S&P 500 And Nasdaq 100 Slip From Record Highs Amid Pressure From Soaring Treasury Yields — SPCX, AMD, NVDA, MRVL In Focus

• The S&P 500 ended Wednesday 0.2% lower, the Nasdaq 100 fell 0.2%, and the Dow Jones Industrial Average slipped 0.7%.
• 10-year Treasury yields hit their highest level since April 2002.
• SpaceX is in talks with banks and investors to raise $40 billion to buy chips from Nvidia, FT reported.

U.S. stock indices ended lower on Wednesday after Treasury yields jumped to levels last seen two decades ago.

The S&P 500 ended Wednesday 0.2% lower, the Nasdaq 100 fell 0.2%, and the Dow Jones Industrial Average slipped 0.7%. The Russell 2000, which tracks small-cap stocks, lost about 1%.

The SPDR S&P 500 ETF (SPY) slipped 0.2%, the SPDR Dow Jones Industrial Average ETF (DIA) eased 0.7%, and the Nasdaq-100 tracking Invesco QQQ Trust (QQQ) fell 0.2%. 

Meanwhile, the VanEck Semiconductor ETF (SMH) and the iShares Semiconductor ETF (SOXX) dropped 1% each, tracking weakness in Nvidia (NVDA) and Advanced Micro Devices (AMD). The broader Vanguard Information Technology ETF (VGT) fell 0.2%.

Retail sentiment on Stocktwits for QQQ, SPY, and DIA was ‘bullish’ with ‘high’ message volumes.

US Market Drivers

Market participants grew anxious as the key 10-year Treasury yield spiked to 5.365% on Wednesday, its highest mark since April 2002. Meanwhile, the 30-year bond yield surged to 5.732%, touching its peak since May 2002.

However, ten-year yields pulled back from session highs following a solid $39 billion auction of 10-year Treasury notes, allowing equities to pare some losses.

“Investors are finding value at these higher rates compared to historical norms over the past two decades, though broader macro dynamics remain at play,” Bill Merz, capital markets research lead at U.S. Bank Asset Management, told CNBC, describing the auction outcome as solid.

Elsewhere, Federal Reserve officials expect another hike may be necessary before the year ends, according to meeting minutes released Wednesday, after unanimously voting to raise interest rates at their September meeting.

“Another rate hike is probably coming this year because current policy isn’t very restrictive,” David Russell at TradeStation told Bloomberg. “With inflation above target and most measures of economic activity strong, price stability is the Fed’s dominant mandate.” 

Key Trending Stocks

SpaceX (SPCX) is in talks with banks and investors to raise $40 billion to buy chips from Nvidia Corp., people familiar with the matter told FT.

Advanced Micro Devices Inc. (AMD) CEO Lisa Su traveled to South Korea on Wednesday to reinforce semiconductor supply chain partnerships and broaden the company’s artificial intelligence hardware and software footprint in the region, according to South Korean news outlet The Chosun Daily. 

Veteran tech analyst Dan Ives predicts a $4 trillion artificial intelligence spending boom is just beginning, naming Nvidia, Microsoft, Palantir, Apple, and CrowdStrike among his top equity picks. 

Investment firm D.A. Davidson has significantly raised its price target on Micron Technology Inc. (MU) to $3,000 per share, up 43% from its previous target of $2,100, while maintaining a ‘Buy’ rating. 

Marvell CEO Matt Murphy remained upbeat after the company’s Investor Day, stating that its custom chip goal for 2031 needs only a small slice of the market.  

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