U.S. stocks settled lower on Wednesday, with the Nasdaq Composite dipping more than 1% amid a surge in Treasury yields. The broader market weakness was reflected in the CNN Business Fear & Greed Index, which held steady in the "Fear" zone.

Market Performance

The Dow Jones Industrial Average closed lower by around 352 points to 51,511.60. The S&P 500 dipped 0.75% to 7,706.03, while the Nasdaq Composite declined 1.13% to 26,936.04 during the session.

Most sectors on the S&P 500 closed on a negative note. Communication services, utilities, and consumer discretionary stocks recorded the biggest losses. Energy stocks bucked the overall market trend, closing the session higher.

Tech Sector Pressure

Within the Magnificent Seven stocks, Alphabet Inc. (NASDAQ: GOOG) sank 3.8% and Amazon.com, Inc. (NASDAQ: AMZN) fell 2.2%. These declines occurred amid renewed scrutiny of AI-hyperscaler debt issuance.

Sentiment and Economic Data

The CNN Business Fear & Greed Index showed almost no change in overall market sentiment. At a current reading of 35, the index remained in the "Fear" zone on Wednesday, versus a prior reading of 35. The index ranges from 0 to 100, where 0 represents maximum fear and 100 signals maximum greediness.

On the economic data front, the volume of mortgage applications declined by 1.5% in the third week of September, compared to a 4.1% drop in the previous period.

Corporate Updates

Several companies reported earnings or provided guidance updates:

• Cintas Corp (NASDAQ: CTAS) reported upbeat earnings for the first quarter and raised its FY2027 guidance.
• General Mills Inc (NYSE: GIS) reported better-than-expected earnings for the first quarter.

Hopes for a breakthrough in U.S.-Iran talks in New York had briefly pushed crude below $100 a barrel earlier in the session, but officials signaled the talks fell short of any deal.

Investors are awaiting earnings results from Darden Restaurants Inc (NYSE: DRI), TD Synnex Corp (NYSE: SNX), and Costco Wholesale Corp (NASDAQ: COST).

Cintas Corp (NASDAQ: CTAS) reported first-quarter earnings of $1.39 per share, surpassing the analyst consensus estimate of $1.35. The uniform and facility services provider also raised its fiscal year 2027 guidance, signaling confidence in future performance despite a broader market pullback.

Market performance

U.S. equities traded lower on Wednesday, with the technology-heavy Nasdaq Composite falling more than 1%. The Dow Jones Industrial Average declined 0.52% to 51,588.15, while the S&P 500 dropped 0.66% to 7,713.83. Energy shares bucked the trend, rising 0.9%, whereas utilities slid 1%.

Cintas results analysis

The company posted quarterly sales of $3.014 billion, exceeding the consensus estimate of $2.984 billion. This beat on both top-line revenue and bottom-line earnings highlights robust demand for its services. The simultaneous raise in FY27 guidance suggests management expects this momentum to persist beyond the current quarter.

What the numbers show

A notable divergence appeared between Cintas' operational strength and the broader market sentiment. While Cintas delivered a double-beat on earnings and revenue, the Nasdaq Composite fell 1.10%, indicating that sector-specific outperformance was insufficient to lift the broader technology index. Additionally, crude oil inventories rose by 2.969 million barrels against an expected draw of 0.6 million barrels, yet oil prices still traded up 1.4% to $91.66, suggesting market focus remained on other geopolitical or supply factors rather than immediate inventory data.

Notable movers

Several stocks experienced significant volatility based on company-specific news:

• Beneficient (NASDAQ: BENF) shares surged 209% to $1.66 following the announcement of a strategy to eliminate HCLP debt and Heppner Equity Interests.
• Adagio Medical Holdings (NASDAQ: ADGM) plummeted 42% to $0.28 after its board completed a strategic review and initiated a process to explore alternatives to maximize shareholder value.
• Alkami Technology (NASDAQ: ALKT) fell 19% to $14.58 upon concluding its strategic opportunities review.
• IM Cannabis Corp (NASDAQ: IMCC) dropped 29% to $2.95 after announcing a $1.31 million registered direct offering of 655,000 common shares at $2 per share, alongside plans to acquire a 51% stake in Space Defense Innovations.
• Lakefront Biotherapeutics NV (NASDAQ: LKFT) gained 7% to $32.39 after RBC Capital upgraded the stock to Outperform and raised its price target from $26 to $45.
• TriSalus Life Sciences (NASDAQ: TLSI) rose 5% to $5.16 after receiving FDA 510(k) clearance for TriNav Advance.

Global markets and commodities

European markets were mostly lower, with the STOXX 600 slipping 0.4% and Germany’s DAX dipping 0.5%. In contrast, London’s FTSE 100 edged up 0.1%. Asian markets closed mixed, with India’s BSE Sensex gaining 0.40% while Hong Kong’s Hang Seng index dipped 1.01%.

In commodities, gold fell 1.3% to $4,321.30, and silver declined 2.2% to $65.070. Copper also slipped 1.1% to $6.7600.