U.S. stock indexes climbed on Wednesday as investors moved to recover part of Tuesday’s sharp selloff, with the S&P 500 rising 0.72%, the Dow Jones Industrial Average up 0.82%, and the Nasdaq 100 gaining 0.50%. Attention turned to Micron Technology’s earnings report after the close, as traders looked for fresh evidence on whether artificial intelligence demand is translating into results.
Oil prices extended losses, reinforcing the day’s lower-inflation narrative and supporting rates-sensitive markets. At the same time, corporate and policy developments—including a U.S. housing bill and chip-related news abroad—helped steer sector performance. Data also brought a mixed picture for growth expectations, with May new home sales falling to a four-month low.
Key takeaways
- Major indexes rose: The S&P 500 gained 0.72% while the Dow added 0.82% and the Nasdaq 100 rose 0.50%.
- Primary catalyst: Investors looked ahead to Micron Technology’s earnings after the close to gauge AI-related demand.
- Rates support from crude: WTI crude fell more than 4% to a 3.5-month low, easing inflation expectations and lifting Treasury prices.
- Mixed economic signals: May new home sales unexpectedly declined to a four-month low, countering other housing and mortgage-related updates.
- Sector divergence: Homebuilders climbed on legislation progress, while mining and energy stocks fell alongside declines in gold, silver, copper, and crude oil.
What drove the market higher
Equities edged higher as investors absorbed Tuesday’s selloff and shifted attention to company-specific catalysts. Micron Technology’s earnings, due after the close, stood out for traders because the memory maker is widely viewed as a major beneficiary of infrastructure spending tied to AI deployments.
Beyond tech, regional equity momentum added lift. South Korea’s Kospi closed up more than 3% after SK Hynix said it plans to raise 45.45 trillion won via a U.S. listing and intends to use the proceeds to expand chip-making capacity. The move reinforced the broader market theme that capital spending for AI supply chains remains active.
In Washington, homebuilding-linked stocks gained traction after Congress passed the 21st Century Road to Housing Act, which supported sentiment across homebuilders and construction suppliers. Energy-sensitive and travel stocks also participated in the rebound, helped by sharply lower crude prices.
Crude’s drop and what it meant for rates
WTI crude futures extended recent declines, dropping more than 4% to a 3.5-month low. The decline was associated with improved supply expectations around shipping in the Middle East: more tankers were reported to be transiting the Strait of Hormuz with satellite signals switched on, and the International Maritime Organization said it received guarantees allowing hundreds of ships to exit the Persian Gulf.
The oil slump helped pull down Treasury yields and inflation expectations. The 10-year Treasury yield fell about 8 basis points to a 6-week low of 4.41%. The 10-year breakeven inflation rate dropped to a 14-month low of 2.176%, a development traders often interpret as lowering the market’s expected inflation path.
In rates markets, there was also mention of supply considerations: the Treasury is set to auction $28 billion of 2-year floating-rate notes and $70 billion of 5-year notes later in the day, which can affect bond demand and price action.
Economic data: mortgage and trade signals, but weaker housing
Economic releases were mixed. According to MBA data, U.S. mortgage applications rose 1.0% in the week ended June 19. The purchase mortgage sub-index declined 0.6%, while the refinancing sub-index increased 3.0%. The average 30-year fixed mortgage rate fell 1 basis point to 6.59% from 6.60% the week prior.
On external accounts, the U.S. Q1 current account deficit widened to $225.8 billion, compared with an expected $208.9 billion.
Housing data, however, disappointed. U.S. May new home sales fell 7.3% month over month to a four-month low of 580,000, versus expectations for an increase to 640,000. That drop coincided with stronger demand for Treasuries, as traders recalibrated their outlook for inflation and policy timing.
Interest-rate expectations also remained in focus. The market was pricing a 32% chance of a 25 basis point rate hike at the next FOMC meeting on July 28–29.
Notable stock moves
Homebuilders and construction suppliers led gains after the housing legislation update. KB Home rose more than 16%, Builders FirstSource was up more than 11%, and peers including Lennar, D.R. Horton, Pulte Group, and Toll Brothers were all higher. Home Depot climbed more than 4%.
Airlines and cruise operators advanced as crude oil’s selloff lowered fuel-cost pressure. Alaska Air Group rose more than 7%, United Airlines and American Airlines were up more than 6%, and Royal Caribbean and Delta gained more than 5% and more than 4%, respectively. Carnival, Norwegian Cruise Line Holdings, and Southwest Airlines were also higher.
Travel and online booking stocks rose broadly with oil weakness boosting demand expectations. MakeMyTrip gained more than 10%, Expedia Group added more than 9%, and Booking Holdings rose more than 8%. Airbnb and TripAdvisor were also up.
Mining and energy names were pressured as gold, silver, and copper retreated to multi-month lows and crude prices slid further. Anglogold Ashanti fell more than 6%, while Barrick Mining and Coeur Mining dropped more than 4%. Energy-related stocks such as Baker Hughes and Halliburton declined more than 4% to 5%, and larger producers including Chevron were down more than 2%. Baker Hughes’ and other energy declines reflected the direct linkage to crude’s direction and the sector’s sensitivity to commodity pricing.
Outside macro drivers, there were also company-specific moves. Twilio rose more than 3% after Goldman Sachs initiated coverage with a buy rating and a price target of $300. Honeywell Aerospace climbed more than 3% after S&P Dow Jones Indices said it will replace Conagra Brands in the S&P 500 before Tuesday’s open. FuelCell Energy gained after announcing an agreement to supply 380 megawatts of clean on-site power for data centers. On the downside, Cerebras Systems fell more than 15% after its annual sales forecast missed high investor expectations, and Principal Financial declined after Bank of America Global Research downgraded the stock to underperform.
Bigger picture: what investors will watch next
With the trading session shifting into earnings focus, investors will likely monitor Micron Technology’s results for confirmation on AI-driven memory demand and broader semiconductor momentum. Next, the market’s attention should turn to how weak housing sales data interacts with falling oil prices in shaping inflation expectations, alongside upcoming policy guidance reflected in rate-cut or hike probabilities for the late-July FOMC meeting.
