The Midday Tape

A crude oil spike and a fresh leg up in Treasury yields are doing the damage today, pushing traders out of growth and into defensives while mega-cap tech eats losses despite a wall of bullish analyst notes.

Rates and oil are the story.

The Dallas Fed manufacturing index came in soft at 9.8 versus 11.6 prior, but that's been overshadowed by the crude tape: the U.S. oil fund (USO) is up 3% as TotalEnergies (TTE) flags tight LNG supply and a debate over force majeure, and strategic reserves sit at their lowest since 1982. That combination, rising oil plus rising yields, is the desk's shorthand for "inflation isn't dead," and it's hitting the long-duration Treasury proxy (TLT), down 1.2%. Private credit names (ARES, BX, KKR) are trading lower on the read that elevated rates threaten their leveraged models. Gold (GLD) isn't catching a safety bid either, off nearly 4%, a sign this is a rates story more than a fear story.

Mega-cap tech and software are the casualties.

Nvidia crossing $5.4 trillion in market cap, now bigger than the entire Russell 2000, is fueling fresh Michael Burry-style bubble chatter even as the broader complex bleeds. Oracle (ORCL) is down over 3%, Microsoft (MSFT) and Alphabet (GOOGL) are both red despite Oppenheimer calling Microsoft's Copilot push "an AI operating system, not a chatbot" and Piper Sandler bumping its Alphabet target to $400. Meta (META) is off more than 4% even as Zuckerberg pitches the company's "biggest enterprise AI push yet." The software complex broadly (HubSpot, ServiceNow, ArkTeam, Monday.com among the names cited) is getting squeezed by the same yields-plus-oil logic hitting duration-sensitive assets everywhere. The S&P proxy (SPY) is down 0.8%, the Nasdaq proxy (QQQ) off 1.2%, small caps (IWM) down 1%.

Rotation is defensive, and it's broad.

Eight of eleven sectors are lower this morning, with staples, healthcare and utilities holding up while cyclicals and tech absorb the selling. Individual names show the pattern: UiPath (PATH), Snowflake (SNOW), Palantir (PLTR) and Tesla (TSLA) are all lower, while Palo Alto Networks (PANW) is a rare green name after BTIG lifted its target to $425.

Elsewhere, single names are moving on their own news.

Flutter (FLUT) is down 6% after halting Brazilian operations under a new betting ban, an estimated $70 million revenue hit that's dragging DraftKings (DKNG) lower in sympathy. MediciNova (MNOV) is cut in half, down 32%, after its Phase 2 liver-fat trial missed. Kandi Technologies (KNDI) is a bright spot, up on stronger year-over-year first-half results.

Still ahead this afternoon:

earnings from Jefferies (JEF), Vail Resorts (MTN) and IDT land after the close, and the desk will be watching whether oil and yields keep climbing into the bell.

Bottom line: this is a rates-and-oil-driven risk-off session, not a broad growth scare, and defensives are doing exactly what they're supposed to do while mega-cap tech pays the toll.