoped would become the next Jordan, and it tried with Tiger Woods. But Jordan was a generational talent. As Michael put it, “Michael Jordan was Nike’s iPhone.”

Tom saw a deeper problem in the company’s culture. In his view, when a company starts putting political statements and posturing ahead of its business, “the profit motive is no longer the important thing,” and it eats itself from the inside out. Michael pointed to a research note that morning questioning, in hindsight, Nike’s decision to sign Colin Kaepernick to a contract worth tens of millions of dollars after he knelt during the national anthem, and he called that decision the beginning of the brand’s cultural decay. The motto was “Just Do It,” he said, and Nike turned into a protest company while its key brands were aging out.

Elizabeth noted that the Tiger Woods situation was simply bad luck. Michael’s response: boards and executives are paid tens of millions in stock options precisely to manage the black swan, because it is going to hit. Their job is to know what to do when a star has a scandal, or when Michael Jordan turns 60 and a generation doesn’t know who he is.

“Our Dividend Is Sacred”: Why a Dividend Promise Can Become a Trap

This is the part of the episode every income investor should hear. On the call, Nike’s management said, in effect, that there are years of work ahead, but the dividend is sacred, it will never be cut, and the goal is to raise it. Michael asked Tom why that might be music to the ears of short sellers who have bet against the stock. Tom understood immediately.

“I would never, as a CEO or upper management in a company that is shifting sand, make any kind of declaration regarding future dividends. Because now what you’re doing is you’re sort of turning it into a bond.”Tom Dupree

Tom’s point is that management is telling investors they can depend on this income and that it will grow, without knowing what profits or cash flow will look like a year or two from now. A dividend has to be paid out of free cash flow, the money left over after interest, taxes, expenses, depreciation and salaries. If the cash isn’t there, a promise doesn’t create it. Tom noted that the companies known as dividend aristocrats, which have raised their dividends for many years in a row, don’t come out and announce they will definitely pay the dividend. They protect their place in that club by running the business well. The SEC’s Investor.gov defines a dividend simply as a portion of a company’s profit paid to shareholders, which is exactly why profits come first.

This is the heart of how we think about income at Dupree Financial Group. A dividend is only as dependable as the cash flow behind it. Cash flow analysis is the foundation of everything we buy, and no dividend is ever certain. Any company can reduce or eliminate one. You can read more about that approach on our investment philosophy page.

Short Sellers, Hedge Funds and the Valuation Math on Nike

A short sale is when an investor sells stock they don’t own, hoping to buy it back later at a lower price. One catch: if you’re short a stock, you also owe its dividend. James pointed out that a quick short-term trader may not hold long enough for that to matter. Michael explained that many hedge funds must hold short positions at all times; cover one and they have to replace it. So as long as the fundamentals and the chart say they’re right, why would they cover? The holy grail for a hedge fund, he said, is getting a fundamental thesis right and riding a stock like Nike from 100 down to 30. The show has been negative on Nike for a long time.

Could Nike fall into the single digits? Michael walked through the math. Nike’s new guidance is $1.15 to $1.35 per share, a $1.25 midpoint. Lululemon and LVMH, which he called a much better company, each trade at about 10 times earnings. Apply that multiple and you get about $12.50, or roughly $15 allowing for a 4% yield management calls safe. Short covering would likely support the stock, he said, but single digits are possible. That’s an illustration of how analysts use earnings multiples, not a price target or a recommendation to buy or sell any security.

Respect the Chart: Moving Averages and What They Tell You

Elizabeth called Nike a textbook brand study. Michael added that the chart was screaming this for years. A 200-day moving average is the average closing price over the last 200 trading days, smoothing out daily noise to show the trend.

“When it’s below the 200-day moving average, we’ve talked about this, and it stays below, respect the chart.”Michael Dawahare

When the weekly and monthly bars keep moving from upper left to lower right and the stock can’t lift, Michael said, you respect that.

Reading Buyers and Sellers: James on Pivot Points, Candlesticks and Volume

Michael then turned to James, whose group of technology stocks has been telling the opposite story. James explained that some of those names got hit hard in July, a few down as much as 60%. After a move like that, a stock usually can’t bounce straight back. It has to consolidate, trading in a range, until it breaks out of its downtrend.

“And when that pivot point happens, all these buyers pile in.”James Dupree

Identifying that pivot point is the skill. Michael added that over three to six months, the charts in the AI group James studies suggest the market, the combined wisdom of the world, is saying this is real.

Tom shared a lesson from early in his career. He asked Frank Coleman on the bond desk at J.J. Kenny how the market was doing. Drifting, Coleman said. Up? The answer stuck with Tom for decades: “Bonds don’t drift up. Drifting means lack of conviction.” It takes real force to move a market higher.

James explained how the team reads that force. “It’s all about buyers versus sellers,” he said. When a stock closes at its high of the day, there had to be people buying all day. He and Michael study candlestick charts constantly, and a full green candlestick can be very significant depending on volume, the total number of shares traded, which tells you how much buying or selling actually happened that day.

Know What You Own: Why Direct Access to Your Portfolio Managers Matters

Elizabeth closed the hour with a challenge for every listener, and it’s one worth taking seriously if you’re 50 or older and depending on your savings to last.

“I would challenge the listener to ask your investment advisor why you own what you own, and to explain what’s in your portfolio. Because if that advisor cannot explain that simple question, then you need to come see us, because it’s the core of what we do.”Elizabeth, Dupree Financial Group

Personalized Investment Management vs. the Mass-Market Model

Many large national investment firms run on a mass-market model: standardized portfolios and an assigned investment counselor who may change from year to year. At Dupree Financial Group, the people you hear on the radio are the people doing the research, and they can tell you why each holding is in your account.

A Local Financial Advisor in Lexington, Kentucky, With a Real Person on the Phone

As Elizabeth put it, “You’re gonna get a real person on the phone. You’re not gonna get a phone chain.” Our clients have direct access to the portfolio managers and analysts making decisions, not a layer of hierarchy between them. We’re a fee-only fiduciary based in Lexington, and our Kentucky retirement planning work is built around long-term relationships with families across Central Kentucky. We don’t earn commissions on products we recommend, so we’re structured to sit on the same side of the table as you.

James summed up the approach: “We have a purpose in everything we do, in everything we buy.” And because, as Tom says, inflation doesn’t retire when you do, the core of what we build for retirees is income from dividend-paying stocks and bonds that has a chance to keep up over a retirement that may last decades.

If you’re not sure what you own or why, a Personalized Portfolio Analysis is the place to start. You can also read what clients say in our client testimonials, or call us directly at 859-233-0400.