Stocks Pressured by Rising Crude Prices and Chipmaker Weakness

The S&P 500 Index ($SPX) (SPY) is down by -0.07% today, the Dow Jones Industrial Average ($DOWI) (DIA) is up by +0.42%, and the Nasdaq 100 Index ($IUXX) (QQQ) is down -0.69%.  December E-mini S&P futures (ESZ26) are down -0.05%, and December E-mini Nasdaq futures (NQZ26) are down -0.65%.

Stock indexes are mixed today, with the Dow Jones Industrials posting a 2.5-week high.  The broader market is under pressure from higher crude oil prices, with WTI crude up more than +2% today on concerns about escalating tensions in the Middle East after repeated Houthi attacks on Saudi Arabia from neighboring Yemen.  Weakness in chipmakers and AI-infrastructure stocks is also weighing on the overall market today. 

Stocks have support from the prospect of solid quarterly earnings results that will begin this week.  Goldman Sachs today raised its three-month view on global equity markets to overweight from neutral, saying. “Earnings growth remains supportive for equities and the recent valuation de-rating has improved asymmetry into the third-quarter earnings season.”  Also, strength in software stocks and energy producers is supportive of the overall market.

Market activity may be below normal, as the cash Treasury market is closed today for the Columbus Day bank holiday. 

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 this week when US money center banks report. 

Nov WTI crude oil prices (CLX26) are up more than +2% today after Iran-backed Houthi rebels in Yemen launched drone and missile attacks against Saudi Arabia over the weekend, raising the risk of escalation that could draw the US into the conflict.  Also, there's been a recent escalation of drone and missile attacks against vessels traversing the Strait of Hormuz, limiting energy exports from the region.  Limiting gains in crude are the prospects of Russia releasing diesel supplies into the global market after the US Treasury issued a waiver for previously sanctioned Russian fuel.  Last Friday, Russia said it will partially lift its ban on diesel exports, allowing 500,000 MT of diesel fuel to reach international markets following an agreement between Russian President Putin and US President Trump. 

Markets are discounting a 19% chance of a +25 bp Fed rate hike at the next FOMC meeting on October 27-28.

Overseas stock markets are mixed today.  The Euro Stoxx 50 is up +0.44%.  China's Shanghai Composite closed down -0.43%.  Japan's Nikkei-225 Stock Average did not trade, as Japanese markets were closed today for the Health Sports Day holiday.

Interest Rates

December 10-year T-notes (ZNZ6) are down by -2.5 ticks today.  The 10-year T-note yield is not trading today, as the cash Treasury market is closed for the Columbus Day bank holiday.  Dec T-notes are under pressure today as higher crude oil prices raise inflation expectations.

European government bond yields are mixed today.  The 10-year German bund yield is down -0.5 bp to 3.476%. The 10-year UK gilt yield is up +0.1 bp to 5.444%.

ECB Governing Council member Yannis Stournaras said the ECB may raise interest rates again to curb inflation but without rushing any action, suggesting an ECB rate hike this month is less likely than one in December. 

Markets are discounting a 13% chance of a +25 bp ECB rate hike at the ECB’s next meeting on October 29.

US Stock Movers

Chipmakers and AI-infrastructure stocks are sliding today, weighing on the overall market.  Lumentum Holdings (LITE) is down more than -7% to lead losers in the S&P 50 and Nasdaq 100, and Sandisk (SNDK) is down more than -6%.  Also, Micron Technology (MU) and Marvell Technology (MRVL) are down more than -4%, and Advanced Micro Devices (AMD), ARM Holdings (ARM), Intel (INTC), and Seagate Technology Holdings Plc (STX) are down more than 3-%.  In addition, Lam Research (LRCX), KLA Corp (KLAC), Microchip Technology (MCHP), and Western Digital (WDC) are down more than -2%, and Applied Materials (AMAT), Broadcom (AVGO), and Qualcomm (QCOM) are down more than -1%.

Software stocks are climbing today, led by a +2% jump in Salesforce (CRM) to lead gainers in the Dow Jones Industrials after Bank of America Global Research double-upgraded the stock to buy from underperform with a price target of $285.  Also, Workday (WDAY) is up more than +2%, and ServiceNow (NOW), Intuit (INTU), and Microsoft (MSFT) are up more than +1%.

Energy producers and service providers are moving higher today, with WTI crude oil up more than +2%.  Diamondback Energy (FANG) is up more than +2%, and APA Corp (APA), Chevron (CVX), ConocoPhillips (COP), Devon Energy (DVN), ExxonMobil Holdings (XOM), and Occidental Petroleum (OXY) are up more than +1%. 

IonQ (IONQ) is down more than -8% after agreeing to buy Elisity Inc. for as much as $1.3 billion in an all-stock transaction.

Chipotle Mexican Grill (CMG) is down more than -4% after Starbucks said it has no plans to acquire the company.

Enact Holdings (ACT) is down more than -1% after JPMorgan Chase downgraded the stock to underweight from neutral with a price target of $44.

Adobe (ADBE) is down more than -1% after Wells Fargo Securities double-downgraded the stock to underweight from overweight with a price target of $225. 

First Tracks Biotherapeutics (TRAX) is up more than +6% after reporting topline results from an early-stage trial of its experimental therapy for celiac disease.

AST SpaceMobile (ASTS) is up more than +4% after Deutsche Bank upgraded the stock to buy from hold with a price target of $93. 

Biogen (BIIB) is up more than +3% after JPMorgan Chase upgraded the stock to overweight from neutral, with a price target of $300.

Earnings Reports (10/12/2026)

Liberty Live Holdings Inc (LLYVA) and SR Bancorp Inc (SRBK).

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.