Stocks Settle Mixed as Tech Weakness Weighs on the Broader Market

The S&P 500 Index ($SPX) (SPY) closed down -0.10%, the Dow Jones Industrial Average ($DOWI) (DIA) closed up +0.35%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed down -0.43%.  September E-mini S&P futures (ESU26) fell -0.13%, and September E-mini Nasdaq futures (NQU26) fell -0.45%. 

Stock indexes erased an early advance on Wednesday and settled mixed, with the S&P 500 and Nasdaq 100 falling to 1.5-week lows.  Losses in chipmakers led the broader market lower on Wednesday, ahead of Micron Technology’s earnings results after Wednesday’s close to gauge whether artificial intelligence is living up to expectations.  Micron Technology is one of the biggest beneficiaries of the soaring demand, as companies stand to gain from the billions of dollars being pumped into AI infrastructure, with the stock up more than 260% this year.   

Stocks initially opened higher on Wednesday on evidence of the vast amounts of capital flowing into the buildout of AI infrastructure and its supply chain.  South Korea’s Kospi Stock Index closed up more than +3% on Wednesday after SK Hynix announced it was looking to raise 45.45 trillion won ($29 billion) in a US listing and intends to use the proceeds for building additional chip-making capacity.

Stocks also garnered support on Wednesday from falling crude prices, which lowered inflation expectations and knocked bond yields lower. WTI crude sank to a 3.5-month low on Wednesday, sparking a bond rally that pushed the 10-year T-note yield down by 10 bp to a 6-week low of 4.40%.  The falling bond yields and crude oil prices sparked a rally in homebuilders and building suppliers, airlines, and cruise line operators. 

On the negative side, today’s US economic news showed that May new home sales unexpectedly fell to a 4-month low. Also, mining stocks retreated on Wednesday as gold, silver, and copper prices plunged to multi-month lows, and energy producers slid as crude oil prices tumbled to a 3.5-month low.  In addition, cryptocurrency-exposed stocks fell on Wednesday after Bitcoin (^BTCUSD) tumbled to a 20-month low.

WTI crude oil (CLQ26) extended recent declines on Wednesday and fell more than -3% at a 3.5-month low as more tankers openly cross the Strait of Hormuz, boosting global crude supplies. Vessels are transiting the waterway with their satellite signals switched on, indicating growing confidence among shipowners.  Also, the International Maritime Organization said it had received guarantees allowing hundreds of ships to exit the Persian Gulf. 

US MBA mortgage applications rose +1.0% in the week ended June 19, with the purchase mortgage sub-index down -0.6% and the refinancing mortgage sub-index up +3.0%.  The average 30-year fixed rate mortgage fell -1 bp to 6.59% from 6.60% in the prior week.

The US Q1 current account deficit was -$225.8 billion, larger than the -$208.9 billion expected.

US May new home sales unexpectedly fell -7.3% m/m to a 4-month low of 580,000, weaker than expectations of an increase to 640,000.

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 are mixed today.  The Euro Stoxx 50 slipped to a 1.5-week low and is down -0.39%.  China's Shanghai Composite closed up +0.11%.  Japan’s Nikkei-225 Stock Average fell to a 1-week low and closed down -0.88%.

Interest Rates

September 10-year T-notes (ZNU6) on Wednesday closed up +20 ticks, and the 10-year T-note yield fell -9.7 bp to 4.400%.  Sep T-notes rallied to a 6-week high on Wednesday, and the 10-year T-note yield fell to a 6-week low of 4.398%.  Wednesday’s -3% plunge in WTI crude oil to a 3.5-month low has lowered inflation expectations, a supportive factor for T-note prices.  The 10-year breakeven inflation rate fell to a 14-month low of 2.176% on Wednesday.  Gains in T-notes accelerated on Wednesday after US May new home sales unexpectedly fell to a 4-month low.  T-notes maintained their gains on Wednesday amid signs of solid demand for the Treasury’s $70 billion auction of 5-year T-notes that had a bid-to-cover ratio of 2.35, right on the 10-auction average. 

European government bond yields moved lower on Wednesday.  The 10-year German bund yield fell to a 3.5-month low of 2.859% and finished down -5.5 bp to 2.865%.  The 10-year UK gilt yield dropped to a 3-month low of 4.673% and finished down -7.0 bp to 4.684%.

The German Jun IFO business confidence index rose +0.6 to 85.6, stronger than expectations of 85.5.

ECB Executive Board member Isabel Schnabel said, "From today's perspective, we will need to continue raising interest rates in order to bring inflation back to our target of 2% in the medium term."

