Dow Sheds Nearly 600 Points as 10-Year Yield Hits 24-Year High

Dow Sheds Nearly 600 Points as 10-Year Yield Hits 24-Year High

All three indexes retreat

The 10-year yield breaks 5.36%

The AI rally cools, chips lead the fall

Tech stocks that hit records Tuesday on AI optimism became Wednesday's casualties. Semiconductors led the decline: the VanEck Semiconductor ETF (SMH) gapped down 1.5%; Seagate (STX) fell over 1% more after Tuesday's 9% plunge, and Western Digital (WDC) dropped nearly 2%, breaking below its 200-day moving average, on fears that Toshiba's expansion will squeeze memory-chip pricing power. Premarket, Micron was down 2.2% and Marvell 1.2%. Frank Cappelleri of CappThesis noted the S&P was overbought after four straight up days in October — and that only 24 constituents hit 52-week highs when the index set its Tuesday record, "a warning signal." SpaceX fell 2.1% premarket (the FT says it is seeking $40 billion in financing to buy Nvidia chips); Intel rose 1.3% (Reuters).

Oil above $100 stokes inflation fears

Houthi missile and drone strikes on Saudi military facilities and airports pushed Brent crude up 1.3% to $101.88, with WTI up about 0.5% to roughly $90. Energy-supply worries on top of elevated borrowing costs are lifting inflation expectations again. Bitcoin also fell to about $83,000, after approaching $87,000 earlier in the week.

All eyes on the 2 p.m. Fed minutes

Two events dominate the rest of the day: the results of today's $39 billion 10-year Treasury auction at 1 p.m. ET, and the Federal Reserve's September meeting minutes at 2 p.m. ET — markets are hunting for officials' stance on inflation and the path of future rate moves. CME FedWatch shows about a 19% chance of a hike at the late-October meeting versus 78% for no change, but an 83% chance of at least a 25-basis-point hike in December. Third-quarter earnings season kicks off next week, with several banks reporting first.