The major averages extended their holiday-shortened week decline on Wednesday as rising oil prices and higher Treasury yields kept equities under pressure throughout the session. The S&P 500 (-0.5%), Nasdaq Composite (-0.6%), and DJIA (-0.8%) all finished lower, while the Russell 2000 (-1.3%) and S&P Mid Cap 400 (-1.1%) underperformed amid even steeper losses outside the large-cap averages.

Crude oil remained one of the session's primary headwinds as the U.S.-Iran conflict continued to escalate. WTI crude settled $3.05 higher (+3.3%) at $96.07 per barrel after reports that the U.S. struck several Iranian oil tankers in response to an attack on one of its warships. Iran subsequently warned that it would escalate its counterstrikes as U.S. attacks continue, according to Bloomberg. The advance in crude provided a considerable boost to the energy sector (+1.1%), which stood alone in positive territory among the 11 S&P 500 sectors.

Higher Treasury yields added another layer of pressure after the Treasury Department announced plans to buy back $6 billion of long-term debt. The announcement sparked a sharp increase in rates during the late morning and helped push stocks to their session lows. The 10-year note yield ultimately settled three basis points higher at 4.84%.

The combination of higher oil prices and rising rates weighed particularly heavily on several economically and rate-sensitive areas. The consumer discretionary (-1.4%) and consumer staples (-0.9%) sectors finished with sizable losses, while the utilities (-1.2%) and real estate (-1.1%) sectors also struggled.

The industrials sector (-1.5%) finished at the bottom of the sector standings, with Vertiv (VRT 262.87, -27.96, -9.61%) among the more pronounced laggards.

Casey's General (CASY 629.03, -104.46, -14.24%) was another notable decliner, finishing as the weakest S&P 500 components following its earnings report. The company exceeded EPS and revenue expectations, but the reaction reflected some disappointment surrounding its inside operations and outlook for the remainder of the year.

The information technology sector (-0.2%) once again held up considerably better than the broader market as semiconductor stocks extended their recent relative strength. The PHLX Semiconductor Index gained 0.4%, with several semiconductor names ranking among the better-performing S&P 500 components, although weakness in NVIDIA (NVDA 223.79, -1.94, -0.86%) limited the group's contribution.

Apple (AAPL 315.34, -0.88, -0.28%) briefly moved into positive territory during the afternoon following the company's product event before ultimately finishing the session lower. Apple introduced the iPhone Duo, its first foldable iPhone, along with the iPhone 18.

Meta Platforms (META 653.69, +40.21, +6.55%) remained the standout among the mega-cap stocks following the debut of its Muse personal AI agent. Its sizable gain helped limit the communication services sector's decline to 0.3% despite weakness in Alphabet (GOOG 328.38, -7.00, -2.09%) and sharp losses in Comcast (CMCSA 24.59, -1.74, -6.61%) and Charter Comm (CHTR 133.89, -11.85, -8.13%) . The latter two came under pressure after Comcast highlighted heightened "competitive intensity" during comments at the Goldman Sachs Communacopia + Technology Conference.

By the close, the scattered strength in semiconductors and META had done little to change the broader complexion of the session. Small- and mid-cap stocks underperformed, 10 of the 11 S&P 500 sectors declined, and the energy sector's gain largely reflected the same surge in crude oil that weighed on much of the rest of the market. With Treasury yields also moving higher, Wednesday's action extended the broadly defensive start to the abbreviated week.

U.S. Treasuries finished Wednesday with losses across the curve, which produced fresh 2026 highs in yields on the 10-year note and shorter tenors. Treasuries climbed off their opening lows with the long bond leading the way, but that move was rebuffed after the U.S. Treasury specified its increased buyback plans. Treasuries reached lows shortly after the news, recovering some of their losses as the day went on. The bounce received some short-lived support from an excellent $38 billion 10-year note sale, but shorter tenors returned to their lows ahead of the close. The 2-year note yield settled up three basis points to 4.43%, and the 10-year note yield settled up three basis points to 4.84%. 

• Russell 2000: +17.7% YTD
• Nasdaq Composite: +13.0% YTD
• S&P Mid Cap 400: +12.5% YTD
• S&P 500: +11.6% YTD
• DJIA: +9.0% YTD

Reviewing today's data: 

• Weekly MBA Mortgage Applications Index -2.7%; Prior 0.8%