US stock indices give up their gains and close lower on the dayAlphabet beats Q2 estimates as cloud revenue surges and Gemini usage growsTesla, Alphabet, ServiceNow, IBM, Texas Instruments all report after the closeIran broadens its threats as the rhetoric turns increasingly dangerousECB expected to hold, but EURUSD is nearing a breaking point after being confined.US has informed Israel of its intention to use bombers in bombing IranUS treasury auctions off $13 billion of 20 year bonds at a high yield of 5.163%The major European indices close higher the 3rd day in a row.Microsoft: AI adoption is “accelerating at an incredible pace”, but stock is not impressed.USTR Greer testifies in the Senate: We are moving with all due speed on USMCA negotiationsCrude oil inventories rise 2.010M vs -1.052M estimateTrump News: Iran will pay a big priceTrump: If Iran fires at a ship, the US will bomb a bridge/power station. Crude oil remains elevated.investingLive European markets wrap: Oil prices ramp higher as Middle East conflict expands to the Red SeaThe USD is little changed to kickstart the North American trading dayRed Sea shipping disruption now in focus as vessels are forced to change course
The US dollar finished little changed in up-and-down trading as geopolitical tensions in the Middle East continued to overshadow economic data (there was no data released in the US today) With the Fed in its blackout period and little on the US calendar, traders focused on rising oil prices, escalating US-Iran rhetoric, and the potential risks to shipping through the Strait of Hormuz.
The biggest mover today was the USDCHF as it moves higher on yield differential demand. The pair is trading near highs for the day and highs from July at 0.81509. The high price has reached just short of that at 0.8148 (up 0.86% on the day).
The USDCAD fell after two days higher. The move lower today stalled the fall near the 200 hour MA keeping the buyers in control. That MA comes in at 1.40756. Stay above is more bullish. Move below and the 100 hour MA at 1.40575 will be eyed (see post here).
The ECB will anounce its rate decision tomorow at 8:15 AM. No change is expected. Technically, the price is confined to a 120 pip trading range over the last month of trading which is one of the most narrow ranges for a month going back to the 1980s. The price is below the 100/200 hour MAs at 1.1422. Stya below is more bearish. Move above is more bullish (see post here).
The USDJPY dipped in the European session but stayed above the 100 hour MA at 162.64 (low for the day was at 162.80). The high from yesterday at 163.238 is not far away with the price at 163.14.
U.S. Treasury yields moved higher across the curve on Wednesday, reflecting another round of bond selling as investors demanded higher yields to own government debt. The move was led by the front end, but longer-term yields also climbed after the Treasury’s $13 billion 20-year bond auction drew sluggish demand, reinforcing concerns about investor appetite for the growing supply of U.S. debt.
End-of-day Treasury yields:
2-year: 4.3063% (+4.5 bps)
5-year: 4.4089% (+4.0 bps)
10-year: 4.6585% (+3.1 bps)
20-year: 5.1708% (+2.7 bps)
30-year: 5.1490% (+1.8 bps)
The relatively larger rise in shorter-dated yields suggests markets continue to price in a Federal Reserve that is likely to keep policy restrictive for longer, while the weaker 20-year auction highlighted lingering concerns over supply, fiscal deficits, and the willingness of investors to absorb increasing Treasury issuance without demanding higher yields. Despite the rise in long-end yields, the curve flattened modestly as shorter maturities underperformed.
U.S. stocks finished mixed to lower, with the major averages pulling back after recent gains as weakness in technology and small-cap shares outweighed broader market resilience. The Dow Jones Industrial Average was little changed, while the Nasdaq and Russell 2000 posted the largest declines.
Dow Jones Industrial Average:52,224.23 (-6.00, -0.01%)
S&P 500:7,498.97 (-10.24, -0.14%)
Nasdaq Composite:25,690.90 (-146.30, -0.57%)
Russell 2000:2,959.94 (-27.46, -0.92%)
The session reflected a cautious tone ahead of key after-hours earnings from Alphabet, Tesla, ServiceNow, IBM, and Texas Instruments, with investors trimming exposure in growth and small-cap stocks while the blue-chip Dow managed to finish essentially unchanged.
The biggest losers on Wednesday were concentrated in high-growth technology, AI, and momentum names, with investors taking profits ahead of a busy earnings slate and amid rising Treasury yields.
GE Vernova (GEV):-8.51% to $987.03Tencent ADR (TCEHY):-6.17% to $55.47Palantir (PLTR):-6.11% to $124.56Coinbase Global (COIN):-5.53% to $166.12DoorDash (DASH):-5.50% to $177.70Roblox (RBLX):-5.43% to $49.65Corning (GLW):-5.18% to $154.01Box (BOX):-4.98% to $28.45Zoom Video (ZM):-4.41% to $85.81Salesforce (CRM):-4.15% to $163.00
The biggest winners on Wednesday were led by AI infrastructure, industrial, defensive, and materials stocks, with Super Micro Computer posting the largest gain of the session.
Super Micro Computer (SMCI):+19.84% to $30.56Dell Technologies (DELL):+9.32% to $441.80Alcoa (AA):+4.08% to $46.16AT&T (T):+3.55% to $23.05CF Industries (CF):+3.55% to $127.33Deere & Company (DE):+3.52% to $607.54Newmont (NEM):+3.52% to $95.75Athena Global Technologies (ATHN):+3.39% to $57.00Philip Morris (PM):+3.38% to $194.27General Motors (GM):+3.28% to $82.13
The broad theme of the session was profit-taking in technology, AI, and other high-growth stocks, with higher Treasury yields weighing on valuation-sensitive sectors ahead of a major round of earnings reports from Alphabet, Tesla, ServiceNow, IBM, and Texas Instruments after the closing bell.
In other markets,
Crude oil is trading up $2.08 or 2.47% at $86.36Gold is trading up $53 or 1.3% at $4133Silver is trading up $0.87 or 1.5% at $59.63Bitcoin is trading down $500 and $65,879
This article was written by Greg Michalowski at investinglive.com.