Article published at 9:05 a.m. CT
JJ Kinahan is Senior Vice President, Head of Retail Expansion and Alternative Investment Products at Cboe Global Markets, Inc. (Cboe).
Key Takeaways:
- Inflation fears and profit taking hit indices
- Treasury yields head higher as bond prices drop
- Home Depot earnings rise as smaller projects take precedence
It looks like it’s three-for-three today as investors hit the brakes amid a worldwide selloff of U.S. government bonds, a spike in crude oil prices and escalating tensions in the Middle East for the third straight session.
The three major indices are in the red in early trading with the Nasdaq Composite dropping. 1.26%, the S&P 500 Index declining 0.54% and the Dow Jones Industrial Average is giving back 0.12%. While indices are trending lower — and some individual stocks are taking it on the chin — they are coming off record highs as investors look to take profits.
Treasury yields are ticking up again in early trading, with the 30-year heading toward a level it hasn’t touched in almost 20 years as bond prices drop. The 30-year yield is standing at 5.32% while the 10-year is reaching 4.74%, which it hasn’t touched since January 2025. Crude oil prices, which have bobbed since the start of the war in Iran six months ago, are climbing higher again today. Brent crude prices are over $91 a barrel, up 0.37%, and WTI Crude is over $85 a barrel, up 0.84%, stoking inflation fears as tensions in the Middle East escalate.
Today’s fall comes after Monday’s pullback in which the S&P 500 gave back 0.52% and the Nasdaq subtracted 0.32% while the Dow gave up 0.51%. In today’s trading, data storage and chips stocks are getting cuffed as investors take profits. Western Digital is down 6.4%, Marvell is falling 6.3%, SanDisk by 5.5%, Advanced Micro Devices by 3.5% and Intel by 4.5%.
On a brighter side, homeowners and professionals are still nailing it with small construction projects, helping Home Depot turn out second-quarter earnings that beat Wall Street’s profits and sales expectations. Shares are moving higher after the company told CNBC it continues to see spending in what it called a “frozen housing market.” However, consumers said they had the money to spend on bigger projects but haven’t because they are fearful of inflation, fuel costs and “general uncertainty.”
Lowe’s, which reports earnings before Wednesday’s bell, is also getting in on the action, advancing 1.7%.
Baidu shares are giving up 9% in early trading after the China-based internet giant reported a white-knuckled 68% drop in profits and a 4.2% pullback in sales. Baidu is in the midst of a major transition into an artificial intelligence (AI) firm by pouring capital into investments that have yet to show solid results. The stock is down more than 48% year-to-date.
Speaking of AI, Fabrinet turned in earnings and sales that outpaced Wall Street’s expectations and offered good guidance that apparently wasn’t good enough for some investors. Shares of the maker of high-tech components and cables inside AI data centers are 12.3% lower in early trading.
Happy Trading!
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