US equity indexes declined on Thursday as a sharp sell-off in semiconductor heavyweights dragged technology to the bottom of sector charts, while crude oil prices surged ahead of the close. The Nasdaq Composite dropped 1.4% to 27,153.2, the S&P 500 fell 0.6% to 7,750.1, and the Dow Jones Industrial Average slipped 0.1% to 51,114.6. Energy and consumer staples led the gainers.
Data compiled by Finviz showed that among stocks with market capitalizations exceeding $200 billion, all top 10 names were technology companies, eight of which were from semiconductor-related industries. The three worst performers in this mega-cap group were Arm Holdings, Intel, and Oracle, each down by at least 6.1%.
Oil prices climbed on geopolitical tensions and weather risks. Tankers face a higher risk of attacks and intimidation in the Strait of Hormuz after Iran issued new warnings that it would block unauthorized routes, sources told Reuters. Simultaneously, Tropical Storm Isaias intensified into the Atlantic season's first hurricane on Wednesday night as it approaches the northern Gulf Coast by this weekend, CNN reported. Chevron has begun shut-in procedures for production at four Gulf of America facilities and is evacuating workers as the storm nears, the company stated.
Front-month US West Texas Intermediate crude oil advanced 3.8% to $91.67 per barrel, and global benchmark Brent crude jumped 4.3% to $104.51 per barrel. This occurred despite President Donald Trump reportedly stating Thursday that the US will not attack Iran before the mid-term elections in early November, while citing productive discussions with Tehran.
US borrowing costs at Treasury auctions continued to rise on Thursday. An auction of $22 billion in 30-year bonds hit a high yield of 5.618%, up from 5.308% in the previous auction. The bid-to-cover ratio declined to 2.54 from 2.61 in the prior sale. On Wednesday, a 10-year bond auction also saw the high yield surge compared with the previous sale in September.
In final trading on Thursday, Treasury yields were mixed. The two-year yield fell 1.3 basis points to land at 4.75%. The 10-year rate retreated five basis points to settle at 5.23%, while the 30-year yield slipped six basis points to close at 5.60%. Earlier in the session, both the 10- and 30-year yields had traded higher, approaching their highest levels since 2002.