U.S. stocks closed broadly lower on Wednesday as a spike in oil prices and rising Treasury yields spooked investors, snapping a nine-session winning streak for the S&P 500. Geopolitical tensions between the U.S. and Iran fueled the surge in crude, raising fresh concerns about inflation just as the market had been building momentum from a strong run in semiconductor and AI-related names. The result was a broad-based pullback that hit financials, technology, and communications stocks especially hard.
What Moved Markets
The Dow Jones Industrial Average fell 620.72 points, or 1.21%, to close at 50,687.07. The S&P 500 dropped 56.07 points, or 0.74%, to finish at 7,553.71. The Nasdaq Composite slid 239.92 points, or 0.89%, ending at 26,853.98.
West Texas Intermediate crude surged 2.41% to settle at $96.02 per barrel, while Brent crude rose 1.89% to $97.81. The jump in energy prices, driven by escalating U.S.-Iran tensions, pushed Treasury yields higher and weighed on risk appetite across the board. Energy was one of the few bright spots, with the sector gaining 1.31% on the session. Health care and consumer staples also managed modest gains, but they were not enough to offset the selling pressure in growth-heavy sectors.
Notable Movers
Alphabet (GOOGL) fell roughly 3.9% after announcing an increase to its stock offering, now totaling $84.75 billion — the company’s first new share issuance since 2005. The capital raise is aimed primarily at funding AI infrastructure, with about $30 billion earmarked for taxes on employee stock incentives. The dilution concerns weighed heavily on the stock and the broader communications sector.
Microsoft (MSFT) dropped 3.13%, contributing to the drag on the Dow and technology sector more broadly. Nvidia (NVDA) also pulled back 3.16% in a session that saw the VanEck Semiconductor ETF (SMH) manage a 0.78% gain — a sign that the chip rally remained selective even on a down day.
Broadcom (AVGO) reported second-quarter results after the bell, posting earnings per share of $2.44, beating estimates of $2.40, but revenue of $22.19 billion came in just shy of the $22.27 billion consensus. AI semiconductor sales topped $10 billion for the quarter, and the company guided for operating margins around 67% of revenue. Investors will be watching the after-hours reaction closely.
CrowdStrike (CRWD) was set to report after the close as well, with analysts expecting EPS of $0.88. The cybersecurity firm has been rebuilding investor confidence following last year’s Falcon outage and its results will be a key read on enterprise security spending.
On the upside, Marvell Technology (MRVL) added another 12% following yesterday’s 32.5% surge after Nvidia CEO Jensen Huang called the chipmaker a potential trillion-dollar company.
Looking Ahead
Investors will be parsing Broadcom and CrowdStrike earnings results in the coming session for signals about AI infrastructure spending and enterprise demand. The oil market bears watching closely — if U.S.-Iran tensions continue to escalate, energy prices could become a more persistent headwind for equities. Friday’s jobs report will also loom large, as any signs of labor market strength could reinforce the case for the Federal Reserve to keep rates elevated longer than the market hopes. After a strong run to record highs, Wednesday’s session served as a reminder that geopolitical risks and rising rates can quickly shift sentiment.