The S&P 500 opened lower with rates and oil prices moving higher, and continued to weaken throughout the morning. Equities eventually bottomed and reversed as oil fell on stockpile release news from the IEA along with yields pulling back. Yields took another leg lower after a strong 10y auction, further strengthening equities. The S&P is looking to get back to unchanged after bottoming around -0.7%, currently down ~0.2%. The equal-weight is lagging while small and mid caps are notably under-performing.

Healthcare is the upside standout today, with strength in large-cap biopharma (LLY, PFE, JNJ +2-3%). A consortium including the DOE, NIH, GOOG and META announced a ~$2B investment in AI technologies for biological research. That’s not helping the broader genomics group, however, as the ARKG ETF falls another 2% (-9% yesterday). Financials are middle-of-the-pack and major US banks are down ~1% along with international peers. In Tech, the DRAM ETF turned positive after being down 3% earlier, driven by strong reversals in MU and SNDK- and for MU, an employee vote to strike. A bullish sell-side note also helped. However most semi names are lower. Software is also lower with cyber names lagging. Industrials are underperforming with weakness across-the-board. The FTC and USDA are seeking public comments on ag equipment manufacturing and distribution markets. DE and CAT are down 3-6%. Data center infrastructure stocks like ETN, GEV, FIX and EME are down 3-5%, while neoclouds are sharply lower as well.

Treasury yields fell promptly along with oil as equities opened this morning. The 10y auction provided more welcome relief, stopping-through by 1.7bp. The Fed Minutes were released at 2pm and didn’t impact markets significantly. There’s been a lot of talk on how AI capital raising is impacting Treasury yields, and that discussion got another data point with news that SPCX (-3%) was reportedly looking to raise $40B in debt to purchase NVDA (-1%) chips.