A deepening sell-off gripped Wall Street midday Wednesday as crude oil spiked on a fresh U.S.-Iran escalation just hours before the Federal Reserve’s rate verdict, dragging the S&P 500 to four-week lows and knocking the Nasdaq 100 down more than 10% from prior records.
President Donald Trump threatened strikes against Iran in response to attacks on U.S. targets in Jordan. The threat landed alongside a new round of Treasury sanctions aimed at what officials called Iran’s Strait of Hormuz “monetization.”
That was enough to reignite the energy trade and drain risk appetite.
• State Street Energy Select Sector SPDR ETF shares are advancing steadily. Why is XLE stock trading higher?
West Texas Intermediate crude surged 6.7% to $84.58 a barrel, bringing its one-month gain to roughly 22%, while Brent jumped 7.4% to $90.27.
An outsized inventory draw amplified the oil move: EIA data showed U.S. crude stockpiles fell by 7.2 million barrels last week — against expectations for a build — leaving commercial inventories excluding the Strategic Petroleum Reserve at their lowest since September 2018.
The oil shock could hardly come at a worse time for the Fed, which wraps its two-day meeting at 2 p.m. ET. Markets overwhelmingly expect Chair Kevin Warsh to hold the funds rate at 3.50%-3.75%, but with inflation still running near 4% and several officials penciling in hikes this year, dissents are the wild card.
Polymarket puts 74% odds on no change and a 25% chance of a quarter-point hike.
The S&P 500 fell 1% to 7,358, a four-week low, while the Dow Jones shed 860 points, or 1.6%, to 51,887.
The Nasdaq 100 dropped 1.5% to 27,349 and is now off nearly 10% in July as the AI-capex rethink deepens.
Microsoft Corp. (NASDAQ:MSFT) and Meta Platforms Inc. (NASDAQ:META) slipped about 0.5% ahead of their after-the-bell reports.
The CBOE Volatility Index jumped nearly 10% to the 20 mark, reflecting hedging demand into the Fed announcement and tonight’s megacap earnings.
Wednesday’s Performance In Major U.S. Indices
| Index | Last | % Change |
|---|---|---|
| S&P 500 | 7,358 | -1% |
| Dow Jones | 51,887 | -1.6% |
| Nasdaq 100 | 27,349 | -1.5% |
| Russell 2000 | 2,913 | -1.4% |
According to the Benzinga Pro platform:
- The Vanguard S&P 500 ETF (NYSE:VOO) slipped 0.9%.
- The SPDR Dow Jones Industrial Average ETF Trust (NYSE:DIA) shed 1.6%.
- The Invesco QQQ Trust (NASDAQ:QQQ) dropped 1.5%.
- The iShares Russell 2000 ETF (NYSE:IWM) eased 1.4%.
Sector Movers
The Energy Select Sector SPDR Fund (NYSE:XLE) rallied 2.4%, extending its July advance to roughly 11% and pacing all sectors, while the Consumer Staples Select Sector SPDR Fund (NYSE:XLP) added 0.8% and the Health Care Select Sector SPDR Fund (NYSE:XLV) was down 0.2%.
At the other end, the Industrials Select Sector SPDR Fund (NYSE:XLI) tumbled 2.66% while the Technology Select Sector SPDR Fund (NYSE:XLK) and the Materials Select Sector SPDR Fund (NYSE:XLB) each lost 1.7%. XLK is now down nearly 12% in July.
Among industry funds, the Invesco WilderHill Clean Energy ETF (NYSE:PBW) slumped 3.3%, deepening a brutal 23% monthly slide.
Earnings Movers
Earnings drove the single-stock tape. Manhattan Associates, Inc. (NASDAQ:MANH) exploded 27.1% higher after Tuesday evening’s blowout print: second-quarter EPS of $1.39 topped the $1.32 consensus on revenue of $297.8 million versus $287.8 million expected.
Garmin Ltd. (NYSE:GRMN) surged 17.3% after smashing estimates this morning with EPS of $2.81 versus $2.30 and revenue of $2.02 billion against $1.94 billion, while ExlService Holdings, Inc. (NASDAQ:EXLS) climbed 16.3% on a double beat of its own: EPS of 59 cents versus 55 cents on revenue of $594.8 million versus $568.4 million.
Lithia Motors, Inc. (NYSE:LAD) jumped 16.3% after crushing the consensus with $10.03 in quarterly EPS versus $8.71 expected, and Avantor, Inc. (NYSE:AVTR) rallied 12.9% after topping estimates with adjusted EPS of 21 cents on $1.69 billion in revenue and raising full-year organic growth and profit guidance.
The software and IT-services glow spread wide: Cognizant Technology Solutions Corp. (NASDAQ:CTSH) gained 11.2%. Morning beats also lifted Automatic Data Processing Inc. (NASDAQ:ADP), up 5.5% after EPS of $2.64 beat the $2.59 estimate, and Amphenol Corp. (NYSE:APH), up 5.5% on EPS of $1.35 versus $1.16.
Mondelez International Inc. (NASDAQ:MDLZ) rose 4.9% on last night’s beat, and Visa Inc. (NYSE:V) rebounded 1% after posting quarterly revenue growth.
The losers’ column was uglier. Parsons Corp. (NYSE:PSN) cratered 35.1% after flat second-quarter revenue of $1.58 billion missed estimates, the company swung to a $15 million net loss on roughly $118 million of contract and joint-venture charges, and management slashed full-year adjusted EBITDA guidance to $500 million-$560 million from $615 million-$675 million.
Lennox International Inc. (NYSE:LII) plunged 20.5% after quarterly revenue of $1.5 billion missed the $1.55 billion consensus despite an EPS beat. Peer Watsco, Inc. (NYSE:WSO) shed 16% after posting $4 per share against a $4.39 estimate as operating margin compressed to 11.3% from 13.2%, and fellow HVAC name AAON, Inc. (NASDAQ:AAON) dropped 8%.
V.F. Corp. (NYSE:VFC) slid 18.1% after posting a wider-than-expected quarterly loss of 27 cents per share versus a 22-cent loss consensus.
Vertiv Holdings Co (NYSE:VRT) dropped 14.8% despite beating on EPS at $1.52 versus $1.42 and raising full-year guidance, as second-quarter revenue of $3.27 billion missed the $3.38 billion consensus and management blamed “minor timing shifts” tied to supply-chain congestion on large data-center deployments, feeding the AI-capex angst that also hit chip equipment.
On that front, KLA Corp. (NASDAQ:KLAC) sank 8.5% in the fallout from SK Hynix Inc. (NASDAQ:SKHY)‘s downbeat report, which triggered a record rout in Seoul, with Micron Technology Inc. (NASDAQ:MU), Applied Materials Inc. (NASDAQ:AMAT) and Sandisk Corp. (NASDAQ:SNDK) down between 4% and 8%. Intel Corp. (NASDAQ:INTC) lost 3.5%.
Wednesday’s Russell 1000 Top Gainers
| Name | % change |
|---|---|
| Manhattan Associates, Inc. | +27.06% |
| Garmin Ltd. | +17.28% |
| ExlService Holdings, Inc. | +16.32% |
| Lithia Motors, Inc. | +16.29% |
| Avantor, Inc. | +12.88% |
Wednesday’s Russell 1000 Top Losers
| Name | % change |
|---|---|
| Parsons Corp. | -35.12% |
| Lennox International Inc. | -20.49% |
| V.F. Corp. | -18.10% |
| Watsco, Inc. | -15.98% |
| Vertiv Holdings Co | -14.80% |
