U.S. equities slid across the board at midday Wednesday as Brent crude pushed above $100 a barrel for the first time since July and the 10-year Treasury yield climbed to a three-year high, reviving the inflation-and-rate-hike trade that has dogged markets since the war with Iran began.
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West Texas Intermediate crude rose 3.6% to $96.35 a barrel, while Brent added 3.5% to $101.33 after U.S. forces destroyed five Iranian tankers near Kharg Island in retaliation for attempted missile attacks on a U.S. warship.
The energy move fed straight through to rates. The 10-year Treasury yield rose six basis points to 4.85%, the highest since October 2023, even after the Treasury Department tripled its scheduled buyback to $6 billion of off-the-run notes and bonds for Thursday.
Rate-hike expectations are doing the rest of the damage. Markets are pricing roughly a 60% chance of a 25-basis-point Fed hike after Friday’s strong jobs report, and a Reuters poll released Wednesday showed a rising number of economists now expect at least one increase.
Across U.S. equity markets by midday Wednesday, losses were broad-based, with only energy holding positive territory among the eleven S&P 500 sectors.
The S&P 500 fell 0.5% to 7,631, while the Dow Jones Industrial Average dropped 439 points, or 0.8%, to 52,348.
The Nasdaq 100 held up better, down 0.4% to 29,398, cushioned by a violent rotation inside big tech.
Meta Platforms Inc. (NASDAQ:META) and Cloudflare Inc. (NYSE:NET) were the standout exceptions, up 6.7% and 10%, respectively, on fresh AI product news.
The Russell 2000 was the clear laggard, falling 1.2% to 2,925 as higher borrowing costs hit the most rate-sensitive corner of the market hardest.
Wednesday’s Performance In Major U.S. Indices
| Index | Last | % Change | MTD | YTD |
|---|---|---|---|---|
| S&P 500 | 7,631.41 | -0.5% | -0.7% | +11.5% |
| Dow Jones | 52,347.56 | -0.8% | -1.6% | +8.9% |
| Nasdaq 100 | 29,397.94 | -0.4% | -0.2% | +16.4% |
| Russell 2000 | 2,925.06 | -1.2% | -1.1% | +17.9% |
According to the Benzinga Pro platform:
- The Vanguard S&P 500 ETF (NYSE:VOO) fell 0.5%.
- The SPDR Dow Jones Industrial Average ETF Trust (NYSE:DIA) slid 0.8%.
- The Invesco QQQ Trust (NASDAQ:QQQ) eased 0.4%.
- The iShares Russell 2000 ETF (NYSE:IWM) dropped 1.2%.
Energy Outperforms Among Sectors
The Energy Select Sector SPDR Fund (NYSE:XLE) was the only S&P 500 sector in the green, up 0.7%, while the Utilities Select Sector SPDR Fund (NYSE:XLU) was the worst performer at 1.3% lower.
The Consumer Discretionary Select Sector SPDR Fund (NYSE:XLY) and the Industrials Select Sector SPDR Fund (NYSE:XLI) both fell 1.2%, with the Consumer Staples Select Sector SPDR Fund (NYSE:XLP) and the Real Estate Select Sector SPDR Fund (NYSE:XLRE) close behind.
The Technology Select Sector SPDR Fund (NYSE:XLK) was effectively flat, and the Health Care Select Sector SPDR Fund (NYSE:XLV) and Financial Select Sector SPDR Fund (NYSE:XLF) each shed less than half a percent.
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Wednesday’s Stock Movers
Sunbelt Rentals Holdings, Inc. (NYSE:SUNB) was the single best performer in the Russell 1000, rallying 11% after reporting adjusted fiscal first-quarter EPS of $1.18 that beat consensus on better-than-expected revenue.
Specialty rental revenue rose 25.3% year-over-year, the company raised full-year fiscal 2027 revenue growth guidance to 6%-9% from 4.5%-7.5%, and declared its first quarterly dividend at $0.30 a share.
Cloudflare, Inc. jumped 10% after unveiling a security partnership with OpenAI around its Daybreak service, a concrete validation of CEO Matthew Prince’s pitch that Cloudflare sits at the center of machine-to-machine internet traffic.
Zscaler, Inc. (NASDAQ:ZS) rose about 3% in sympathy.
Datadog, Inc. (NASDAQ:DDOG) climbed 6.6% and Akamai Technologies, Inc. (NASDAQ:AKAM) added 6.3%. The moves appear to be a read-through bid across the edge and observability complex following Cloudflare’s announcement rather than anything stock-specific.
Meta’s 6.5% advance rounded out the top five, driven by the Muse launch, with Mizuho calling it “the beginning of a substantial product cycle” and KeyBanc reiterating that the market underestimates Meta’s AI positioning.
Astera Labs, Inc. (NASDAQ:ALAB) and Micron Technology, Inc. (NASDAQ:MU) also finished among the stronger large caps, up 5.7% and 2.3% respectively.
SK Hynix Inc. (NASDAQ:SKHY) rallied over 5% after Korean brokerage firm Mirae raised the stock price target.
On the downside, Casey’s General Stores, Inc. (NASDAQ:CASY) was the worst name in the index, plunging 14.3% after Tuesday’s post-close fiscal first-quarter report.
Revenue of $5.68 billion topped the $5.57 billion consensus, but management guided fiscal 2027 inside same-store sales growth to just 2%-5% and same-store fuel gallons to roughly flat, plus or minus 1% — a conservative outlook that overwhelmed the top-line beat.
Chewy, Inc. (NYSE:CHWY) fell 9.5% after this morning’s fiscal second-quarter print. Adjusted EPS of 36 cents landed in line with consensus and net sales rose 7.3% to $3.33 billion, narrowly ahead of the $3.32 billion estimate, but management raised only the low end of its full-year adjusted EBITDA margin outlook and said it is not counting on a meaningful consumer recovery.
Ubiquiti Inc. (NYSE:UI) dropped 10.5%, extending a multi-week de-rating tied to gross margin compression and rising component and shipping costs.
Vertiv Holdings Co (NYSE:VRT) slid 8.5% and X-Energy, Inc. (NASDAQ:XE) lost 9.3%. Both sit at the long-duration end of the AI power and data center trade, the part of the market most exposed to a 10-year yield at three-year highs, and the selling looks like positioning ahead of this week’s CPI and PPI prints rather than a news event.
Wednesday’s Russell 1000 Top Gainers
| Name | % change |
|---|---|
| Sunbelt Rentals Holdings, Inc. | +11% |
| Cloudflare, Inc. | +10% |
| Datadog, Inc. | +6.6% |
| Meta Platforms, Inc. | +6.7% |
| Akamai Technologies, Inc. | +5.7% |
Wednesday’s Russell 1000 Top Losers
| Name | % change |
|---|---|
| Casey’s General Stores, Inc. | -14.3% |
| Ubiquiti Inc. | -10.5% |
| Chewy, Inc. | -9.5% |
| X-Energy, Inc. | -9.3% |
| Vertiv Holdings Co | -8.5% |
Photo: Shutterstock
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