International oil prices declined for a fifth consecutive trading day. On Tuesday (22nd), the three major U.S. stock indexes closed mixed as a drop in crude eased some concerns that energy costs would fuel inflation, while a surge in memory chip stocks propelled the Nasdaq Composite to a second straight record close; bank share losses weighed on the Dow.
The Dow Jones Industrial Average fell 185.14 points, or 0.36%, to 51,863.69. The Nasdaq Composite rose 122.19 points, or 0.45%, to 27,244.28. The S&P 500 slipped 0.06 points to 7,764.64, essentially flat.
Notable Stock Movements
Large-cap technology stocks were mixed. Tesla gained 0.96%, Nvidia rose 0.66%, and Apple added 0.23%. Meanwhile, Meta fell 0.63%, Microsoft dropped 0.72%, Alphabet slipped 0.99%, and Amazon declined 1.34%.
The semiconductor sector strengthened, with the Philadelphia Semiconductor Index advancing 2.06%. Memory and hard drive supply chain names stood out: SanDisk jumped 6.82%, Micron Technology climbed 5.00%, Seagate Technology rose 4.85%, and Western Digital gained 3.67%. Rosenblatt Securities initiated coverage on SanDisk with a "Buy" rating and a $2,400 price target, further boosting expectations for memory demand driven by artificial intelligence infrastructure. Other chip stocks mostly rose, with Marvell Technology up 1.93%, Intel up 1.71%, TSMC ADR up 1.54%, AMD up 1.34%, and Broadcom up 0.52%. Optical communication stocks diverged, with Lumentum down 0.92% and Coherent down 3.46%.
The financial sector was the main drag of the day. The S&P 500 financials sector fell 1.68%, and the bank index dropped about 3%. JPMorgan Chase declined 3.42%, Bank of America fell 3.04%, Citigroup slipped 1.91%, and Goldman Sachs lost 1.03%. As short-term Treasury yields fell more than longer-term yields, the spread between 2-year and 10-year yields narrowed to about 18 basis points at one point, the smallest gap since March 2025. The flatter yield curve raised concerns over bank net interest margins.
Energy stocks weakened alongside oil prices. ConocoPhillips fell 1.77%, Chevron dropped 0.62%, while Exxon Mobil bucked the trend with a 0.26% gain.
Among Dow components, Walmart rose 2.49%, while UnitedHealth fell 1.22%.
Chinese stocks listed in the U.S. mostly advanced, with the Nasdaq Golden Dragon China Index up 18.67 points, or 0.32%, to 5,846.90. Pinduoduo rose 1.33%, NetEase gained 1.10%, Bilibili added 0.72%, Trip.com rose 0.49%, Alibaba climbed 0.48%, JD.com gained 0.37%, and Baidu rose 0.24%. Among Chinese EV makers, NIO gained 1.36%, Li Auto rose 1.22%, and XPeng added 0.10%.
Market Overview
Sector rotation continued on Tuesday. An intraday slide in oil prices pulled short-term Treasury yields lower, reducing pressure on growth stock valuations from high energy costs and potential further rate hikes. Capital continued to flow into AI hardware and memory chip sectors, pushing both the Nasdaq and the Nasdaq-100 to fresh record highs. Meanwhile, declines in banking and energy shares weighed on the Dow.
The Nasdaq-100 rose 0.82% to 30,732.40, also a record close, while the Russell 2000 gained 0.51% to 2,889.92. The Cboe Volatility Index fell 4.44% to 14.21. Within the S&P 500's 11 major sectors, five advanced and six declined, with materials leading and financials and communication services lagging.
Richmond Fed President Tom Barkin said in Baltimore that the U.S. economy is "strengthening if anything," citing resilient consumer spending and momentum extending beyond AI and data centers. He noted robust demand in the defense industry, growing optimism among manufacturers, and a healthy banking pipeline. Barkin believes inflation risks currently outweigh risks to full employment, which was a reason for the Fed's rate hike last week. He pointed out that shocks once seen as temporary, such as energy and tariffs, have not faded quickly, making price pressures more persistent. He added that a significant portion of the PCE price index still shows year-over-year increases above 3%. Asked whether more rate hikes are needed and how many, Barkin said "we'll see."
Interest rate futures markets show traders pricing in roughly a 53% probability of at least a 25-basis-point hike at the Fed's October meeting. Market focus is shifting from last week's rate decision itself to energy prices, upcoming inflation data, and Fed officials' stance on further tightening.
In the bond market, the Treasury's daily constant maturity yield curve showed the 2-year yield at 4.71%, down 5 basis points from the prior session, while the 10-year yield stood at 4.96% and the 30-year at 5.29%, both unchanged. With short-end yields falling and longer-end stable, the yield curve flattened further.
On geopolitics, U.S. President Donald Trump confirmed on Tuesday that U.S. and Iranian officials held a three-hour meeting in New York and plan to meet again soon. Speaking to media during a meeting with Ukrainian President Volodymyr Zelensky on the sidelines of the UN General Assembly, Trump described the U.S.-Iran talks as "very good" and "productive," with another session planned shortly. He did not disclose details or a timeline for the next meeting.
On the economic data front, the Richmond Fed's September manufacturing survey showed its composite index fell to -2 from 4 in August, slipping back into contraction territory. The shipments index dropped to -5 from 11, new orders fell to -6 from 3, while employment improved to 7 from -2. The survey also indicated manufacturers' assessment of current conditions weakened, with the local business conditions index falling to -6 from 4. Expectations for business conditions over the next six months slipped to 10 from 16, and expectations for future employment declined to 8 from 20. Prices paid by businesses accelerated notably, while prices received rose only modestly, suggesting stronger input cost pressures.
Commodities Performance
International oil prices fell for a fifth straight session, marking the longest losing streak in over a year. WTI crude futures settled at $94.59 per barrel, down 1.24%. Brent crude futures closed at $99.25 per barrel, down 1.09%, finishing below $100 for the first time since September 8. COMEX gold futures traded around $4,400.80 per ounce, while silver futures were near $67.83 per ounce.
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