US stocks fall as Treasury yields and oil surge

U.S. equities fell for a second straight session Tuesday as a relentless climb in Treasury yields and another leg higher in crude oil forced investors to price in a genuine risk that the Federal Reserve will raise interest rates this month. The Nasdaq 100 led the decline, sliding 1.4% as the most expensive corners of software cracked. West Texas Intermediate crude rose 3.2% to $88.53 a barrel, a second consecutive advance, with the blockage of the Strait of Hormuz still choking regional exports after renewed U.S.-Iran strikes in the Persian Gulf.

Brent added 2.5% to $92.78. The knock-on effects are spreading. Asian spot LNG prices hit a five-month high, EU natural gas jumped 4.2% and heating oil surged 5%, keeping the inflation impulse alive well beyond the crude complex. The yield on the 10-year Treasury note climbed to 4.78%, up roughly 1 basis point and higher for a fifth straight session, its loftiest level since January 2025.

The 2-year yield rose 2 basis points to 4.38%, while the 30-year bond held at 5.25%. Markets now price in roughly a 68% probability of a 25-basis-point rate hike from the Fed this month, up sharply from about 40% a week ago, after Fed Chair Kevin Warsh reiterated his commitment to bringing inflation down at the Jackson Hole Symposium. A hotter-than-expected 3.3% flash reading on Eurozone inflation added to the global tightening consensus, with the European Central Bank now widely expected to follow. The S&P 500 fell 0.5% to 7,650, hitting a four-week low earlier in the session, while the Dow Jones Industrial Average shed 0.5% to 52,939.

The Nasdaq 100 was the clear laggard, down 1.4% to 29,054. The Russell 2000 fell 0.7% to 2,935. Gold offered no shelter, sliding 1.6% to $4,368 an ounce as rate-hike expectations lifted real yields, leaving bullion struggling below $4,400. Silver dropped 1.9% to $65.27.

Tuesday’s Performance In Major US Indices Index Last % Change MTD YTD S&P 500 7,650 -0.5% -0.5% +11.8% Dow Jones 52,939 -0.5% -0.5% +10.2% Nasdaq 100 29,054 -1.4% -1.4% +15.1% Russell 2000 2,935 -0.7% -0.7% +18.5% Updated by 12:30 PM ET According to the Pro platform: The Vanguard S&P 500 ETF (NYSE: VOO ) fell 0.5%. The SPDR Dow Jones Industrial Average ETF Trust (NYSE: DIA ) slid 0.5%. The Invesco QQQ Trust (NASDAQ: QQQ ) dropped 1.4%. The iShares Russell 2000 ETF (NYSE: IWM ) declined 0.7%.

Software Multiples Snap While Defensives Catch A Bid The Consumer Staples Select Sector SPDR Fund (NYSE: XLP ) led all S&P 500 sectors with a 0.8% gain, the textbook defensive response to a hawkish rates shock. The Health Care Select Sector SPDR Fund (NYSE: XLV ) rose 0.6%, the Utilities Select Sector SPDR Fund (NYSE: XLU ) added 0.5% and the Energy Select Sector SPDR Fund (NYSE: XLE ) gained 0.3% on the crude bid. At the other end, the Consumer Discretionary Select Sector SPDR Fund (NYSE: XLY ) fell 1.2%, with the Technology Select Sector SPDR Fund (NYSE: XLK ) and the Industrials Select Sector SPDR Fund (NYSE: XLI ) each down 1.1%.

The Materials Select Sector SPDR Fund (NYSE: XLB ) shed 0.8%. Among industry groups, the VanEck Agribusiness ETF (NYSE: MOO ) was the standout gainer, up 1.1% as wheat pushed toward a three-and-a-half-year high and soybeans jumped 2.2%. The iShares Biotechnology ETF (NASDAQ: IBB ) added 0.4%. On the downside, the VanEck Gold Miners ETF (NYSE: GDX ) tumbled 2.0% alongside bullion, the First Trust Dow Jones Internet Index Fund (NASDAQ: FDN ) lost 1.5%, and the U.S.

Global Jets ETF (NYSE: JETS ) dropped 1.3% as higher jet fuel costs bit. Axon Enterprise, Inc. (NASDAQ: AXON ) was the worst performer in the index, plunging 9.2% to $514. Today’s move looks like the sharpest expression of a broad de-rating in the market’s most richly valued software names.

CrowdStrike Holdings, Inc. (NASDAQ: CRWD ) fell 6.9% to $215.06 even after announcing it had crossed a $2 billion milestone with channel partner Optiv, with the stock giving back part of a roughly 97% year-to-date advance through Monday’s close. The selling swept the entire cybersecurity complex. Palo Alto Networks, Inc.

