U.S. stocks fell for a second straight session on Wednesday as surging energy prices rekindled inflation fears and pushed Treasury yields higher, with equities sliding after President Donald Trump declared the June ceasefire with Iran "over."
The move followed a fresh U.S. strike on Iran and reports that Tehran had targeted merchant ships in the Strait of Hormuz, after Washington revoked a waiver that had allowed Iranian crude sales.
That was enough to send oil sharply higher and equities lower, as the prospect of costlier energy collided with a Federal Reserve that markets increasingly fear could tighten again.
West Texas Intermediate crude jumped 7.4% to around $75.69 a barrel, while Brent roared back above $80, up 7.9%. Diesel futures surged more than 13% as traders braced for tighter refined-product supply.
The 10-year Treasury yield rose for a second session, trading near 4.6%, as investors repriced inflation risk. Markets now assign roughly a 66% chance of a Fed rate hike in September, up from 62% on Tuesday.
Across U.S. equity markets by midday Wednesday, losses were broad-based. The S&P 500 fell 0.9% to 7,435.90, while the Dow Jones Industrial Average dropped about 806 points, or 1.5%, to 52,119.
The Nasdaq 100 fell 1.1% to 28,853, weighed by a fresh leg lower in chipmakers on concerns hyperscalers may slow AI infrastructure spending.
Precious metals sold off as fears of rate hikes lifted real yields. Gold fell 2% to around $4,025 an ounce, its lowest in a week, dragging the SPDR Gold Shares (GLD) lower.
Wednesday's Performance In Major US Indices
According to market data:
- The Vanguard S&P 500 ETF (VOO) fell 0.9%.
- The SPDR Dow Jones Industrial Average ETF Trust (DIA) slid 1.5%.
- The Invesco QQQ Trust (QQQ) dropped 1.1%.
- The iShares Russell 2000 ETF (IWM) declined 1.6%.
Energy Roars, Everything Else Bleeds, Oil Squeezes Wall Street
Energy was the session's lone green sector, with the Energy Select Sector SPDR Fund (XLE) up 2.4% as crude spiked.
At the other end, the Materials Select Sector SPDR Fund (XLB) tumbled 3.0% to lead decliners, followed closely by the Consumer Discretionary Select Sector SPDR Fund (XLY), down 2.4% as rising yields and pricier fuel squeezed consumers.
Financials and industrials each fell 1.6%. Defensive utilities and consumer staples held roughly flat.
The rotation showed up at the industry level.
Explorers and services rode the crude rally, with the SPDR S&P Oil & Gas Exploration & Production ETF (XOP) and the VanEck Oil Services ETF (OIH) among the day's standout gainers.
On the flip side, the VanEck Gold Miners ETF (GDX) fell alongside bullion, and the U.S. Global Jets ETF (JETS) came under pressure as the jump in fuel costs threatened airline margins.
Refiners, Producers Lead Russell 1000
Valero Energy Corp. (VLO) jumped 6.0%, HF Sinclair Corp. (DINO) rose 5.9% and Phillips 66 (PSX) gained 5.6%, all direct beneficiaries of surging crude and the revoked Iranian oil waiver, which points to tighter global supply and fatter refining margins.
Occidental Petroleum Corp. (OXY) added 5.6% on the same crude tailwind. Kirby Corp. (KEX) climbed 5.8%, with the marine transporter of petrochemicals and refined products riding the broad energy bid.
The session's top gainer was TeraWulf Inc. (WULF), up 8.8% and rebounding from Tuesday's steep slide as analysts including Rosenblatt and Bernstein raised or reiterated bullish price targets following the data-center operator's roughly $19 billion AI hosting lease with Anthropic.
Bloom Energy Corp. (BE) was the worst performer, down 8.9%. Wingstop Inc. (WING) fell 8.9% amid the consumer-discretionary rout and lingering analyst caution, including a recent TD Cowen downgrade on 2026 sales concerns, though no fresh Wednesday catalyst was confirmed.
Wednesday's Russell 1000 Top Gainers
Wednesday's Russell 1000 Top Losers
