U.S. stocks halted a three-day losing streak at midday Wednesday as oil prices sank more than 5% on revived hopes of a U.S.-Iran de-escalation, easing the energy-driven inflation shock that has dogged risk assets all week and setting the stage for NVIDIA Corp. (NASDAQ:NVDA) earnings after the close.
• NVDA stock is taking a breather. What’s next for NVDA stock?
President Donald Trump said the U.S. is in the "final stage" of negotiations with Iran, while Iran's Foreign Ministry said exchanges between Tehran and Washington are still ongoing and continue to be based on Iran's 14-point proposal.
WTI crude tumbled 5.1% to $98.83 a barrel, retreating from triple-digit territory after closing above $104 on Tuesday. Brent crude sank 5.3% to $105.39, although both benchmarks remain more than 70% higher year-to-date as the Strait of Hormuz stand-off continues to keep prices roughly 50% above pre-war levels.
Long-end Treasury yields eased modestly. The 10-year yield slipped eight basis points to 4.59% after touching a 16-month high of 4.70% on Tuesday, while the 30-year yield retreated seven basis points to 5.12% from an 18-year peak.
Markets are still pricing roughly 50% odds of a Federal Reserve rate hike in December, and traders are awaiting the FOMC minutes due later in the session for further guidance.
Across U.S. equity markets by midday Wednesday, gains were broad-based. The S&P 500 climbed 0.9% to 7,418, on track to halt a three-day losing streak.
The Nasdaq 100 rose 1.1% to 29,148, powered by semiconductors. Within Magnificent Seven stocks, Nvidia climbed 2% ahead of its quarterly print, Amazon.com Inc. (NASDAQ:AMZN) added 2%, Tesla Inc. (NASDAQ:TSLA) rose 2.1%, Meta Platforms Inc. (NASDAQ:META) gained 0.5%, and Apple Inc (NASDAQ:AAPL) was up slightly at 0.48%, while Microsoft Corp. (NASDAQ:MSFT) and Alphabet Inc. (NASDAQ:GOOGL) traded slightly in the red.
The Russell 2000 outperformed, rallying 2.3% as falling oil prices and easing yields revived risk appetite in small caps.
Wednesday’s Performance In Major U.S. Indices
| Index | Last | % Change |
|---|---|---|
| S&P 500 | 7,418.53 | +0.9% |
| Dow Jones | 49,851 | +1.0% |
| Nasdaq 100 | 29,148 | +1.1% |
| Russell 2000 | 2,808.70 | +2.3% |
According to the Benzinga Pro platform:
- The Vanguard S&P 500 ETF (NYSE:VOO) rose 0.9%.
- The SPDR Dow Jones Industrial Average ETF Trust (NYSE:DIA) gained 1%.
- The Invesco QQQ Trust (NASDAQ:QQQ) climbed 1.1%.
- The iShares Russell 2000 ETF (NYSE:IWM) rallied 2.3%.
Semis and Airlines Lead As Oil Stocks Crater On Iran De-Escalation Bets
Cyclical leadership defined the tape.
The Consumer Discretionary Select Sector SPDR Fund (NYSE:XLY) was the day’s strongest S&P 500 sector, up 2.1%, followed by the Technology Select Sector SPDR Fund (NYSE:XLK), which advanced 1.9% as semiconductors caught a sharp bid into Nvidia’s print.
The Industrials Select Sector SPDR Fund (NYSE:XLI), the Materials Select Sector SPDR Fund (NYSE:XLB) and the Financial Select Sector SPDR Fund (NYSE:XLF) each rose between 0.9% and 1.6%.
The Energy Select Sector SPDR Fund (NYSE:XLE) lagged, falling 1.7% in lockstep with crude.
Sub-industry moves told the same story. The U.S. Global Jets ETF (NYSE:JETS) ripped 5.8% as lower jet fuel costs gave the carriers a powerful tailwind.
The Invesco WilderHill Clean Energy ETF (NYSE:PBW) jumped 4.4%, the VanEck Gold Miners ETF (NYSE:GDX) added 3.4% and the VanEck Semiconductor ETF (NASDAQ:SMH) climbed 3.3%.
On the losing side, the SPDR S&P Oil & Gas Exploration & Production ETF (NYSE:XOP) shed 1.9% as Exxon Mobil Corp. (NYSE:XOM) dropped 2.3% and Chevron Corp. (NYSE:CVX) slid 1.8%.
Chip names paced the Nasdaq 100 bid. Advanced Micro Devices Inc. (NASDAQ:AMD) surged 8%, Lam Research Corp. (NASDAQ:LRCX) climbed 7%, Intel Corp. (NASDAQ:INTC) rose 5.6% and Micron Technology Inc. (NASDAQ:MU) added 3.2%, with the cohort positioning for an upbeat read-through from Nvidia.
Among the day’s biggest single-stock movers, Astera Labs Inc. (NASDAQ:ALAB) jumped 14.5% after Evercore ISI lifted its price target to $297 from $215, citing accelerating AI-connectivity demand.
Enphase Energy Inc. (NASDAQ:ENPH) climbed 11.1% in sympathy with the broader clean-energy rebound after pre-orders opened earlier this month for its IQ9S-3P Commercial Microinverter.
Wayfair Inc. (NYSE:W) rallied 10.7% as the home retailer extended gains on its first-quarter print, which showed a 7.4% revenue jump and a return to active-customer growth. Alaska Air Group Inc. (NYSE:ALK) surged 10.1% with the rest of the carrier complex on the oil drop, leading peer gains.
The earnings tape produced sharp moves on both sides. Target Corp. (NYSE:TGT) fell 3.9% even after delivering a first-quarter EPS of $1.71 against the $1.35 consensus and revenue of $25.4 billion, with investors zeroing in on rising SG&A costs and a lower operating margin despite a raised full-year sales outlook.
Analog Devices Inc. (NASDAQ:ADI) tumbled 7% after the second-quarter EPS of $3.09 topped the $2.90 estimate and revenue beat at $3.62 billion, but the third-quarter EPS guidance of $3 was viewed as light. Hasbro Inc. (NASDAQ:HAS) slid 7.5% as investors fixated on second-quarter disruption from a previously disclosed cyber breach despite a first-quarter EPS beat at $1.39.
Reddit Inc. (NYSE:RDDT) sank 6.40% as the stock continued to feel pressure from Phillip Securities’ May 7 downgrade to Accumulate from Buy and lingering concerns over ad-spend visibility.
CF Industries Holdings Inc. (NYSE:CF) fell 5.45%, amid rising expectations of a peace deal between U.S. and Iran.
Wednesday’s Russell 1000 Top Gainers
| Name | % change |
|---|---|
| Roivant Sciences Ltd. (NASDAQ:ROIV) | +15.42% |
| Astera Labs, Inc. | +14.5% |
| Enphase Energy, Inc. | +11.1% |
| Wayfair Inc. | +10.7% |
| Alaska Air Group, Inc. | +10.1% |
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