The S&P 500 Index ($SPX) (SPY) on Wednesday closed down -0.14%, the Dow Jones Industrial Average ($DOWI) (DIA) closed down -0.01%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed down -0.54%. September E-mini S&P futures (ESU26) fell -0.07%, and September E-mini Nasdaq futures (NQU26) fell -0.48%.
Stock indexes fell on Wednesday as soaring crude prices pushed bond yields higher, weighing on stocks. WTI crude oil (CLU26) rose more than +2% on Wednesday to a 6-week high after the US and Iran played down the prospects of peace talks as disruptions to global oil supplies continued to mount. The 10-year T-note yield climbed to a 2-month high of 4.66% on Wednesday amid rising crude oil prices.
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The weakness in software and cybersecurity stocks on Wednesday also weighed on equities. The markets are waiting for earnings results after Wednesday’s close from Alphabet to see evidence that the company’s investments in artificial intelligence are generating returns, as it plans to more than double capital spending from 2025 to as much as $190 billion this year. On the positive side, most chipmakers strengthened, and energy producers and service providers moved higher with Wednesday’s rally in WTI crude oil to a 6-week high.
The US conducted an 11th straight day of attacks against Iran on Wednesday in an effort to degrade the country’s ability to threaten commercial shipping in the Strait of Hormuz. Iran retaliated by striking US bases in Bahrain, Kuwait, and Jordan. President Trump said on Tuesday that the US has “no interest” in meeting with Iran until they are ready for serious peace negotiations.
Also, the Joint Maritime Information Center, a monitoring body for naval security, said on Wednesday that the Iran-backed Houthi rebels have deployed missiles and drones in preparation for attacks on shipping in the Red Sea. The Houthis have vowed to blockade shipping linked to Saudi Arabia and warned shipowners against calling at the nation’s ports. The move threatens Saudi oil exports from Yanbu, a Red Sea hub that the Saudi’s are using to ship crude since the war brought shipping through the Strait of Hormuz to a near halt. President Trump said Tuesday that if there is a blockade in the Red Sea, the US “will take care of it.”
US MBA mortgage applications rose +1.9% in the week ended July 17, with the purchase mortgage sub-index up +5.5% and the refinancing mortgage sub-index down -2.4%. The average 30-year fixed rate mortgage rose +4 bp to an 11-month high of 6.69% from 6.65% in the prior week.
The outlook for strong Q2 earnings, which begin in earnest this week, is a bullish factor for stocks. Forecasts compiled by Bloomberg Intelligence suggest Q2 earnings may increase by +23%, close to Q1’s blowout earnings of +30%, which was more than double the +12% analysts had expected. AI spending is expected to account for most of earnings, with AI infrastructure stocks set to contribute nearly 60% of the S&P 500’s earnings-per-share growth in Q2. So far, earnings results have been positive as 89% of the S&P 500 companies that reported Q2 earnings results have beaten estimates, according to data compiled by Bloomberg.
The markets are discounting a 34% chance of a +25 bp rate hike at the next FOMC meeting on July 28-29.
Overseas stock markets settled mixed on Wednesday. The Euro Stoxx 50 climbed to a 2-week high and closed up +0.50%. China’s Shanghai Composite closed up +0.07%. Japan’s Nikkei-225 Stock Average closed down -0.18%.
Interest Rates
September 10-year T-notes (ZNU6) on Wednesday closed down -7 ticks, and the 10-year T-note yield rose +3.3 bp to 4.661%. Sep T-notes tumbled to a 17-month nearest-futures low on Wednesday, and the 10-year T-note yield rose to a 2-month high of 4.663%. T-notes retreated on Wednesday as WTI crude oil prices rose more than +2% to a 6-week high, which raised inflation expectations and is a hawkish factor for Fed policy. The 10-year breakeven inflation rate rose to a 1-week high of 2.290% on Wednesday. Also, tepid demand for the Treasury’s $13 billion auction of 20-year T-bonds weighed on T-note prices as the auction had a bid-to-cover ratio of 2.64, below the 10-auction average of 2.65.
European government bond yields moved higher on Wednesday. The 10-year German bund yield rose to a 2-month high of 3.192% and finished up +0.8 bp to 3.171%. The 10-year UK gilt yield climbed to a 2-month high of 5.065% and finished up +0.4 bp to 5.034%.
UK Jun CPI eased to +2.6% y/y from +3.8% y/y in May, weaker than expectations of +2.7% y/y and the slowest pace of increase in 15 months. However, Jun core CPI was unchanged from May at +2.6% y/y, stronger than the +2.5% y/y expected.
Swaps are discounting a 5% chance of a +25 bp ECB rate hike at its next policy meeting on Thursday.
US Stock Movers
Software stocks are under pressure today, weighing on the broader market. ServiceNow (NOW) and Palantir Technologies (PLTR) closed down more than -6%, and Workday (WDAY) closed down more than -6% to lead losers in the Nasdaq 100. Also, Atlassian Corp (TEAM) closed down more than -5%, and Salesforce (CRM) closed down more than -4% to lead losers in the Dow Jones Industrials. In addition, Adobe Systems (ADBE), Datadog (DDOG), Autodesk (ADSK), and Thomson Reuters (TRI) closed down more than -3%, and Microsoft (MSFT) closed down more than -2%.
