The stock market today fell victim to a brutal unwind in the optical and AI-hardware complex. The Nasdaq 100 slid 1.7% while long-end Treasury yields hovered near multi-decade highs and oil held above $91.
West Texas Intermediate crude rose 1.4% to $85.67 a barrel, extending a monthly gain of 3.9%, as President Donald Trump wrote on Truth Social that there are no “scheduled” talks with Iran. “The Naval Blockade remains in full force and effect,” he argued, while Iranian officials and state media flatly rejected this narrative.
Brent added 1.0% to $91.75, up nearly 51% year-to-date.
30-Year Yield Hits Highest Since 2007 As Stock Market Slips
The yield on the 10-year Treasury note held at 4.72%. The 30-year sat at 5.30%, its loftiest since 2007, while the 2-year was little changed at 4.18% — a curve shape that says the market is pricing term premium and issuance risk, not Fed tightening.
Traders have quietly walked back rate-hike bets. Markets now expect the Federal Reserve to stand pat in September and no longer fully price an increase by year-end, a sharp reversal from a week ago.
The S&P 500 fell 0.5% to 7,703.78, while the Dow Jones Industrial Average slipped 0.2% to 53,371.23. The Nasdaq 100 dropped 1.7% to 29,475. The small-cap Russell 2000 fell 0.9% to 3,029.18.
Gold — SPDR Gold Shares (GLD) — slipped 1.2% to $4,361 an ounce as firmer real yields and a steadier dollar capped bullion’s August advance, which still leaves the metal up 8.8% on the month.
Tuesday’s Performance In Major US Indices
According to market data:
- The Vanguard S&P 500 ETF (VOO) fell 0.6%.
- The SPDR Dow Jones Industrial Average ETF Trust (DIA) slipped 0.2%.
- The Invesco QQQ Trust (QQQ) dropped 1.6%.
- The iShares Russell 2000 ETF (IWM) declined 0.9%.
Fabrinet Blows A Hole In The Optical Trade
The Health Care Select Sector SPDR Fund (XLV) led all sectors with a 1.8% gain, followed by the Energy Select Sector SPDR Fund (XLE), up 1.4% and now 43.9% higher year-to-date, and the Consumer Staples Select Sector SPDR Fund (XLP), up 1.3%.
At the other end, the Technology Select Sector SPDR Fund (XLK) slumped 2.6%, the worst sector by a wide margin. The Industrials Select Sector SPDR Fund (XLI) fell 1.1% and the Materials Select Sector SPDR Fund (XLB) lost 0.6%.
Industry ETFs Tell A Rotation Story
The Invesco WilderHill Clean Energy ETF (PBW) was the worst performer, down 3.4%, while the VanEck Gold Miners ETF (GDX) dropped 2.5% alongside bullion and the U.S. Global Jets ETF (JETS) fell 0.9% on higher jet fuel costs.
On the winning side, the SPDR S&P Insurance ETF (KIE) rose 1.2% and the iShares Biotechnology ETF (IBB) added 0.8%, extending a 9.2% month-to-date run.
The session’s epicenter was Fabrinet (FN), which cratered 19.9% despite beating on both lines Monday evening.
Fiscal Q4 revenue of $1.316 billion topped the roughly $1.27 billion consensus and adjusted EPS of $4.10 beat the $3.81 estimate, but weaker margins, negative free cash flow and a softer near-term profit outlook overwhelmed the headline beat.
Guidance for the September quarter of $1.375 billion to $1.425 billion was not enough to stop the bleeding.
The Read-Across Is Indiscriminate
Applied Optoelectronics Inc. (AAOI) fell 12.4%, Coherent Corp. (COHR) lost 11.9% and Credo Technology Group Holding Ltd. (CRDO) dropped 11.5%.
Lumentum Holdings Inc. (LITE) slid 9.0% even after William O’Neil reinstated coverage at Buy, and Ciena Corp. (CIEN) fell 10.4%.
Semis and hardware followed: Marvell Technology Inc. (MRVL) dropped 8.0% and Corning Inc. (GLW) fell 7.6%. Keysight Technologies Inc. (KEYS) slid 7.3%.
SanDisk Corp. (SNDK) and Micron Technology Inc. (MU) fell by 8% and 6%, respectively.
Aurora Innovation Inc. (AUR) was the second-worst Russell 1000 name, down 13.6%, with the move consistent with risk-off pressure on cash-burning autonomy names as long-end yields grind higher.
The money went somewhere, and that somewhere was software and consumer.
Adobe Inc. (ADBE) gained 4.1%, Intuit Inc. (INTU) rose 4.5% and Atlassian Corp. (TEAM) added 4.0%. Ulta Beauty Inc. (ULTA) jumped 6.2%, Spotify Technology S.A. (SPOT) rose 5.5% and Tapestry Inc. (TPR) gained 3.8% after Daiwa upgraded the shares to Outperform with a $140 price target.
Among the day’s biggest winners, Targa Resources Corp. (TRGP) rallied 7.6% to a record after announcing 20-year integrated midstream agreements with Exxon Mobil Corp. (XOM) and lifting its fiscal 2026 growth capital expenditure plan to $5 billion from $4.5 billion; Morgan Stanley raised its target to $343 and Jefferies to $345.
DUOL, BBWI: Pure Analyst-Call Stories
Duolingo Inc. (DUOL) climbed 7.2% after D.A. Davidson upgraded it to Buy from Neutral and lifted its target to $160 from $130. Bath & Body Works Inc. (BBWI) rose 6.8% after Citigroup upgraded it to Buy from Neutral with a $25 target, arguing the post-earnings selloff had gone too far.
On the earnings front, The Home Depot Inc. (HD) gained roughly 1% after reporting EPS of $4.92 versus a $4.73 consensus, a rare bright spot for a housing-levered retailer amid collapsing starts and a 10-year yield pinned near 4.75%.
Millicom International Cellular S.A. (TIGO) fell 7.4% after JPMorgan cut the stock to Neutral from Overweight.
Tuesday’s Russell 1000 Top Gainers
Tuesday’s Russell 1000 Top Losers
