The S&P 500 Index ($SPX) (SPY) is down by -0.92% today, the Dow Jones Industrial Average ($DOWI) (DIA) is down by -0.75%, and the Nasdaq 100 Index ($IUXX) (QQQ) is down -1.55%. December E-mini S&P futures (ESZ26) are down -0.90%, and December E-mini Nasdaq futures (NQZ26) are down -1.47%.

Stock indexes are under pressure today as crude oil prices raise inflation risks and push bond yields higher. Crude prices are up more than +2% today as hopes faded for an imminent breakthrough to end the war in Iran and reopen the Strait of Hormuz after President Trump rejected Iran’s latest proposals to end the war. Today’s surge in crude prices has raised inflation expectations and pushed global bond yields higher, with the 10-year T-note yield climbing to a 19-year high of 5.27% and the 10-year German Bund yield rising to a 17-year high of 3.65%. The jump in bond yields is weighing on chipmakers and AI stocks, which are leading the overall market lower.

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On the positive side for stocks, the US and China detailed a plan to cut tariffs on about $30 billion of imports from each country. China's Commerce Ministry said today that the reductions will take effect once both sides complete procedures required under their domestic laws. Also, today’s US economic news supported stocks after the Sep Dallas Fed manufacturing survey fell -1.8 to 9.8, a smaller decline than expectations of 7.8.

Nov WTI crude oil prices (CLX26) are up more than +2% today on fading hopes for an imminent breakthrough in peace talks to end the Iran war. President Trump on Saturday rejected Iran's latest proposal to end the war, and Iran said it will not soften any demands it has made to reopen the Strait of Hormuz. The Wall Street Journal reported that US negotiators are pressing Iran to make concessions on its nuclear program to revive the peace talks and placate President Trump on an issue he has made a top priority. The newspaper also reported that Mr. Trump expects to resume the bombing campaign against Iran after the US midterm elections on November 3. Crude prices also rose after Iran-backed Houthi militants in Yemen launched drone and missile attacks against Saudi Arabia over the weekend.

Markets are discounting a 68% chance of a +25 bp Fed rate hike at the next FOMC meeting on October 27-28.

Overseas stock markets are mixed today. The Euro Stoxx 50 is up +0.57%. China's Shanghai Composite fell to a 1.75-month low and closed down -1.67%. Japan's Nikkei-225 Stock Average fell from a 1.25-month high and closed down -0.73%.

December 10-year T-notes (ZNZ6) are down -17 ticks today. The 10-year T-note yield is up +9.7 bp to 5.257%. T-note prices tumbled to a 19-year nearest-futures low today, and the 10-year T-note yield rose to a new 19-year high of 5.272%. Today’s +2% jump in WTI crude oil has strengthened inflation expectations, undercutting T-note prices and pushing yields higher. Losses in T-notes are limited as today’s slump in equities has spurred some safe-haven demand for T-notes.

European government bond yields are moving higher today. The 10-year German bund yield climbed to a 17-year high of 3.650% and is up +4.1 bp to 3.642%. The 10-year UK gilt yield rose to a 1.5-week high of 5.421% and is up +5.4 bp to 5.420%.

Comments from ECB President Christine Lagarde were dovish for ECB policy when she said, “While growth has been resilient, since the last ECB meeting, long-term interest rates have risen notably, which will slow growth and reduce pass-through by more than projected in our September exercise.”

Markets are discounting a 37% chance of a +25 bp ECB rate hike at the ECB’s next meeting on October 29.

Chipmakers and AI stocks are sliding today, with the jump in T-note yields. The iShares Semiconductor ETF (SOXX) is down more than -3%. ARM Holdings Plc (ARM) is down more than -8% to lead losers in the Nasdaq 100, and Intel (INTC) and Qualcomm (QCOM) are down more than -6%. Also, SanDisk (SNDK) and Advanced Micro Devices (AMD) are down more than -5%, and Marvell Technology (MRVL) is down more than -4%. In addition, Micron Technology (MU), Seagate Technology Holdings Plc (STX), and Western Digital (WDC) are down more than -3%, and Applied Materials (AMAT), Lam Research (LRCX), and KLA Corp (KLAC) are down more than -2%.

Mining stocks are slipping today as gold and silver prices tumbled to 1.75-month lows. Anglogold Ashanti (AU) is down more than -6%, and Coeur Mining (CDE) and Hecla Mining (HL) are down more than -5%. Also, Newmont Corp (NEM) and Barrick Mining (B) are down more than -4%, and Freeport-McMoRan (FCX) and Southern Copper (SCCO) are down more than -1%.

Software stocks are slumping today, weighing on the broader market. Atlassian Corp (TEAM) is down more than -4%, and ServiceNow (NOW) and Oracle (ORCL) are down more than -3%. Also, Adobe Systems (ADBE), Intuit (INTU), and IBM (IBM) are down more than -2%, and Salesforce (CRM) is down more than -4% to lead losers in the Dow Jones Industrials. In addition, Autodesk (ADSK) and Microsoft (MSFT) are down more than -1%.

Bloom Energy (BE) is down more than -9% to lead losers in the S&P 500 after Oracle sent a New Mexico data center developer a notice citing force majeure, in an attempt to put off payments if the data center gets derailed.

Roblox (RBLX) is down more than -7% after Jeffries downgraded the stock to underperform from hold, with a price target of $38.

Boeing (BA) is down more than -4% to lead losers in the Dow Jones Industrials on a complaint that the company violated several federal laws when it retaliated against a federal contract compliance expert for calling attention to aircraft safety and worker health issues.

UiPath (PATH) is down more than -3% after D.A. Davidson downgraded the stock to underperform from neutral, with a price target of $10.

Snowflake (SNOW) is down more than -2% after announcing it intends to offer $3.5 billion of convertible senior notes due in 2029 and 2031.

Kodiak Sciences (KOD) is up more than +142% after saying a Phase-3 study of Zenkuda and tabirafusp-ted met key endpoints in patients with wet age-related macular degeneration.

Netease ADRs (NTES) are up more than +5% after Morgan Stanley named it a top pick among peers, expecting the company’s new Ananta game to become a blockbuster launch and a core growth driver next year.

Nvidia (NVDA) is up more than +2% to lead gainers in the Dow Jones Industrials after boosting its share buyback program by $150 billion.

IDT Corp (IDT), Jefferies Financial Group Inc (JEF), Liberty Live Holdings Inc (LLYVA), ReposiTrak Inc (TRAK), SR Bancorp Inc (SRBK), Vail Resorts Inc (MTN).

On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.

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