Dow Drops as 10-Year Yield Hits 2002 High; Caterpillar Slides, Micron Rises

It's Wednesday, October seventh. This is Trade and Ticker, the lunch report. Here's your midday check on U.S. stocks.

Three things still matter into the afternoon. First, Treasury yields, after the ten-year and thirty-year both touched their highest levels since two thousand two this morning, with the ten-year auction landing right around one o'clock Eastern. Second, the minutes from the Fed's September meeting, out at two o'clock Eastern. Third, earnings after the close from Applied Digital and Levi Strauss.

Here's the picture at midday. Stocks are lower a day after record closes for the S-and-P and the Nasdaq, and the Dow is taking the biggest hit. As of about one o'clock Eastern, the Dow is down about seven-tenths of a percent, or roughly three hundred seventy points. The S-and-P is down a bit less than four-tenths of a percent. The Nasdaq is down about half a percent. That's actually an improvement from the morning lows, when the Dow was off more than five hundred points. Small companies are having a tougher day, with the Russell two thousand down a little more than one percent.

The story is the bond market. The ten-year Treasury yield touched about five-point-three-six percent this morning, its highest since April of two thousand two, before easing back to around five-point-three-two. The thirty-year topped five-point-seven percent. Higher long-term rates make borrowing more expensive for companies and consumers, and they make bonds more competitive with stocks. Traders still see about a four-in-five chance the Fed holds rates steady later this month, but another hike by December is still largely priced in.

Oil has cooled off. Brent crude climbed to around one hundred two dollars a barrel early on, after new Houthi attacks on Saudi Arabia and a storm in the Gulf of Mexico. It has since given most of that back and is sitting just above one hundred dollars. U.S. crude has slipped back under ninety dollars.

Now the movers, and the Dow's problem has a name: Caterpillar. The heavy equipment maker is down more than five percent, and because the Dow is weighted by share price, that one stock is the biggest drag on the average. Higher long-term rates hit companies like this directly, since customers usually buy big machines on credit. Deere is down about three percent after the Federal Trade Commission and the Agriculture Department opened a public inquiry into market practices among farm equipment makers and dealers. Bank stocks are lower too, with Citigroup, Wells Fargo, and Goldman Sachs each down nearly two percent.

In tech, it's a split board. Micron has flipped from losses in early trading to a gain of more than three percent, after D.A. Davidson said it expects the stock to triple, arguing that A-I demand for memory will outstrip supply through twenty twenty-eight. Nvidia, A-M-D, and Tesla are each down about one percent, and Meta is down about two percent. Apple and Amazon are bucking the trend, both higher.

A few single-stock stories. Penguin Solutions, which builds A-I data center systems, is up about fourteen percent after a strong quarterly beat. Webull, the online trading app, is down about twenty percent after CNBC reported that a House committee on China found the company's ties to the Chinese government create a national security risk. Webull disputes the report. And Constellation Brands has turned around. The Corona and Modelo brewer was down about five percent before the bell on weak beer sales, but it's now up about two percent, as investors focus on a quarter that beat expectations.

After the close tonight, two names. Applied Digital, which builds and leases data centers for A-I, reports quarterly results. Investors want updates on new leases, financing, and how fast its campuses are coming online. The stock is down more than five percent today, ahead of the report. And Levi Strauss reports third-quarter results. The focus is denim demand, how value-minded shoppers are holding up, and whether the company raises its full-year outlook. Levi shares are down about four percent today. Both companies hold their calls at five o'clock Eastern.

Watch three things into the close. First, the ten-year auction result, and whether weak demand sends yields back toward this morning's highs. Second, the Fed minutes at two, and how many officials see more hikes ahead after September's increase. Third, whether the Dow can claw back some of Caterpillar's drag, or whether the selling in industrials and banks spreads.

That's the midday picture. We'll be back this evening with a company deep dive on the day's biggest stories, including Applied Digital and Levi Strauss right after their reports. Thanks for listening. I'm Trade and Ticker.