Cybersecurity stocks moved lower on Wednesday. Zscaler (ZS) closed down more than -4%, and Okta (OKTA) closed down more than -3%. Also, CrowdStrike Holdings (CRWD), Palo Alto Networks (PANW), Fortinet (FTNT), and Cloudflare (NET) closed down more than -1%.
Chipmakers and AI infrastructure stocks strengthened on Wednesday. Broadcom (AVGO) and NXP Semiconductors NV (NXPI) closed up more than +2%, and Nvidia (NVDA) closed up more than +2% to lead gainers in the Dow Jones Industrials. Also, Advanced Micro Devices (AMD), Seagate Technology Holdings Plc (STX), Analog Devices (ADI), Western Digital (WDC), Marvell Technology (MRVL), and Qualcomm (QCOM) closed up more than +1%.
Energy stocks and service providers moved higher on Wednesday as WTI crude oil rose more than +2% to a 6-week high. SLB Ltd (SLB) closed up more than +2%, and ConocoPhillips (COP), Devon Energy (DVN), Diamondback Energy (FANG), Occidental Petroleum (OXY), APA Corp (APA), and Chevron (CVX) closed up more than +1%.
Pegasystems (PEGA) closed down more than -16% after reporting Q1 adjusted EPS of 35 cents, weaker than the consensus of 44 cents.
GE Vernova (GEV) closed down more than -8% to lead losers in the S&P 500 after reporting Q2 adjusted Ebitda of $1.25 billion, below the consensus of $1.29 billion.
Reddit (RDDT) closed down more than -8% after the Wall Street Journal reported that the company has discussed cutting off Google’s access to its content for AI use.
TE Connectivity Plc (TEL) closed down more than -4% after announcing it entered into a definitive agreement to acquire Astrodyne TDI for about $1.4 billion.
Chubb Ltd (CB) closed down more than -3% after reporting Q2 net premiums written were $14.71 billion, below the consensus of $14.98 billion.
Northern Trust Corp (NTRS) closed down more than -3% after reporting Q2 non-interest expenses of $1.64 billion, higher than the consensus of $1.51 billion.
Super Micro Computer (SMCI) closed up more than +19% to lead gainers in the S&P 500 after saying its backlog rose to record levels at the end of 2026 with total new orders in excess of $60 billion received during Q4.
Westinghouse Air Brake Technologies (WAB) closed up more than +10% after reporting Q2 net sales of $3.18 billion, better than the consensus of $3.07 billion, and raising its full-year sales forecast to $12.30 billion to $12.60 billion from a previous estimate of $12.19 billion to $12.49 billion.
EQT Corp (EQT) closed up more than +8% after reporting Q2 adjusted Ebitda of $1.20 billion, better than the consensus of $1.11 billion.
CME Group (CME) closed up +5% after reporting Q2 adjusted EPS of $2.99, stronger than the consensus of $2.90.
DigitalOcean Holdings (DOCN) closed up more than +4% after Stifel upgraded the stock to buy from hold with a price target of $160.
CoreWeave (CRWV) closed up more than +3% after Truist Securities upgraded the stock to buy from hold with a price target of $126.
AT&T (T) closed up more than +3% after reporting Q2 wireless postpaid phone net additions of +432,000, well above the consensus of +325,264.
Earnings Reports(7/23/2026)
Albertsons Cos Inc (ACI), Allegion plc (ALLE), American Airlines Group Inc (AAL), Ameriprise Financial Inc (AMP), Appfolio Inc (APPF), Blackstone Inc (BX), Boyd Gaming Corp (BYD), Cleveland-Cliffs Inc (CLF), Columbia Banking System Inc (COLB), Comcast Corp (CMCSA), Comfort Systems USA Inc (FIX), Deckers Outdoor Corp (DECK), Digital Realty Trust Inc (DLR), Dover Corp (DOV), Dow Inc (DOW), Edwards Lifesciences Corp (EW), First Citizens BancShares Inc/ (FCNCA), Freeport-McMoRan Inc (FCX), Honeywell International Inc (HON), Huntington Bancshares Inc/OH (HBAN), Intel Corp (INTC), Kinsale Capital Group Inc (KNSL), Lazard Inc (LAZ), Lockheed Martin Corp (LMT), Nasdaq Inc (NDAQ), Newmont Corp (NEM), Norfolk Southern Corp (NSC), NVR Inc (NVR), Old Republic International Cor (ORI), Ovintiv Inc (OVV), PG&E Corp (PCG), Pool Corp (POOL), Popular Inc (BPOP), Quest Diagnostics Inc (DGX), Rexford Industrial Realty Inc (REXR), RingCentral Inc (RNG), Robert Half Inc (RHI), Roper Technologies Inc (ROP), RTX Corp (RTX), Ryder System Inc (R), SLM Corp (SLM), Snap-on Inc (SNA), SOUTHSTATE BANK CORP (SSB), SS&C Technologies Holdings Inc (SSNC), Summit Therapeutics Inc (SMMT), Thermo Fisher Scientific Inc (TMO), T-Mobile US Inc (TMUS), Tractor Supply Co (TSCO), Union Pacific Corp (UNP), VeriSign Inc (VRSN), Viking Therapeutics Inc (VKTX), West Pharmaceutical Services Inc (WST).
On the date of publication,
Rich Asplund
did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes.
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