Key facts
- US stocks declined from record highs as Treasury yields and oil prices rebounded.
- Investors awaited the Federal Reserve's September meeting minutes.
- Micron Technology dropped 2.3%, Nvidia eased 0.7%, and the Philadelphia chip index fell 2.3%.
- SpaceX lost 1.7% after a report of seeking $40 billion in financing for Nvidia chips.
- Eight of 11 S&P 500 sectors traded lower, with materials and industrials leading losses.
- Energy and healthcare sectors were higher, up 0.6% each.
US stocks eased from record highs on Wednesday as Treasury yields and oil prices rebounded, prompting caution among investors ahead of the Federal Reserve's September meeting minutes. Sentiment turned more cautious as investors reassessed the outlook for interest rates and energy costs.
Brent crude was back above the psychologically important $100-a-barrel level as Middle East supply concerns persisted. "We're seeing a little bit of profit-taking today. The market is very focused on the Fed minutes, but ultimately it's where oil prices and yields move that will determine the market's direction today," said Peter Cardillo, chief market economist at Spartan Capital Securities.
Chip stocks were among the top decliners. Memory chip firm Micron Technology dropped 2.3%, chip giant Nvidia eased 0.7% and the broader Philadelphia chip index fell 2.3%. Elon Musk's SpaceX lost 1.7% after a Financial Times report that the rockets-to-AI firm was seeking $40 billion in financing to fund purchases of Nvidia chips.
Eight of the 11 S&P 500 sectors traded lower, with the materials and industrials leading losses. Energy and healthcare were higher, up 0.6% each.
At 9:43 a.m. ET, the Dow Jones Industrial Average fell 472.21 points, or 0.92%, to 51,049.07, the S&P 500 lost 44.80 points, or 0.56%, to 7,775.04 and the Nasdaq Composite lost 235.16 points, or 0.85%, to 27,364.73.
The yield on 30-year Treasury bonds rose to the highest since 2002, last at 5.72% ahead of the release later in the day of minutes from the US Federal Reserve's September policy meeting, when policymakers raised interest rates to combat inflation. Traders widely expect the Fed to hold rates steady at its October meeting, but a December hike remains on the cards, according to the CME FedWatch Tool.
The S&P 500's equal-weighted counterpart stands more than 5% away from record highs, and the interest-rate-sensitive Russell 2000 small-cap index is down more than 8% from its all-time high.
Focus will likely shift to corporate America's performance as the third-quarter earnings season kicks off next week, with a number of high-profile financial firms expected to report on Tuesday. US stocks have been buoyed lately by optimism around the AI trade and expectations of strong corporate earnings, despite higher energy prices and a summer selloff in bond markets that fueled concerns about tighter monetary policy. Analysts currently expect S&P 500 earnings growth of 30.6% for the July-to-September period, led by an expected 114.7% jump in energy earnings, followed by a 66.5% estimated surge in tech results, according to LSEG.
Roblox fell 1.6% after Google and Unity announced a partnership on a new AI gaming platform that could compete with the gaming platform's offerings. Declining issues outnumbered advancers by a 3.74-to-1 ratio on the NYSE and by a 3.19-to-1 ratio on the Nasdaq. The S&P 500 posted eight new 52-week highs and five new lows, while the Nasdaq Composite recorded eight new highs and 129 new lows.