The S&P 500 Index ($SPX) (SPY) is down by -0.61% today, the Dow Jones Industrial Average ($DOWI) (DIA) is down by -0.93%, and the Nasdaq 100 Index ($IUXX) (QQQ) is down -0.92%. December E-mini S&P futures (ESZ26) are down -0.55%, and December E-mini Nasdaq futures (NQZ26) are down -0.85%.
Stock indexes are under pressure today as rising crude oil prices push bond yields higher. WTI crude oil is up nearly +1% today as escalating attacks on oil tankers in the Middle East bolster concerns that oil supplies from the region could be disrupted. The increase in crude prices is pushing inflation expectations and bond yields higher, with the 10-year T-note yield up +9 bp to 5.36%.
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US MBA mortgage applications fell -4.2% in the week ended October 2, with the purchase mortgage sub-index down -2.1% and the refinancing mortgage sub-index down -7.5%. The average 30-year fixed-rate mortgage rose +19 bp to a 2.75-year high of 7.49% from 7.30% the prior week.
Earnings optimism is a bullish factor for stock prices. According to data compiled by Bloomberg Intelligence, Q3 S&P 500 profits are expected to climb by +25% from a year earlier, up from a July estimate of 22%. Q3 earnings season begins next week when US money center banks report.
Nov WTI crude oil prices (CLX26) are up nearly +1% today on an increase in attacks on tankers attempting to transit the Strait of Hormuz. The UK’s Maritime Trade Operations reported on Tuesday that the pace of attacks by Iran has increased in recent days, with nine vessels targeted over the last several days. On Tuesday, crude prices fell to a 1-month low on signs that more oil supplies are coming out of the Middle East. Shell Plc said oil flows out of Hormuz have increased to about 80% of prewar levels.
Markets are discounting a 22% chance of a +25 bp Fed rate hike at the next FOMC meeting on October 27-28.
Overseas stock markets are lower today. The Euro Stoxx 50 tumbled to a 3.75-month low and is down -1.63%. China's Shanghai Composite did not trade, with markets in China closed for the week-long Golden Week holidays. Japan's Nikkei-225 Stock Average closed down -0.92%.
Interest Rates
December 10-year T-notes (ZNZ6) are down -14 ticks today. The 10-year T-note yield climbed to a new 24-year high today at 5.362% and is up +7.7 bp to 5.356%. T-notes are under pressure today as higher crude oil prices raise inflation expectations. The 10-year breakeven inflation rate rose to a 3-week high of 2.389% today. Supply pressures are also weighing on T-notes as the Treasury will auction $39 billion of re-opened 10-year T-notes later today.
European government bond yields are moving higher today. The 10-year German bund yield is up +4.7 bp to 3.526%. The 10-year UK gilt yield is up +11.5 bp to 5.490%.
German Aug industrial production rose +2.0% m/m, stronger than expectations of +0.5% m/m and the largest increase in 17 months.
Markets are discounting a 14% chance of a +25 bp ECB rate hike at the ECB’s next meeting on October 29.
US Stock Movers
Weakness in chipmakers and AI stocks today is weighing on the broader market. Lam Research (LRCX). Western Digital (WDC), and Micron Technology (MU) are down more than -3%, and Marvell Technology (MRVL), NXP Semiconductors NV (NXPI), Seagate Technology Holdings Plc (STX), Applied Materials (AMAT), KLA Corp (KLAC), Analog Devices (ADI), ASML Holding NV (ASML), and Texas Instruments (TXN) are down more than -2%.
Cryptocurrency-exposed stocks are under pressure today, with Bitcoin (^BTCUSD) down more than -2%. Strategy (MSTR), Galaxy Digital Holdings (GLXY), Circle Internet Group (CRCL), and BitMine Immersion Technologies (BMNR) are down more than 5%. Also, Bullish (BLSH) and MARA Holdings (MARA) are down more than -4%, and Robinhood Markets (HOOD), Coinbase Global (COIN), Riot Platforms (RIOT), and Iren Ltd (IREN) are down more than -3%.
Home builders and building suppliers are falling today after the 10-year T-note yield rose to a new 24-year high, boosting mortgage rates and weighing on housing demand. Builders Firstsource (BLDR) is down more than -4%, and DR Horton (DHI), Lennar (LEN), Pulte Group (PHM), KB Home (KBH), and Toll Brothers (TOL) are down more than -2%.
Defensive pharmaceutical stocks are moving higher today with the decline in the broader market. Gilead Sciences (GILD) is up more than +2% to lead gainers in the Nasdaq 100. Also, Amgen (AMGN) and Eli Lilly (LLY) are up more than +2%. In addition, Biogen (BIIB), Pfizer (PFE), Alnylam Pharmaceuticals (ALNY), and Vertex Pharmaceuticals (VRTX) are up more than +1%.
Mohawk Industries (MHK) is down more than -4% after RBC Capital Markets downgraded the stock to underperform from sector perform with a price target of $112..
SpaceX (SPCX) is down more than -1% as the company is in talks with banks and investors to raise $40 billion to buy chips from Nvidia.
Penguin Solutions (PENG) is up more than +16% after reporting Q4 net sales of $566.7 million, well above the consensus of $519.9 million.
Earnings Reports (10/7/2026)
Applied Digital Corp (APLD), Richardson Electronics Ltd/Uni (RELL), ZenaTech Inc (ZENA).
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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