U.S. stocks slipped on Wednesday, giving back a little ground a day after the S&P 500 and Nasdaq Composite closed at all-time highs. The main pressure came from the bond market, where long-term Treasury yields jumped to their highest levels in more than two decades before easing. Higher yields make borrowing more expensive and can make stocks look less appealing compared with safer bonds, so investors tend to get nervous when they climb quickly. Oil prices, which stayed near $100 a barrel, and fresh details from the Federal Reserve added to the cautious mood.
What Moved Markets
The Dow Jones Industrial Average fell 341.41 points, or 0.66%, to close at 51,179.87. The S&P 500 dropped 17.16 points, or 0.22%, to finish at 7,801.77. The Nasdaq Composite lost 61.20 points, or 0.22%, to end at 27,538.69. The Dow, which is made up of just 30 large companies, took the biggest hit of the three major indexes.
The 10-year Treasury yield climbed as high as 5.36% in the morning, near its highest level since 2002, before settling back to about 5.28% after a well-received $39 billion auction of 10-year notes. The 30-year yield closed at 5.66%. Investors are also worried about how much debt governments around the world keep adding, a theme highlighted by the head of the International Monetary Fund in a speech on Wednesday.
In the afternoon, the Fed released minutes from its September meeting, when it raised interest rates by a quarter of a percentage point. The minutes showed most officials believe another rate hike would likely be appropriate by the end of the year, although they stressed that future decisions will depend on incoming data. Brent crude oil settled at $100.20 a barrel, down 0.4%, after briefly topping $102 amid continued uncertainty around the conflict with Iran and attacks near the Strait of Hormuz. Oil is well below last month’s peak near $110 but far above the $72 level seen before the war began.
Notable Movers
Worthington Steel (WS) fell 6.9% after the metals processor reported quarterly results that came in weaker than analysts expected.
Constellation Brands (STZ), the company behind Modelo beer and Robert Mondavi wine, rose 2.4% at the close after posting a stronger quarterly profit than analysts forecast. The gain was held back because its outlook for full-year profit was seen as a bit light. Shares had been trading lower earlier in the day.
Webull (BULL) was one of the day’s weakest stocks, sinking roughly 20% in afternoon trading after reports that a bipartisan House committee assessment flagged national security concerns about the brokerage’s ties to China. Webull said the report contains significant inaccuracies.
Crypto-linked stocks such as Coinbase (COIN), Robinhood (HOOD) and Strategy (MSTR) also came under pressure as Bitcoin dropped below $83,000 following about $696 million in forced liquidations of leveraged bets over 24 hours.
Looking Ahead
Investors will keep a close eye on Treasury yields, which have become the market’s biggest swing factor. If yields keep rising, stocks that have run up on high expectations could face more pressure. Corporate earnings season is also about to begin, and analysts are looking for profit growth of nearly 30%, a high bar that leaves little room for disappointment. Traders currently see about a 17% chance of a Fed rate hike at next week’s meeting. Oil prices and developments in the Middle East remain another risk to watch. On the earnings calendar, Levi Strauss (LEVI) and Applied Digital (APLD) reported results on Wednesday, and the reaction to those reports will be one of the first signs of how companies are handling the current environment.