U.S. equities clawed back ground Wednesday, with the S&P 500 up 0.5% as a fresh wave of artificial intelligence dealmaking offset an ugly session for high-multiple software and cybersecurity stocks.
The S&P 500 rose 0.5% to 7,668.79, while the Dow Jones Industrial Average advanced 235 points, or 0.4%, to 53,002.29. The Nasdaq 100 fell 0.2% to 29,012.77.
• Credo Technology Group shares are sliding. Why is CRDO stock falling?
Within Magnificent Seven stocks, NVIDIA Corp. (NASDAQ:NVDA) surged 4.7% to $227.66 on reports it is in advanced talks to acquire Hugging Face for $14 billion.
Rate-hike expectations remain the dominant macro story and the direct cause of the growth-stock carnage.
Futures are pricing a roughly 66% probability that the Federal Reserve raises rates by 25 basis points later this month, up sharply from about 40% a week ago, after Fed Chair Kevin Warsh used his Jackson Hole address to recommit to fighting inflation.
Wednesday’s data cut the other way: ADP showed private payrolls rose just 38,000 in August, the weakest since January and below the 47,000 consensus, while July factory orders climbed 0.9% versus the 0.6% expected.
On the geopolitical front, the U.S. said it launched overnight airstrikes on Iranian targets, Tehran retaliated, and reports of hits on tankers near the strait kept a war premium embedded in crude.
West Texas Intermediate crude rose 0.6% to $90.78 a barrel, holding near six-week highs. Brent added 1.0% to $95.55.
The bond market took a breather without giving much back. The 10-year Treasury yield held at 4.81% after a five-session run to its highest level since October 2023, while the 5-year sat at 4.56%.
Gold rebounded 1.0% to $4,372.53 an ounce, recovering from a one-month low as the dollar retreated, though the metal remains down 4.9% over the past week.
Markets now await Broadcom Inc. (NASDAQ:AVGO)‘s quarterly results after the bell.
Wednesday’s Performance In Major U.S. Indices
| Index | Last | % Change | MTD | YTD |
|---|---|---|---|---|
| S&P 500 | 7,668.79 | +0.5% | -0.2% | +12.2% |
| Dow Jones | 53,002.29 | +0.4% | -0.3% | +10.3% |
| Nasdaq 100 | 29,012.77 | -0.2% | -1.5% | +15.4% |
| Russell 2000 | 2,946.78 | +0.9% | -0.2% | +19.0% |
According to the Benzinga Pro platform:
- The Vanguard S&P 500 ETF (NYSE:VOO) gained 0.5%.
- The SPDR Dow Jones Industrial Average ETF Trust (NYSE:DIA) rose 0.4%.
- The Invesco QQQ Trust (NASDAQ:QQQ) slipped 0.2%.
- The iShares Russell 2000 ETF (NYSE:IWM) rallied 0.9%.
Beat The Number, Lose The Multiple: Software Punished Anyway
The Materials Select Sector SPDR Fund (NYSE:XLB) was the best performer, up 1.9%, ahead of the Communication Services Select Sector SPDR Fund (NYSE:XLC), up 1.7%.
The Consumer Staples Select Sector SPDR Fund (NYSE:XLP) added 0.9%, the Financial Select Sector SPDR Fund (NYSE:XLF) rose 0.8% as a steeper curve lifted bank margins, and the Health Care Select Sector SPDR Fund (NYSE:XLV) gained 0.7%.
Three sectors sat in the red.
The Real Estate Select Sector SPDR Fund (NYSE:XLRE) fell 0.5%, while the Technology Select Sector SPDR Fund (NYSE:XLK) and the Utilities Select Sector SPDR Fund (NYSE:XLU) each slipped 0.2%.
The Energy Select Sector SPDR Fund (NYSE:XLE) rose 0.3% and remains the runaway 2026 leader, up 47.3% year-to-date against XLK’s 27.7%.
At the industry level, the VanEck Gold Miners ETF (NYSE:GDX) led with a 2.4% advance as bullion bounced.
The U.S. Global Jets ETF (NYSE:JETS) climbed 1.5% and the VanEck Agribusiness ETF (NYSE:MOO) rose 1.5%, while the SPDR S&P Insurance ETF (NYSE:KIE) gained 1.2%. On the losing side, the First Trust Dow Jones Internet Index Fund (NASDAQ:FDN) fell 0.3%.
