The S&P 500 closed down -0.28% on Wednesday, the Dow Jones lost -0.37%, and the Nasdaq 100 slipped -0.31%. Futures on the indices also showed moderate declines. The main pressure factor came from rising Treasury yields: the 10-year yield rose 4 bps to 4.15%, a 2.5-week high.
Macro Data and Fed Rhetoric
Yields climbed after unexpectedly strong housing data — August new home sales jumped +20.5% m/m to the highest level in 3.5 years. Additional pressure came from Chicago Fed President Austan Goolsbee, who signaled he may not support further rate cuts as inflation is again trending higher.
The labor market remains stable, while inflation shows renewed pressure. Despite this, CME FedWatch data shows markets pricing in a 92% probability of a 25 bps rate cut at the late-October FOMC meeting.
Sectors and Corporate Stories
Higher yields triggered profit-taking in equities, but two sectors provided support:
Semiconductors: Marvell jumped +7% after announcing a $5 billion buyback, Intel rose +6% following news that Nvidia took a stake in the company. ARM, Qualcomm, Texas Instruments, and others also advanced.
Energy: WTI crude rose +2%, lifting ConocoPhillips, Devon Energy, and Phillips 66.
Notable movers included:
uniQure (QURE), soaring more than +240% after positive Huntington’s disease trial results.
Thor Industries (THO), up +6% on strong earnings.
General Motors (GM), up +2% after a UBS upgrade.
Weak performers were:
Freeport-McMoRan (FCX), down -16% after declaring force majeure in Indonesia.
Bloom Energy (BE), off -10% on a Jefferies downgrade.
Adobe (ADBE), losing -2% after a Morgan Stanley downgrade.
Global Markets and Bonds
In Europe, the Euro Stoxx 50 slipped -0.14%, while Asia saw gains: Shanghai +0.83%, Nikkei +0.3%. European bond yields were mostly steady, with the ECB noting balanced inflation risks.
What’s Next?
Key drivers for the week include:
Initial jobless claims;
Q2 GDP revision;
Core PCE inflation data, the Fed’s preferred gauge;
University of Michigan consumer sentiment.
The market is balancing between upbeat corporate earnings guidance (S&P 500 Q3 earnings growth expected at +6.9%) and the Fed’s hawkish tone. Volatility is likely to remain elevated in rate-sensitive sectors.
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