U.S. equities drifted lower into midday Tuesday with the S&P 500 and Nasdaq 100 easing from near record highs set earlier in the session, as a fresh surge in crude oil prices and rising Treasury yields tempered the April rally.

• State Street Energy Select Sector SPDR ETF shares are advancing steadily. Why are XLE shares climbing?

Pakistan’s information minister said a formal response from Iran confirming whether it will send a delegation to the Islamabad peace talks was still awaited as of midday, leaving traders pricing an uneasy middle ground between a potential diplomatic breakthrough and a re-escalation in the Strait of Hormuz.

WTI crude oil climbed 2.7% to around $90 a barrel, while Brent rose 2.5% to $97.80.

The S&P 500 slipped 0.3% to 7,091, while the Dow Jones Industrial Average gave up 90 points, or 0.2%, to 49,352. 

The CBOE Volatility Index climbed 5.4% to 19.89, reflecting a modest bid for hedges as the session’s risk appetite deteriorated.

The Nasdaq 100 outperformed, shedding just 0.1% to 26,567, as software and semiconductor strength offset weakness elsewhere. 

The Russell 2000 was the weakest corner of the market, dropping 0.5% to 2,780 as regional banks and transportation names dragged small caps broadly lower.

A second macro focal point emerged on Capitol Hill, where Fed Chair nominee Kevin Warsh opened his confirmation hearing with unusually pointed prepared remarks. Warsh told senators the central bank “needs new tools and new communications,” and called for “a regime change in the conduct of Fed policy” alongside a “new inflation framework.” 

The 10-year Treasury yield advanced roughly four basis points to 4.29%, with the two-year yield rising about six basis points to 3.78% after U.S. retail sales jumped 1.7% in March — the biggest monthly gain since January 2023 — and ADP showed a sharp pickup in private payrolls, underscoring the resilience of the U.S. consumer.

Precious metals sold off sharply, with spot gold falling 1.7% to $4,738 an ounce, while silver fell 4% to $76 an ounce.

Tuesday’s Performance In Major U.S. Indices

According to the Benzinga Pro platform:

Gold Miners Crater, Airlines Grounded As Oil Bids Return

Energy was the clear leader at the sector level, with the Energy Select Sector SPDR Fund (NYSE:XLE) rising 1.31% as the crude bid fed through to supermajors and services names.

On the regional banking side, the SPDR S&P Regional Banking ETF (NYSE:KRE) slipped 0.9%.

Earnings Aftermath: Good and Bad

On the downside, Tractor Supply Company (NASDAQ:TSCO) cratered 10.8% to $39.99 after missing first-quarter sales expectations.

GE Aerospace (NYSE:GE) also tumbled 6% amid disappointing guidance.

Tuesday’s Russell 1000 Top Gainers

Tuesday’s Russell 1000 Top Losers