U.S. stocks closed sharply lower on Wednesday as Treasury yields spiked on worries that U.S. government debt would swell by trillions of dollars if Congress passes President Donald Trump's proposed tax-cut bill. 20-year treasury auction goes badly, yields spike as bonds sell off.
Market Snapshot
The Dow Jones Industrial Average fell 816.8 points, or 1.91%, to 41,860.44, the S&P 500 lost 1.61 points, or 1.61%, to 5,844.61 and the Nasdaq Composite lost 270.07 points, or 1.41%, to 18,872.64.
Market Movers
Tesla fell 2.7%. CEO Elon Musk on Tuesday indicated he was committed to the electric-vehicle company. The chief executive told a conference in Qatar that he expects to be CEO in five years, and also said he would step back from political spending. Musk also told CNBC in an interview that Tesla was on track for a June launch of robotaxi service in Austin, Texas, adding the rollout would be slow.
Nvidia was down 1.9%. CEO Jensen Huang again slammed U.S. curbs on the chip maker's exports to China. Huang said Wednesday at a news conference in Taiwan that U.S. measures designed to stop China from getting its hands on Nvidia's artificial-intelligence chips had been "a failure," according to reports.
Wolfspeed sank 59% to $1.28 after The Wall Street Journal reported the chip-component maker was getting ready to file for bankruptcy in the next few weeks amid struggles with its debt levels. The Journal, citing sources familiar with the matter, said Wolfspeed was aiming to work out a Chapter 11 plan that has support of a majority of its creditors.
Target fell 5.2% as the retailer's first-quarter adjusted earnings missed analysts' estimates and revenue fell 2.8% year over year to $23.8 billion for the quarter ended May 3. For the fiscal year ending in January, the company expects a low-single digit decline in sales. Past guidance called for sales to grow around 1% for the year.
UnitedHealth declined 5.7% to $302.92. Shares of the health insurance giant were downgraded to Reduce from Hold by analysts at HSBC and the price target was cut to $270 from $490. The stock declined sharply last week after UnitedHealth CEO Andrew Witty resigned and the company suspended its 2025 outlook. The Wall Street Journal also reported the company was being investigated by the Justice Department for possible criminal Medicare fraud.
Alphabet was up 2.8%. The company's Google unit, at its developers conference Tuesday, issued updates around artificial intelligence and how it plans to solidify its place in search. But many of the AI products announced by Alphabet won't come for a few months. Google's headline announcement was the implementation of artificial intelligence into search in what it is calling "AI Mode." Alphabet CEO Sundar Pichai said it was a "total reimagining of search."
Lowe's fell 1.7% after posting first-quarter earnings that topped analysts' estimates. The company maintained its fiscal-year outlook but CEO Marvin Ellison flagged "near-term uncertainty and housing market headwinds."
Fair Isaac, the credit analytics company, dropped 16% after a Trump-appointed official expressed his disappointment with the company's decision to raise wholesale royalty fee for credit scores.
VF Corp sank 16% after fiscal fourth-quarter revenue fell from a year earlier and missed analysts' estimates, and the owner of brands Timberland and The North Face said it expects first-quarter revenue to decline between 3% and 5%.
Palo Alto Networks reported fiscal third-quarter adjusted earnings and revenue that topped analysts' estimates and raised fiscal 2025 profit expectations. Shares of the cybersecurity company were down 6.8%, however, after Palo Alto Network's revenue outlook for the fourth quarter missed estimates.
Take-Two Interactive Software fell 4.5% after the videogame maker proposed an offering for $1 billion common shares.
U.S.-listed shares of Baidu fell 4.3%. The Chinese tech company's growing artificial-intelligence business helped it top analysts' first-quarter earnings estimates.
XPeng jumped 13% in U.S. trading after its first-quarter loss narrowed and revenue in the period more than doubled to 15.81 billion yuan. The company said it expects to deliver 102,000 to 108,000 vehicles in the second quarter.
Market News
Trump Says He's Seriously Considering Taking Fannie Mae and Freddie Mac Public
U.S. President Donald Trump said on Wednesday he will make a decision in the near future about taking Fannie Mae and Freddie Mac public, a move which he said he is giving "very serious consideration."
In a post on Truth Social, Trump said he will speak with Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick and Federal Housing Finance Director William Pulte about doing so.
Bitcoin Jumps to $110,107 and Hits a New Record High
Bitcoin hit an all-time high after the advancement of stablecoin legislation in the US stoked hopes of regulatory clarity under President Donald Trump.
The largest cryptocurrency climbed to a record $110,107. The previous high was set at roughly the time of Trump’s inauguration on Jan. 20.
Bitcoin and the broader crypto market have rallied in recent weeks thanks to regulatory tailwinds including the stablecoin bill advancing in the US Senate after a group of Democrats dropped their opposition Monday. The industry-backed regulatory bill is now set for debate on the Senate floor with a bipartisan group hoping to pass it as soon as this week.
