Twenty of the 30 Dow Jones Industrial Average (^DJI -0.11%) stocks are up today. The Dow is down anyway. That tells you most of what you need to know about this session.
The Nasdaq Composite (^IXIC -1.27%) is down 1.02% as of 1:18 p.m. ET, and the S&P 500 (^GSPC -0.60%) has fallen 0.50%. The Dow may have the smallest drop, losing just 0.17%, but it's still below the breakeven bar.
The Nasdaq took the worst of it early, hitting roughly negative 1.4% near 11 a.m. ET before clawing back some of the damage. The Dow has hovered near the flatline all day.
One bad day for two big stocks
Let's start with Caterpillar (CAT -4.96%), down 4.9% and single-handedly removing about 255 points from the Dow. The high-priced construction machinery giant is the second-heaviest weight on the Dow, so a mid-single-digit percentage move makes a big difference. Caterpillar is trading at historically rich earnings multiples. The stock is still up a staggering 103% over the last year.
The macro stage added drama, as usual. President Trump said he would not extend the expired ceasefire with Iran and repeated his threat to strike Oman. The U.S. Strategic Petroleum Reserve has fallen to its lowest level since 1982. Oil prices are up by roughly 0.5%.
Image source: Getty Images.
Memory chips gave back Monday's celebration in full. SK Hynix (SKHY -9.44%) dropped 8.7% and Micron Technology (MU -7.36%) fell 7.5%, both more than erasing yesterday's gains. It's a profit-taking story, and Micron has still more than tripled in 2026.
Not everything struggled. Home Depot (HD +0.58%) rose after beating second-quarter estimates, though it noted shoppers are sticking to smaller projects amid lofty interest rates on loans and credit lines.
Dow Jones Industrial Average
Key Data Points
A very lopsided down day
Here is the number that matters most. Twenty of the Dow's 30 components are higher today. At the same time, the Invesco S&P 500 Equal Weight ETF (RSP -0.07%) is essentially flat at positive 0.02% while cap-weighted versions of the same index dropped 0.5%. A handful of heavyweights accounted for the overall index's negative moves.
That's the mirror image of late July, when a few megacaps propped up indexes that most stocks were lacking. The machinery is the same; only the direction has flipped.
The deeper issue is that the 10-year Treasury yield has risen from 3.97% before the war with Iran began in February to 4.71% today. The 30-year hit 5.32%, the highest since 2007.
Higher oil feeds inflation, inflation lifts yields, and rising yields will compress the valuations of exactly the AI-related stocks that have driven this year's gains. Tech giants will keep building AI data centers, but their financing options are growing expensive.
Until that chain breaks, choppy sessions like this one will keep happening.
