Yields hit 24-year highs, Caterpillar drops 5.75%, PepsiCo reports

Long-dated Treasury yields reached their highest levels since 2002 on Wednesday and stocks pulled back from Tuesday’s records, with the industrials and high-multiple software hit hardest: Caterpillar fell 5.75%. Overnight, Samsung’s record quarter still missed estimates, Asia and Europe are lower and Brent is above $104, and today brings PepsiCo’s results, jobless claims, two Fed speakers and a 30-year bond auction.

Yields at 24-year highs pulled the indexes off their records

The 10-year Treasury yield reached 5.365% on Wednesday, its highest since April 2002, and the 30-year touched 5.732%, its highest since May 2002, per Reuters. The S&P 500 fell 0.22% to 7,801.75, the Dow 0.66%, or 341.11 points, to 51,180.17, and the Nasdaq Composite 0.22% to 27,538.69, per Reuters; the S&P 500 and the Dow each snapped a four-day winning streak. In our feed, the S&P 500 fund SPY fell 0.24%, the Nasdaq-100 fund QQQ 0.25%, the Dow fund DIA 0.69% and the small-cap fund IWM 1.29%. The long-dated Treasury fund TLT slipped 0.17%.

Breadth was weaker than the index moves suggest: 65 of the 100 stocks and funds we track fell, and Reuters counted 497 new lows against 115 new highs on the NYSE.

Three things pushed yields. Minutes of the Fed’s September 15–16 meeting, released at 2:00 p.m., showed all 19 officials backed the quarter-point increase to 3.75%–4.00%, and most saw another increase before year-end as likely appropriate, per Bloomberg. Investing.com put market pricing at about 19% for a hike at the October 27–28 meeting and roughly 80% for December. Brent crude settled above $100 even after the International Energy Agency announced accelerated releases from stockpiles, per Reuters. And Investing.com pointed to about $80 billion of new bond sales from large US companies, including SpaceX and Broadcom, competing for the same buyers as Treasuries. The gold fund GLD fell 1.67% in our feed.

Industrials took the brunt

Caterpillar (CAT) fell 5.75% to $813.83 from $863.44, the largest decline among the 100 names in our feed, and traded as low as $806.29. 24/7 Wall St. tied the drop to long yields: heavy equipment is bought on credit, so higher rates raise customers’ financing costs and the hurdle for new orders, and Caterpillar carries its own finance arm as well. Deere fell 3.80% and PACCAR 2.25%, and the industrial fund XLI lost about 2%, three times the broad market’s decline, per 24/7 Wall St. Investing.com also noted a Zacks downgrade to Hold and the company’s announcement of a $1 billion expansion of compact-equipment manufacturing in North Carolina. Among the other industrials we track, Honeywell (HON) fell 2.24%, GE Aerospace (GE) 1.86% and RTX (RTX) 1.65%. Homebuilders, the other rate-sensitive group, fell 2.9%, per Reuters.

High-multiple software and the brokers sold off

CrowdStrike (CRWD) fell 4.81% to $265.44, Palo Alto Networks (PANW) 3.42% to $405.57, reversing Tuesday’s 3.23% gain, Cloudflare (NET) 3.39%, Datadog (DDOG) 2.48% and Adobe (ADBE) 2.25%. We found no company-specific news for any of them. The common thread is that these are the stocks whose valuations rest most on earnings years away, which is where a 24-year high in the 30-year yield bites hardest. The same logic ran through semiconductors, which fell 1.2% as a group, per Reuters: Texas Instruments (TXN) lost 2.78%, Arm (ARM) 2.71% and Qualcomm (QCOM) 2.16%. Meta (META) fell 2.38% to $721.31.

Coinbase (COIN) fell 3.92% to $178.45 and Robinhood (HOOD) 2.22% to $109.51 on 18.8 million shares. Online broker Webull had its worst day in a year after US lawmakers flagged its ties to China, per Yahoo Finance; whether that explains the moves in its larger rivals we could not confirm.

