A deepening sell-off gripped Wall Street midday Wednesday as crude oil spiked on a fresh U.S.-Iran escalation just hours before the Federal Reserve's rate verdict, dragging the S&P 500 to four-week lows and knocking the Nasdaq 100 down more than 10% from prior records.
President Donald Trump threatened strikes against Iran in response to attacks on U.S. targets in Jordan. The threat landed alongside a new round of Treasury sanctions aimed at what officials called Iran's Strait of Hormuz "monetization."
That was enough to reignite the energy trade and drain risk appetite.
West Texas Intermediate crude surged 6.7% to $84.58 a barrel, bringing its one-month gain to roughly 22%, while Brent jumped 7.4% to $90.27.
An outsized inventory draw amplified the oil move: EIA data showed U.S. crude stockpiles fell by 7.2 million barrels last week — against expectations for a build — leaving commercial inventories excluding the Strategic Petroleum Reserve at their lowest since September 2018.
The oil shock could hardly come at a worse time for the Fed, which wraps its two-day meeting at 2 p.m. ET. Markets overwhelmingly expect Chair Kevin Warsh to hold the funds rate at 3.50%-3.75%, but with inflation still running near 4% and several officials penciling in hikes this year, dissents are the wild card.
Polymarket puts 74% odds on no change and a 25% chance of a quarter-point hike.
The S&P 500 fell 1% to 7,358, a four-week low, while the Dow Jones shed 860 points, or 1.6%, to 51,887.
The Nasdaq 100 dropped 1.5% to 27,349 and is now off nearly 10% in July as the AI-capex rethink deepens.
Microsoft Corp. (MSFT) and Meta Platforms Inc. (META) slipped about 0.5% ahead of their after-the-bell reports.
The CBOE Volatility Index jumped nearly 10% to the 20 mark, reflecting hedging demand into the Fed announcement and tonight's megacap earnings.
Wednesday's Performance In Major U.S. Indices
According to market data:
- The Vanguard S&P 500 ETF (VOO) slipped 0.9%.
- The SPDR Dow Jones Industrial Average ETF Trust (DIA) shed 1.6%.
- The Invesco QQQ Trust (QQQ) dropped 1.5%.
- The iShares Russell 2000 ETF (IWM) eased 1.4%.
Sector Movers
The Energy Select Sector SPDR Fund (XLE) rallied 2.4%, extending its July advance to roughly 11% and pacing all sectors, while the Consumer Staples Select Sector SPDR Fund (XLP) added 0.8% and the Health Care Select Sector SPDR Fund (XLV) was down 0.2%.
At the other end, the Industrials Select Sector SPDR Fund (XLI) tumbled 2.66% while the Technology Select Sector SPDR Fund (XLK) and the Materials Select Sector SPDR Fund (XLB) each lost 1.7%. XLK is now down nearly 12% in July.
Among industry funds, the Invesco WilderHill Clean Energy ETF (PBW) slumped 3.3%, deepening a brutal 23% monthly slide.
Earnings Movers
Earnings drove the single-stock tape. Manhattan Associates, Inc. (MANH) exploded 27.1% higher after Tuesday evening's blowout print: second-quarter EPS of $1.39 topped the $1.32 consensus on revenue of $297.8 million versus $287.8 million expected.
Garmin Ltd. (GRMN) surged 17.3% after smashing estimates this morning with EPS of $2.81 versus $2.30 and revenue of $2.02 billion against $1.94 billion, while ExlService Holdings, Inc. (EXLS) climbed 16.3% on a double beat of its own: EPS of 59 cents versus 55 cents on revenue of $594.8 million versus $568.4 million.
Lithia Motors, Inc. (LAD) jumped 16.3% after crushing the consensus with $10.03 in quarterly EPS versus $8.71 expected, and Avantor, Inc. (AVTR) rallied 12.9% after topping estimates with adjusted EPS of 21 cents on $1.69 billion in revenue and raising full-year organic growth and profit guidance.
The software and IT-services glow spread wide: Cognizant Technology Solutions Corp. (CTSH) gained 11.2%. Morning beats also lifted Automatic Data Processing Inc. (ADP), up 5.5% after EPS of $2.64 beat the $2.59 estimate, and Amphenol Corp. (APH), up 5.5% on EPS of $1.35 versus $1.16.
Mondelez International Inc. (MDLZ) rose 4.9% on last night's beat, and Visa Inc. (V) rebounded 1% after posting quarterly revenue growth.
The losers' column was uglier. Parsons Corp. (PSN) cratered 35.1% after flat second-quarter revenue of $1.58 billion missed estimates, the company swung to a $15 million net loss on roughly $118 million of contract and joint-venture charges, and management slashed full-year adjusted EBITDA guidance to $500 million-$560 million from $615 million-$675 million.
Lennox International Inc. (LII) plunged 20.5% after quarterly revenue of $1.5 billion missed the $1.55 billion consensus despite an EPS beat. Peer Watsco, Inc. (WSO) shed 16% after posting $4 per share against a $4.39 estimate as operating margin compressed to 11.3% from 13.2%, and fellow HVAC name AAON, Inc. (AAON) dropped 8%.
V.F. Corp. (VFC) slid 18.1% after posting a wider-than-expected quarterly loss of 27 cents per share versus a 22-cent loss consensus.
Vertiv Holdings Co (VRT) dropped 14.8% despite beating on EPS at $1.52 versus $1.42 and raising full-year guidance, as second-quarter revenue of $3.27 billion missed the $3.38 billion consensus and management blamed "minor timing shifts" tied to supply-chain congestion on large data-center deployments, feeding the AI-capex angst that also hit chip equipment.
On that front, KLA Corp. (KLAC) sank 8.5% in the fallout from SK Hynix Inc. (SKHY)'s downbeat report, which triggered a record rout in Seoul, with Micron Technology Inc. (MU), Applied Materials Inc. (AMAT) and Sandisk Corp. (SNDK) down between 4% and 8%. Intel Corp. (INTC) lost 3.5%.
Wednesday's Russell 1000 Top Gainers
Wednesday's Russell 1000 Top Losers
