Ringside · Post-Bell · October 7
- The 10-year Treasury yield hit 5.36%, its highest since 2002, before strong demand at a note auction.
- Fed minutes showed most officials expect another rate increase by year end; futures price a 17% chance in October.
- Caterpillar fell 5.75% as industrials dropped 2.18%, the weakest of the eleven sectors.
Indexes
Stocks slipped from records Wednesday as long-term Treasury yields reached their highest levels in more than two decades. The S&P 500 fell 0.22% to 7,801.77. It was down as much as 0.71% in the morning. It recovered after the Treasury's $39 billion sale of 10-year notes drew a lower yield than traders expected. The Dow fell 0.66%, pulled down by Caterpillar, and the Russell 2000 dropped 1.31%. Industrials led the decline, and health care was the only sector to rise. The Nasdaq Composite closed at 27,538.69, down 0.22%.
| Index | Close | % Chg | Session range | Note |
|---|---|---|---|---|
| S&P 500 | 7,801.77 | -0.22% | 7,763.34 – 7,807.02 | Recovered most of a 0.71% drop |
| Nasdaq Composite | 27,538.69 | -0.22% | 27,341.31 – 27,547.20 | |
| Dow Jones Industrial Average | 51,179.87 | -0.66% | 50,917.42 – 51,406.44 | Caterpillar down 5.75% |
| Russell 2000 | 2,793.20 | -1.31% | 2,788.43 – 2,816.40 | Closed near the session low |
| Volatility index (VIX) | 15.08 | +0.47% | — |
Sector Heat Map
| Sector (ETF) | Close | % Chg |
|---|---|---|
| Health Care (XLV) | $168.81 | +1.03% |
| Utilities (XLU) | $41.15 | -0.02% |
| Consumer Staples (XLP) | $81.70 | -0.12% |
| Technology (XLK) | $201.39 | -0.30% |
| Consumer Discretionary (XLY) | $111.36 | -0.32% |
| Communication Services (XLC) | $111.26 | -0.35% |
| Financials (XLF) | $53.75 | -0.48% |
| Energy (XLE) | $63.36 | -0.61% |
| Real Estate (XLRE) | $40.57 | -1.29% |
| Materials (XLB) | $48.98 | -1.51% |
| Industrials (XLI) | $167.84 | -2.18% |
Ten of the eleven sectors fell. Industrials, materials and real estate fell the most.
In the News
Rates, FX, Commodities
The 10-year yield reached 5.36% in the morning, its highest since April 2002. The 30-year yield touched 5.73%. Both eased after the auction. Oil fell after the IEA decision. Both crude prices are exchange settlements reported by Reuters, and natural gas is a closing price.
| Rates & dollar | Level | Note |
|---|---|---|
| 2-year Treasury | 4.79% | Tuesday close, Federal Reserve H.15 |
| 10-year Treasury | 5.28% | Intraday high 5.36% |
| 30-year Treasury | 5.66% | Intraday high 5.73% |
| 2s10s spread | 48 bp | Tuesday close |
| Dollar index | 102.29 | Up 0.26% |
| Commodity | Wed settle / close | % Chg |
|---|---|---|
| WTI crude | $88.28 | -1.30% |
| Brent crude | $100.20 | -0.38% |
| Gold (Dec futures) | $4,134.60 | -1.25% |
| Natural gas | $3.211 | +3.11% |
Technicals
The S&P 500 closed at 7,801.77, about 0.2% below Tuesday's close. Wednesday's low of 7,763.34 is first support. The 20-day and 50-day averages are both near 7,685, about 1.5% lower.
The Nasdaq 100 finished at 31,160.08, just under Tuesday's close. It is 3.3% above its 20-day average of 30,157.02.
The 10-year yield remains well above its 20-day average of 5.12%.
The 2-year yield closed Tuesday at 4.79%. That is inside its September range of 4.71% to 4.92%. The 2-year yield is the one most closely tied to expectations for Fed rates.