Micron rose into Samsung’s record quarter, which still missed

Micron (MU) rose 4.06% to $1,088.00 from $1,045.56 on 30.6 million shares, the second-largest gain in our feed, and was quoted at $1,092.50 after hours. Overnight, Samsung Electronics guided to third-quarter operating profit of 107.4 trillion won, about $80.2 billion, up 782.5% from a year earlier and the first time a technology company has projected a quarter above 100 trillion won, per Investing.com and CNBC. It still fell short of the 108.67 trillion won Bloomberg consensus, and Samsung shares slipped 1.5% in Seoul, per Investing.com. The engine is high-bandwidth memory and server DRAM for AI data centers, and CNBC noted that memory price increases have slowed, with one analyst looking for flat margins in the segment. That is the detail that matters for Micron, which sells into the same market.

Health care led the S&P 500’s sectors, per Reuters. The health-care fund XLV rose 1.03% in our feed; Eli Lilly (LLY) gained 2.70% to $1,188.72, Pfizer (PFE) 1.82%, AbbVie (ABBV) 1.75% and Johnson & Johnson (JNJ) 1.44%. We found no single catalyst; on a day when rate-sensitive and high-multiple groups sold, the money went to the sector least tied to either. Spotify (SPOT) rose 5.08% to $512.92 from $488.13, the largest gain in our feed, after announcing it would expand audiobooks from about 22 markets to more than 180 by the end of 2026, with over 350,000 titles in more than 120 languages, per Investing.com. Amazon (AMZN) added 1.42% and Reddit (RDDT) 2.52%.

Further down the market, Bending Spoons (BSP), the Italian owner of AOL, Evernote and Vimeo that listed on Nasdaq in July at $29 a share, per the AP, rose 24.15% to $41.07 on 8.8 million shares, the top gainer in our movers feed; we could not confirm a reason before publication. NorthWestern Energy (NWE) rose 7.33% and Black Hills (BKH) 7.21%; the two utilities are awaiting a final Montana approval for their all-stock merger, and we could not confirm what moved them on Wednesday. ArriVent BioPharma (AVBP) rebounded 11.53% to $16.89 after Tuesday’s 46.84% fall.

Overnight: Asia and Europe lower, Brent above $104

Japan’s Nikkei 225 fell 1.4% to 69,042.11, South Korea’s Kospi 2.6% to 6,625.93, Hong Kong’s Hang Seng 1.3% to 23,809.66 and the Shanghai Composite, trading again after the National Day holiday, 0.8% to 3,811.90, per the AP. Australia’s S&P/ASX 200 lost 0.8%.

The Stoxx Europe 600 fell 1% to its lowest since June 11 in early trading, with Germany’s DAX down 1%, France’s CAC 40 0.9%, Britain’s FTSE 100 0.7% and Italy’s FTSE MIB 1.3%, per Investing.com. French banks Société Générale and BNP Paribas lost more than 2% each after Bank of France Governor Emmanuel Moulin described the country’s fiscal situation as “serious”.

Brent crude is up 3.9% at $104.18 and WTI up 3.9% at $91.70 this morning, per the AP, with no deal yet between the US and Iran to end their war. The 10-year yield is near 5.32% this morning, per the AP. S&P 500 futures are down about 0.3% and Dow futures about 0.6%, per the AP.

What to watch today

PepsiCo’s third-quarter results before the open, with materials expected around 6:00 a.m. ET and the call at 8:15 a.m., per MarketBeat; analysts look for $2.30 a share on about $24.98 billion of revenue. PepsiCo (PEP) fell 1.58% on Wednesday.
Minutes of the ECB’s September meeting at 7:30 a.m. ET, per XTB.
Fed Governor Christopher Waller speaks at 8:15 a.m. ET, per MNI, and St. Louis Fed President Alberto Musalem at 10:40 a.m. ET, per XTB.
Weekly jobless claims at 8:30 a.m. ET; consensus is 200,000 against 197,000 the prior week, per XTB.
Wholesale inventories (revised) at 10:00 a.m. ET, per XTB.
A 30-year Treasury bond auction at 1:00 p.m. ET; the previous auction’s yield was 5.308%, per XTB, against Wednesday’s 5.732% high in the secondary market.
The 10-year yield, near 5.32% this morning after Wednesday’s 5.365% high.
Delta Air Lines reports before the open on Friday, per AlphaStreet.

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