U.S. equities are attempting to stabilize this morning. S&P 500 E-minis were up 0.19%, Nasdaq 100 E-minis were up 0.63% and Dow E-minis were up 0.03% at 5:27 a.m. ET, while Russell 2000 futures were up about 0.22% on delayed CME data. The setup is being helped by a pullback in oil after Wednesday’s spike, but leadership is still concentrated in mega-cap growth and semiconductors, with the Dow and small caps showing only limited follow-through. Reuters noted that oil futures were down roughly 1% early Thursday after the prior session’s two-week highs, while markets continued to assess U.S. strikes on Iran and retaliatory attacks targeting Kuwait and Bahrain.
Wednesday’s session was mixed at the index level but weak beneath the surface. The S&P 500 fell 0.28%, the Dow declined 1.09%, the Nasdaq rose 0.20% and the Russell 2000 lost 0.9%. The Nasdaq was supported by a rebound in AI and semiconductor leadership, including a 2.23% gain for the Philadelphia semiconductor index, but broader cyclicals, rate-sensitive equities and small caps lagged as crude and Treasury yields moved higher.
Sector performance reinforced the message that Wednesday was not a broad advance. Reuters said nine of the 11 S&P 500 sectors declined, while sector readings showed Energy +1.45% as the clear winner on the oil spike. The weaker groups included Materials -2.49%, Consumer Discretionary -1.60%, Communication Services -1.40% and Health Care -1.32%. The takeaway is that the tape had a barbell structure: Energy worked as a geopolitical hedge, while Technology held up through AI and chip strength, but most cyclical and rate-sensitive sectors weakened.
The cross-asset backdrop remains the main risk for equities. The 10-year Treasury yield rose about 4 bp to 4.569% Wednesday and briefly reached a one-month high near 4.58%, while the dollar index slipped to roughly 100.96 and the yen remained near multi-decade lows. Gold rebounded early Thursday, with spot gold up about 0.8% around $4,107/oz, after falling on Wednesday. Oil remains the swing factor: Brent was below $77 early Thursday after a sharp multi-day jump that briefly pushed it above $80.
The macro calendar keeps the inflation/rates debate front and center. Minutes from the June FOMC meeting showed that a few Fed officials saw a case for raising rates before the committee ultimately held the benchmark range at 3.50%–3.75%, with officials increasingly concerned that price pressures were broadening. Today’s calendar includes weekly jobless claims at 8:30 a.m. ET, with consensus looking for 218K versus 215K previously, along with continuing claims, existing home sales and remarks from New York Fed President John Williams.
Stock-Level Stories by GICS Sector
Energy
- Valero Energy (VLO +6.15%), Occidental Petroleum (OXY +3.61%), ConocoPhillips (COP +2.10%) and Chevron (CVX +1.07%) were among the oil-linked winners as crude’s geopolitical risk premium lifted the sector. Exxon Mobil (XOM) underperformed despite the broader Energy bid, underscoring that the move was stronger in refiners and more leveraged oil exposures than in every large integrated major.
Information Technology
- Broadcom (AVGO +4.8%) was one of the most important upside drivers after Apple said it plans to spend more than $30B tied to U.S. chip supply, including a major partnership with Broadcom. Apple (AAPL) also gained, while the announcement supported the broader AI infrastructure narrative.
- Nvidia (NVDA +3.65%) helped the chip rebound after a report that China plans to allow some top AI companies to buy limited volumes of H200 chips. The move helped explain why the Nasdaq held up even as most sectors declined.
- SK Hynix remains an important global AI supply-chain read-through after Reuters reported that its planned $28B U.S. listing was more than seven times oversubscribed, highlighting continued investor demand for high-bandwidth memory exposure.
Consumer Discretionary
- Levi Strauss (LEVI) was down about 6% premarket after sliding in extended trading. The company raised its fiscal 2026 revenue outlook to 7.0%–7.5% growth and reported second-quarter revenue up 8% to $1.56B, but investors focused on consumer budget pressure and a profit outlook that did not fully clear expectations.
- Travel and leisure equities remained pressured by the oil spike. Carnival (CCL -3.9%) and Norwegian Cruise Line (NCLH -1.9%) fell Wednesday, while airlines also weakened as higher fuel costs hit sentiment.
Industrials
- Delta Air Lines (DAL) and United Airlines (UAL) each lost more than 1% Wednesday as higher crude prices weighed on airline fuel-cost expectations. Reuters separately noted that U.S. airline fuel costs jumped 85% in May to nearly $6.7B, keeping energy sensitivity in focus ahead of upcoming airline earnings.
Consumer Staples
- PepsiCo (PEP) rose about 1% premarket after second-quarter revenue increased 6.4% to $24.18B, ahead of the $23.95B LSEG estimate. The company kept annual forecasts unchanged, but management flagged tighter consumer budgets and weaker North American food trends, including roughly 2% organic sales decline in that business.
- Costco (COST) slipped after June sales rose 10.6% to $29.24B, but comparable sales growth slowed to 8.8%, the weakest pace since February. The reaction suggests investors remain demanding on high-quality defensive growth names after strong runs.
Health Care
- AstraZeneca (AZN) and Ionis Pharmaceuticals (IONS) were under pressure after their Wainua late-stage heart-disease trial failed to meet its primary efficacy goal. MarketWatch reported that AstraZeneca lost roughly $27B in market value, while Ionis fell sharply in premarket trading. The setback also lifted attention on competitors with approved ATTR-CM therapies.
Trading Implications
The immediate equity setup is a narrow rebound attempt rather than a durable breadth signal. The bullish path would require crude to keep easing, jobless claims to avoid a growth scare, and AI/chip leadership to broaden into more of Technology and cyclicals. The bearish path is that oil remains elevated, the 10-year yield stays near the upper end of its recent range, and small caps continue to lag despite Nasdaq strength.
For positioning, Energy remains the cleanest hedge against geopolitical and crude-price risk, while select AI infrastructure and semiconductor exposure can still work if leadership broadens. The pressure points remain airlines, travel, Consumer Discretionary, Financials, Real Estate and small caps, all of which are more exposed to the combination of higher rates, higher fuel costs and weaker market breadth.