Swaps are discounting a 9% chance of a +25 bp ECB rate hike at its next policy meeting on July 23.

US Stock Movers

Chipmakers and AI infrastructure stocks retreated on Wednesday, weighing on the broader market.  Seagate Technology Holdings (STX) and Western Digital (WDC) closed down more than -4%, and Qualcomm (QCOM) closed down more than -3%.  Also, Sandisk (SNDK) and ARM Holdings Plc (ARM) closed down more than -2%, and NXP Semiconductors NV (NXPI), KLA Corp (KLAC), and ON Semiconductor (ON) closed down more than -1%. 

Cryptocurrency-exposed stocks sold off on Wednesday as Bitcoin fell more than -3% to a 20-month low.   Strategy (MSTR) closed down more than -9% to lead losers in the Nasdaq 100 and 

Galaxy Digital Holdings (GLXY) closed down more than -8%.  Also, Coinbase Global (COIN) closed down more than -5%, and MARA Holdings (MARA) and Riot Platforms (RIOT) closed down more than -4%.

Mining stocks fell on Wednesday, after gold, silver, and copper prices retreated.  Anglogold Ashanti (AU) closed down more than -6%, and Coeur Mining (CDE) closed down more than -5%.  Also, Barrick Mining (B) closed down more than -4%, and Freeport McMoRan (FCX), Southern Copper (SCCO), Hecla Mining (HL), and Newmont Corp (NEM) closed down more than -3%. 

Energy producers and service providers were under pressure on Wednesday after WTI crude fell more than -3% to a 3.5-month low. Baker Hughes (BKR) and Halliburton (HAL) closed down more than -3%, and APA Corp (APA), ConocoPhillips (COP), SLB Limited (SLB), Diamondback Energy (FANG), Exxon Mobil (XOM), and Occidental Petroleum (OXY) closed down more than -2%.  Also, Chevron (CVX) closed down more than -2% to lead losers in the Dow Jones industrials. In addition, Devon Energy (DVN) and Phillips 66 (PSX) closed down more than 1%.

Homebuilders and building suppliers rallied on Wednesday on strong earnings from KB Home and on the 10-year T-note yield falling to a 6-week low of 4.40%, a supportive factor for housing demand.  KB Home (KBH) closed up more than +16%, and Builders Firstsource (BLDR) closed up more than +11% to lead gainers in the S&P 500.  Also, Lennar (LEN), DR Horton (DHI), Pulte Group (PHM), and Toll Brothers (TOL) closed up more than +6%.  In addition, Home Depot (HD) closed up more than +5% to lead gainers in the Dow Jones industrials.

Airline stocks and cruise line operators moved higher as Wednesday’s -3% plunge in crude oil to a 3.5-month low reduced fuel costs and boosted the companies’ profitability prospects.  United Airlines Holdings (UAL) and American Airlines Group (AAL) closed up more than +7%, and Alaska Air Group (ALK) and Delta Air Lines (DAL) closed up more than +4%.  Also, Royal Caribbean Cruises (RCL), Norwegian Cruise Line Holdings (NCLH), and Southwest Airlines (LUV) closed up more than +3%.

Travel stocks soared on Wednesday as crude oil prices plunged to a 3.5-month low, lowering fuel costs and boosting travel prospects.  MakeMyTrip Ltd (MMYT) closed up more than +11%, and Booking Holdings (BKNG) closed up more than +7%.  Also, Expedia Group (EXPE) closed up more than +6%, and Airbnb (ABNB) and TripAdvisor (TRIP) closed up more than +4%.

Cerebras Systems (CBRS) closed down by more than -19% after its annual sales forecast missed high investor expectations. 

Flowserve (FLS) closed down more than -8% after TD Cowen downgraded the stock to hold from buy with a price target of $70. 

Principal Financial Group (PFG) closed down more than -4% after Bank of America Global Research downgraded the stock to underperform from neutral with a price target of $95.

Terex Corp (TEX) closed up more than +3% after D.A. Davidson initiated coverage on the stock with a buy recommendation and a price target of $81. 

Twilio Inc (TWLO) is up more than +2% after Goldman Sachs initiated coverage on the stock with a buy recommendation and a price target of $300. 

Earnings Reports(6/25/2026)

Acuity Inc (AYI), Darden Restaurants Inc (DRI), FedEx Freight Holding Co Inc (FDXF), McCormick & Co Inc/MD (MKC), TD SYNNEX Corp (SNX).