Tech Stocks Ease As Treasury Yields Rise, Commodity Rally Fuels Sector Rotation: What's Driving Markets Wednesday?

A session marked by sector rotation is unfolding on Wednesday, with the tech sector giving back some of Tuesday’s gains, making way for the advance of energy and materials sectors following a surge in commodities prices.

The S&P 500 remained flat at 1 p.m. in New York, while the tech-heavy Nasdaq 100 declined by 0.5%. In contrast, blue-chip and small-cap stocks saw increases of 0.5% and 0.6%, respectively.

Treasury yields saw a slight uptick, causing the iShares 20+ Year Treasury Bond ETF TLT to decline for the fifth consecutive session.

Commodities emerged as the strongest performers in the market. Copper surged by over 3%, reaching highs last observed in April 2023 as China announced plans to reduce output. Silver rose by 3.6% to $25/oz, the highest level since early December 2023, driven by growing demand for precious metals.

Gold was up 1%, on track to erase Tuesday’s losses, driven by a sharper-than-expected inflation surge in February.

Oil prices saw a nearly 2% surge, with West Texas Intermediate (WTI) rebounding to $79 a barrel, following a larger-than-anticipated decline in U.S. crude inventories last week.

Wednesday’s Performance In Major US Indices, ETFs

The SPDR S&P 500 ETF Trust SPY was flat at $516.85, the SPDR Dow Jones Industrial Average DIA inched 0.5% higher to $392.60 and the tech-heavy Invesco QQQ Trust QQQ fell 0.6% to $441.06, according to Benzinga Pro data. 

Sector-wise, the Energy Select Sector SPDR Fund XLE, was the top performer, up by 1.7%, followed by the Materials Select Sector SPDR Fund XLB, up by 1.5%, while the Technology Select Sector SPDR Fund XLK trailed, down by 1%.

Wednesday’s Stock Movers

• Dollar Tree Inc. DLTR tumbled nearly 15% after the company missed both quarterly earnings and revenue estimates.
• Southern Copper Corp. SCCO rallied over 10% in response to copper price gains. Other miners rallying Wednesday were Freeport-McMoRan Inc. FCX, up 7%, and Valero Energy Corp. VLO, up nearly 6%.
• Williams-Sonoma Inc. WSM soared nearly 20% on stronger-than-expected quarterly results.
• PayPal Holdings Inc. PYPL rose 4% after the fintech company announced a new chief enterprise services officer.
• Carnival Corp. CCL rose over 3% following a bullish note from Goldman Sachs.
• Tesla Inc. TSLA fell over 3% after Wells Fargo downgraded the stock from Equal-weight to Underweight and adjusted its price target from $200 to $125.

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