Breakouts & Breakdowns
Breakouts
AbbVie (ABBV) closed at $271.36, above Tuesday's $266.69, which had been its highest close in a year. The 50-day average is $258.33.
Marathon Petroleum (MPC) rose 2.29% to $442.26. That topped its October 5 close of $433.47, the previous one-year high. The 50-day average is $373.06.
Breakdowns
Northrop Grumman (NOC) fell 2.00% to $473.46. That is below its October 5 close of $476.11, the previous one-year low. The shares are 38% below their March 2 high of $768.02.
Comcast (CMCSA) closed at $20.94, below Tuesday's $21.56, which had been its lowest close in a year. The 50-day average of $24.59 is 17% higher.
Top Movers
Gainers
Micron Technology (MU) rose 4.06% to $1,088.00. D.A. Davidson analyst Gil Luria raised his price target to $3,000 from $2,100 and kept a Buy rating, Stocktwits reported. Luria said Wall Street is still early in recognizing what the memory maker is worth. Micron fell early with other chip stocks before turning higher.
Penguin Solutions (PENG) built on its early gain and closed up 13.08% at $72.61, a day after its fiscal fourth-quarter report. The stock remains below its July 9 closing high of $81.39.
Constellation Brands (STZ) recovered from a drop at the open and closed up 2.35% at $118.39, the day after its quarterly report.
Losers
Webull (BULL) fell 19.09% to $5.89 after the House Select Committee on China said the trading app's ties to China put American investors and their data at risk. The committee said 863 employees, or 62% of the company's workforce, work at a mainland subsidiary. Shares of rival trading app Robinhood (HOOD) fell 2.22% to $109.51.
Hess Midstream (HESM) fell 14.63% to $33.03 after a restructuring with Chevron (CVX), its largest owner. Hess Midstream will buy out Chevron's stake, cutting its share count by nearly 40%, and will charge Chevron lower Bakken gathering and processing fees through 2033. Its preliminary 2027 forecast puts adjusted EBITDA, a measure of operating profit, about 30% below the midpoint of its 2026 forecast, Investing.com reported. Chevron fell 1.17% to $205.15. It expects an after-tax loss of $3 billion to $4 billion on the deal.
Caterpillar (CAT) fell 5.75% to $813.83. Deere (DE) lost 3.80% to $656.87. 24/7 Wall St. linked the drop to higher long-term Treasury yields, which raise borrowing costs for equipment buyers.
Macro Data Today
| Release | Actual | Consensus | Prior |
|---|---|---|---|
| EIA crude inventories, week to Oct. 2 | -3.2M bbl | +1.7M bbl (Reuters poll) | +0.92M bbl |
| Ten-year note auction ($39 billion), high yield | 5.300% | 5.317% when-issued | — |
| FOMC minutes, Sept. 15-16 | Most see another hike by year end | — | — |
Crude stocks fell even though analysts expected a build. The auction drew 2.77 bids for every dollar sold, above the 2.54 average. Indirect bidders, a group that includes foreign central banks, took 80.34% of the notes.
Notable Earnings This Session
Pre-Open
No major company reported before the open.
Post-Close
Levi Strauss (LEVI) reported third-quarter revenue of $1.61 billion, up 4%. Adjusted earnings rose to $0.48 a share from $0.34 a year earlier. Tariff refunds added a net $0.11 a share. The company raised its full-year adjusted earnings forecast to $1.54 to $1.56 a share. The previous range was $1.46 to $1.52.
Applied Digital (APLD) said fiscal first-quarter revenue rose 322% to $341.9 million. The data-center developer's net loss from continuing operations was $168.0 million, and its adjusted loss was $0.01 a share. It has leases for about 1.41 gigawatts across five campuses. The leases are worth about $36 billion over their base terms.
Drivers
- The Treasury sells $22 billion of 30-year bonds at 1 p.m., a day after strong demand for 10-year notes.
- PepsiCo (PEP) reports third-quarter results before the open, and Delta Air Lines (DAL) follows on Friday morning.
- Weekly jobless claims are due at 8:30 a.m. Isaias is forecast to reach the central Gulf Coast late Friday.