(NASDAQ: PANW ) dropped 5.4% to $361.33 with investors de-risking ahead of its fiscal fourth-quarter results, due after the close Tuesday. Fortinet, Inc. (NASDAQ: FTNT ) slid 5.3% to $161.85 with no company-specific catalyst, caught in the same sector-wide retreat. The de-rating extended to electronic design automation.

Cadence Design Systems, Inc. (NASDAQ: CDNS ) fell 5.6% to $319.72, with peer Synopsys, Inc. (NASDAQ: SNPS ) down 3.6%. Elsewhere in software, Oracle Corp.

(NYSE: ORCL ) lost 4.6%, Datadog, Inc. (NASDAQ: DDOG ) fell 4.4% and ServiceNow, Inc. (NYSE: NOW ) shed 3.7%. Dell Technologies Inc.

(NYSE: DELL ) fell 4.3% ahead of its own report after the bell. Tighter credit conditions hit capital-markets-sensitive names hard. Blackstone Inc. (NYSE: BX ) dropped 4.1% and Apollo Global Management, Inc.

(NYSE: APO ) lost 3.6%, while Interactive Brokers Group, Inc. (NASDAQ: IBKR ) fell 5.0%. Coinbase Global, Inc. (NASDAQ: COIN ) slid 4.7% with Bitcoin (CRYPTO: BTC) down 1.4% near $77,770.

Transports also struggled on the fuel-cost squeeze, with Old Dominion Freight Line, Inc. (NASDAQ: ODFL ) down 4.7% and CSX Corp. (NASDAQ: CSX ) off 3.8%. Optical networking names Ciena Corp.

(NYSE: CIEN ) and Lumentum Holdings Inc. (NASDAQ: LITE ) fell 5.1% and 4.9% respectively, with Ciena due to report Thursday morning. On the winning side, Moderna Inc. (NASDAQ: MRNA ) topped the tape with a 7.0% gain to $150, a follow-through move from August’s surge on late-stage data for its Merck-partnered personalized mRNA melanoma vaccine.

The Mosaic Company (NYSE: MOS ) rose 3.8% to $25.04, moving instead with a broad bid across the agricultural complex as wheat climbed toward a three-and-a-half-year high and corn added 1.3%. Peers followed: Corteva, Inc. (NYSE: CTVA ) gained 3.3%, Bunge Global SA (NYSE: BG ) added 2.6%, Archer-Daniels-Midland Company (NYSE: ADM ) rose 2.6% and Deere & Company (NYSE: DE ) climbed 2.4%. Howmet Aerospace Inc.

(NYSE: HWM ) advanced 3.8% to $254.22, following a steady stream of broker price-target increases in recent weeks, including RBC Capital to $350 and Morgan Stanley to $335. Dollar Tree, Inc. (NASDAQ: DLTR ) gained 3.7% to $131.32. Dollar General Corp.

(NYSE: DG ) rose 3.3%, Casey’s General Stores, Inc. (NASDAQ: CASY ) added 2.8% and The Kroger Co. (NYSE: KR ) gained 2.1%. Managed care rallied in the same defensive trade.

CVS Health Corp. (NYSE: CVS ) climbed 3.3% to $96.97, moving alongside Elevance Health, Inc. (NYSE: ELV ), up 2.8%, Centene Corp. (NYSE: CNC ), up 2.6%, The Cigna Group (NYSE: CI ), up 2.5%, and Humana Inc.

(NYSE: HUM ), up 2.1%. The session’s cleanest earnings story was Medtronic plc (NYSE: MDT ), which rose 2.5% to $92.88, after reporting fiscal first-quarter adjusted EPS of $1.45 versus the $1.39 consensus on revenue of $9.8 billion, up 13.7% and ahead of the $9.55 billion estimate. Medtronic lifted full-year organic revenue growth guidance to 7.25%-7.75% from 6.75%-7.25% and raised its adjusted EPS range to $5.94â€"$6.00, with cardiovascular up 18.9% organically. Tuesday’s Russell 1000 Top Gainers Name % change Moderna Inc.

+6.97% The Mosaic Company +3.79% Howmet Aerospace Inc. +3.78% Dollar Tree, Inc. +3.73% CVS Health Corporation +3.26% Tuesday’s Russell 1000 Top Losers Name % change Axon Enterprise, Inc. -9.24% CrowdStrike Holdings, Inc.

-6.90% Cadence Design Systems, Inc. -5.63% Palo Alto Networks, Inc. -5.44% Fortinet, Inc. -5.31% Photo: Shutterstock