Credo Technology Group Holding Ltd (NASDAQ:CRDO) was the session’s worst performer, collapsing 18.7% to $168.09 in its first full session after Tuesday’s print.
The AI connectivity supplier posted record fiscal first-quarter revenue and net income on strength in active electrical cables, optics and retimers, with adjusted EPS of $1.20 against a $1.17 consensus, and guided to more than 85% year-over-year revenue growth with optical revenue above $600 million in fiscal 2027.
The beat was not enough given the market’s lofty expectations for the futures.
MongoDB, Inc. (NASDAQ:MDB) told a near-identical story, tumbling 11.9% to $382.62. Second-quarter fiscal 2027 revenue rose 30% to $771.8 million versus the $732.9 million consensus, adjusted EPS came in at $1.90 against $1.61 expected, Atlas revenue grew about 29% and the company added a record 2,900 net new customers to reach 70,600.
MongoDB also raised full-year revenue guidance to $2.99 billion to $3.03 billion and adjusted EPS to $6.39 to $6.58, both above Street estimates. Investors sold it anyway, focusing on rising AI infrastructure costs.
Palo Alto Networks, Inc. (NASDAQ:PANW) completed the set, sinking 10.3% to $324.88. Fiscal fourth-quarter adjusted EPS of $1.02 topped the 98 cent estimate on revenue of $3.41 billion versus $3.35 billion, with next-generation security ARR up 63% to $9.10 billion and remaining performance obligations of $21.2 billion.
Fiscal 2027 guidance of $14.10 billion to $14.20 billion in revenue and $4.16 to $4.19 in adjusted EPS could not hold a stock that had run hard into the print.
The damage spread across the cybersecurity and software complex. Fortinet Inc. (NASDAQ:FTNT) dropped 5.6%, CrowdStrike Holdings Inc. (NASDAQ:CRWD) lost 5.2%, Datadog Inc. (NASDAQ:DDOG) fell 5.5% and ServiceNow Inc. (NYSE:NOW) slid 4.1%.
Palantir Technologies Inc. (NASDAQ:PLTR) tumbled 7.2% to $166.91.
California utilities extended their collapse. PG&E Corporation (NYSE:PCG) sank another 8% and Edison International (NYSE:EIX) lost 6.5%, adding to Monday’s 18% and 23% routs after California’s SB 492 advanced without the $6 billion per-incident liability cap or the Wildfire Fund replenishment mechanism investors had expected.
On the other side of the ledger, GitLab Inc. (NASDAQ:GTLB) was the day’s best performer, soaring 12.9% to $50.91 after fiscal second-quarter revenue rose 21% to $286.3 million versus the $273.1 million consensus and adjusted EPS of $0.24 beat the $0.18 estimate.
Dell Technologies Inc. (NYSE:DELL) jumped 7.9% to $458.34 on record fiscal second-quarter revenue of $47.0 billion, up 58% year-over-year, and non-GAAP EPS of $7.04 against a $4.87 consensus. Dell booked $60.9 billion in AI server orders during the quarter, exited with a record $95 billion backlog, and lifted full-year fiscal 2027 revenue guidance by $25 billion to a $192.0 billion midpoint.
Sirius XM Holdings Inc. (NASDAQ:SIRI) rose 7.8% to $29.77 after Deutsche Bank upgraded the Berkshire Hathaway-backed audio company and set a $45 price target.
Wednesday’s Russell 1000 Top Gainers
| Name | % change |
|---|---|
| GitLab Inc. | +12.90% |
| AST SpaceMobile, Inc. | +8.65% |
| Dell Technologies Inc. | +7.85% |
| Sirius XM Holdings Inc. | +7.77% |
| Charter Communications, Inc. | +7.63% |
Wednesday’s Russell 1000 Top Losers
| Name | % change |
|---|---|
| Credo Technology Group Holding Ltd | -18.65% |
| MongoDB, Inc. | -11.88% |
| Palo Alto Networks, Inc. | -10.28% |
| PG&E Corporation | -7.99% |
| Palantir Technologies Inc. | -7.23% |
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