U.S. equities traded mixed on Wednesday, with technology gains offsetting declines in energy shares. The Dow Jones Industrial Average fell 0.07% to 52,058.51, while the NASDAQ Composite rose 0.72% to 26,168.28. The S&P 500 gained 0.33% to close at 7,610.98.

Sector Performance

Information technology shares led market gains, jumping 0.9% for the session. Conversely, energy stocks declined 1.9%, pressured by falling crude prices. This divergence highlights the sector-specific nature of the current market movement, with growth-oriented tech outperforming cyclical energy names.

Economic Data

U.S. business inventories rose 0.8% month-over-month in July, significantly exceeding market estimates of a 0.3% gain. This follows a revised 0.1% increase in the previous month.

In other economic developments:

• U.S. retail sales rose 1.2% month-over-month in August, beating estimates of a 0.8% gain and reversing a revised 0.5% decline in July.
• U.S. export prices rose 0.6% in August, versus expectations of a 0.5% gain.
• U.S. import prices increased 0.7%, compared to estimates of a 0.4% rise.
• The New York Fed’s Services Business Activity Index fell to -8.7 in September from 0.5 previously.

Commodities

Crude oil prices settled 3.2% lower at $102.43 per barrel, down $3.40. Precious metals rallied, with gold up 1.1% to $4,380.20 and silver rising 1.7% to $64.95. Copper also gained 0.8% to trade at $6.4940.

Global Markets

European indices posted broad gains. The STOXX 600 rose 0.5%, alongside similar increases in Germany’s DAX, France’s CAC 40, and London’s FTSE 100. Spain’s IBEX 35 climbed 0.3%.

Asian markets closed higher, led by China’s Shanghai Composite (+0.71%) and Japan’s Nikkei 225 (+0.69%). India’s BSE Sensex gained 0.45%, while Hong Kong’s Hang Seng index rose 0.19%.

Notable Movers

LuxExperience BV-ADR (NYSE: LUXE) surged 19% to $8.47 following fourth-quarter results. DataMeds AI Inc (NASDAQ: MEDS) jumped 264% to $5.89 after announcing the acquisition of Helomics. Delixy Holdings Ltd (NASDAQ: DLXY) rose 70% to $0.70 on merger talks.

On the downside, Cuprina Holdings (Cayman) Ltd (NASDAQ: CUPR) fell 49% to $1.50 after pricing a public offering. Xenetic Biosciences Inc (NASDAQ: XBIO) dropped 37% to $2.68 following an acquisition deal. Braskem SA (NYSE: BAK) declined 13% to $1.82 after a downgrade by UBS.

Drone strikes have forced Saudi Arabia to shut its 4 million barrel-a-day East-West pipeline, leaving the Yanbu export terminal on the Red Sea with crude to sustain shipments for just five to seven days, Reuters reports.

The disruption removes a critical bypass for the Strait of Hormuz, which has slowed to 6 million to 9 million barrels a day. Houthi fighters have also seized an island at the mouth of the Red Sea, threatening Bab el-Mandeb as well.

Supply Constraints and Stockpile Depletion

Saudi output fell to 6.2 million barrels a day in August from 10.9 million in February. World stockpiles have shrunk by roughly 400 million barrels this year. Yanbu's roughly 35-million-barrel storage is draining, with repairs potentially taking five to six weeks. Stocks at Egypt's Ain Sukhna and Sidi Kerir terminals can supply customers for only several days.

Brent briefly exceeded $111 a barrel. The International Energy Agency forecast a 5.7 million barrel-a-day decline in world supply this year. Foreign buyers are pulling barrels out of the U.S., with early-August distillate exports near a record 1.9 million barrels a day. Domestic stockpiles are already 13% below the five-year average.

Refining Capacity Limits

U.S. refineries ran at 97.8% of capacity with crude inputs of 17.6 million barrels a day, according to the Energy Information Administration. RBN Energy Senior Analyst Liz Decken noted that while a $100/bbl crack makes refineries profitable, it does not increase throughput capacity. Merchant refiners Valero Energy (NYSE: VLO) and Marathon Petroleum (NYSE: MPC) have gained 143.60% and 151.44% year-to-date, respectively.

Headline diesel crack spreads have touched records of $108 a barrel. Actual net capture is eroded by roughly $15 a barrel in Renewable Identification Number compliance costs, along with elevated natural gas and operating overhead.

What the Numbers Show

The divergence between headline crack spreads and net profitability is stark. While diesel crack spreads reached $108 a barrel, refiners face approximately $15 a barrel in compliance costs and other overheads. This suggests that despite record-high nominal margins, the operational profitability for merchant refiners is significantly compressed by regulatory and input cost pressures, limiting their ability to pass on full price increases or expand margins proportionally to headline figures.

Downstream Inflationary Pressure

Elevated diesel prices risk severe consequences due to seasonality. The late-summer and autumn harvest season represents an inflexible demand window where farmers must avoid crop spoilage. These costs ripple through the supply chain, compressing farm income and reducing forward demand for agricultural machinery and fertilizers, eventually leading to higher food prices for retail consumers.