U.S. stocks slid at midday Thursday as a 6% spike in crude oil and a jump in long-dated Treasury yields to their highest levels since 2007 hardened bets that the Federal Reserve will raise interest rates next week.
West Texas Intermediate crude jumped 5.6% to $101.43 a barrel, while Brent climbed 5.5% to $106.78. Trump told reporters Wednesday that "right after the election, oil prices are going to be tumbling downward," while the futures curve is pricing a conflict that outlasts November.
Treasuries sold off across the curve. The 10-year yield rose 8 basis points to 4.93%, its highest since 2023, while the 2-year added 9 basis points to 4.53% and the 30-year climbed 5 basis points to 5.35%, a level last seen in May 2007.
The trigger was August producer prices. Headline PPI rose 0.4% month-over-month, in line with forecasts, but the annual rate accelerated to 5.4% from a revised 4.8%, topping the 5.3% consensus.
CME FedWatch odds of a rate hike at next week's meeting climbed to roughly 70% from about 62% before the release, with August CPI due Friday morning.
The S&P 500 fell 0.4% to 7,605.06, while the Dow Jones Industrial Average dropped 266 points, or 0.5%, to 52,114.23.
The Nasdaq 100 slipped 0.7% to 29,222.19.
Apple Inc. (AAPL) was the standout among the Mag 7, rising 2.6% as the sell side lined up behind Wednesday's foldable iPhone Duo launch.
Precious metals kept sliding as the rate-hike repricing gathered pace. Gold fell 0.9% to $4,360 an ounce and silver tumbled 4.2%.
Thursday's Performance in Major US Indices
According to the market data platform:
- The Vanguard S&P 500 ETF (VOO) fell 0.4%.
- The SPDR Dow Jones Industrial Average ETF Trust (DIA) slid 0.6%.
- The Invesco QQQ Trust (QQQ) dropped 0.7%.
- The iShares Russell 2000 ETF (IWM) declined 0.8%.
Miners and Chips Crack as Copper's Record Run Snaps
The Materials Select Sector SPDR Fund (XLB) was the worst performer among S&P 500 sectors, down 1.3%, followed by the Technology Select Sector SPDR Fund (XLK), off 1.0%.
The Communication Services Select Sector SPDR Fund (XLC) led on the upside with a 0.7% gain, with the Consumer Staples Select Sector SPDR Fund (XLP) up 0.3%.
Notably, the Energy Select Sector SPDR Fund (XLE) failed to capitalize on the crude spike, easing 0.3% even as XLE holds a 47.6% year-to-date gain.
The Industrials Select Sector SPDR Fund (XLI) and Utilities Select Sector SPDR Fund (XLU) each fell 0.7%.
Industry funds told the sharper story. The SPDR S&P Metals & Mining ETF (XME) was the day's worst, down 3.4%, with the VanEck Gold Miners ETF (GDX) off 2.6%, the iShares U.S. Home Construction ETF (ITB) down 2.4% and the VanEck Semiconductor ETF (SMH) 2.3% lower.
Producers fared better than the service providers that drill for them: the SPDR S&P Oil & Gas Exploration & Production ETF (XOP) rose 0.7%, the best industry showing of the session, while the VanEck Oil Services ETF (OIH) fell 2.2%. The iShares Expanded Tech-Software Sector ETF (IGV) added 0.3%.
Skyworks Solutions Inc. (SWKS) was the top Russell 1000 gainer, up 9.9%, and merger partner Qorvo Inc. (QRVO) tracked it 6.9% higher.
AeroVironment Inc. (AVAV) rose 9.3% after reporting fiscal first-quarter adjusted earnings of 59 cents a share against roughly 25 cents expected, with revenue of $480.5 million topping the $456.2 million consensus and funded backlog at $1.5 billion.
UBS lifted its price target to $170 from $166 while maintaining Neutral, and BTIG, Needham and Citigroup all reiterated bullish ratings, though management left fiscal 2027 guidance unchanged.
Reddit Inc. (RDDT) gained 6.9% after a pre-market Piper Sandler note showed the platform's average user base grew 8% month-over-month in August, the fastest monthly pace of 2026, with total audience up 18.0% year-over-year and international users up 29.3%.
MongoDB Inc. (MDB) climbed 5.4%, extending a continued bounce off the post-earnings selloff that still has MongoDB roughly 13% below its pre-print level.
The Cooper Companies Inc. (COO) was the market's worst large-cap performer, plunging 14.7%.
Fiscal third-quarter revenue of $1.07 billion missed the $1.10 billion consensus even as adjusted EPS of $1.15 edged past $1.12, and the company cut full-year guidance to $4.51-$4.55 in adjusted EPS from a $4.63 consensus on $4.22-$4.252 billion in revenue.
Its strategic review concluded with a decision to retain CooperSurgical, saying the offers received "were not in shareholders' best interest." William Blair, Piper Sandler and Baird all downgraded the stock Thursday, with Baird cutting its target to $61 from $85.
Lincoln Electric Holdings Inc. (LECO) fell 8.2% after CFO Gabriel Bruno cut third-quarter incremental margin guidance to the "low 20s" from the "mid-20s" flagged on the July 30 call, blaming inflation, logistics and component costs at the Jefferies Global Industrials Conference.
Roughly 100 basis points of new pricing does not fully mature until the fourth quarter, keeping price/cost negative near term.
Copper names were routed after three-month LME copper touched a record $14,875 a tonne intraday before reversing to settle 0.2% lower, snapping a five-session run on a report that the White House has not yet decided on refined copper tariffs.
Freeport-McMoRan Inc. (FCX) dropped 7.1% and peer Southern Copper Corp. (SCCO) lost 6.7%.
Almonty Industries Inc. (ALM) slid 8.2%, moving with a broad critical-minerals liquidation that also hit MP Materials Corp. (MP)
Elsewhere, Elevance Health Inc. (ELV) rose 5.1% after reaffirming full-year 2026 guidance, while Macy's Inc. (M) slipped despite adjusted earnings of 63 cents beating a 37-cent consensus and a raised full-year outlook, as investors judged the profit guidance light.
Oracle Corp. (ORCL) fell 3.4% ahead of its fiscal first-quarter report after the close, with Adobe Inc. (ADBE) also due Thursday evening.
