US stock markets pullback from record peaks as bond yields and crude oil prices fire up

The US stock market pulled back from the record high levels on Wednesday as crude oil prices and bond yields edged higher. The Dow Jones fell over 550 points, and the S&P 500 plunged 0.6%. The NASDAQ 100 fell 200 points amid profit-taking in the mega-cap stocks.

The crude oil prices bounced back, paring the majority of the losses made during the week. Reports of Iranian attacks on the oil vessels instilled uncertainty back into the energy markets. The Brent crude oil prices surged above $101 per barrel; the WTI crude oil prices jumped to $89 per barrel.

In addition, the Treasury yields surged back above previous peaks on Wednesday. The US 10-year yields crossed 5.35% on Wednesday, bringing back fears of higher-for-longer interest rates.

Despite the broader market rout, chip stocks continued to extend their rally on Wednesday. Shares of Micron, SanDisk Corporation, and Intel Corporation were among the top gainers, surging as much as 3% on Wednesday.

Meanwhile, a Bloomberg report cited that billionaires tied to the AI industry, particularly from companies like NVIDIA and Amazon, were among the top insider sellers in the tech stocks amid turbulent times.

Meanwhile, among the megacap stocks, shares of Nvidia, Alphabet, Microsoft, SpaceX, and Meta Platforms were among the top losers, falling as much as 2%, while Amazon and Apple Inc. share prices surged up to 1%.

Shares of Space Exploration Technologies (SpaceX) fell over 2% on Wednesday after Bloomberg reported, that the company is planning to issue fresh debt worth $40 billion to buy NVIDIA chips for its data centres. Data centres have been among the major revenue contributor for SpaceX, securing billions in revenue by providing AI compute services.

Mortgage rates hit three-year high levels

The 30-year mortgage rates hit 7.49% for the week ended October 2, according to the Mortgage Bankers Association. This marks the seventh weekly increase in the mortgage rates. The spike was largely driven by Federal Reserve’s tightening monetary policy stance and surging Treasury yields. Consequently, the mortgage applications fell 4.2% in the week ended October 2, a fifth week of consecutive decline.