Market Wrap
Published
The S&P 500 (SPY) slipped 0.1% as oil's surge past $106 a barrel and Treasury yields hitting multi-decade highs offset a Trump-Xi meeting that extended the US-China trade truce by two months. The 10-year Treasury yield touched 5.18% and the 30-year hit 5.47%, its highest since 2004, after Fed Chair Powell said September's inflation data drove the recent rate hike and signaled the central bank may need to tighten further.
The Strait of Hormuz standoff escalated through the session. Iran canceled flights to Gulf neighbors, the UAE suspended Iranian carriers, and Yemen's Houthis reportedly fired missiles and struck Saudi Aramco facilities in Yanbu. Brent settled up 3.4% at $106.60 a barrel and WTI rose 2.7% to $94.61, even as a US defense official said roughly 60 vessels transited the strait Wednesday, the highest daily crude volume since early July, with about 40 coordinating with the US military for protection. Natural gas futures jumped on a separate pipeline issue. Fed officials Barr and Paulson both linked inflation risk to energy costs and the AI buildout, while Bostic said long-term inflation expectations remain less encouraging than short-run readings.
Energy (XLE) was the only sector to advance, up 0.4%, with Valero, Talos Energy and SM Energy among the leaders. Health Care (XLV) rose 0.7% on Moderna, Eli Lilly and Agilent, with Lilly's Onswik winning FDA approval for type 2 diabetes and Merck's Remigromig meeting its endpoint in a diabetic macular edema trial. Materials (XLB) led decliners, down 1.2%, with Albemarle off 4.1%. Consumer Staples fell 0.9%, Utilities dropped 0.7%, and Industrials lost 0.7% as FedEx and UPS both fell more than 4%. Technology slipped 0.3%, with Gen Digital down over 12% and First Solar off more than 10%, while chipmakers Intel, Cadence and AMD bucked the trend with gains.
Company News
- MGM Resorts tumbled roughly 11% after a report that Barry Diller is withdrawing his takeover bid.
- GoDaddy jumped nearly 5% after the Financial Times reported Gen Digital is in early talks to acquire the company; Gen Digital shares fell more than 12%.
- Arm Holdings dropped 7.5% amid broad semiconductor weakness tied to the risk-off tone.
- Bio-Techne shareholders approved Merck KGaA's acquisition of the company.
- Sun Communities completed the roughly $1.05 billion sale of its UK Park Holidays business.
- Alcoa closed $2.6 billion in senior notes to help fund its South32 acquisition, while IQVIA priced $2 billion in notes and Open Text launched a $1 billion secured notes offering, both largely for refinancing.
- PepsiCo said it will raise prices on some chips, dips and soda by low-to-mid single digits.
- Starbucks said it will cut 250 store locations in North America.
- Weyerhaeuser fell nearly 5% after posting updated investor materials on its third-quarter outlook.
- MetLife disclosed preliminary variable investment income of at least $600 million pre-tax for the September quarter.