Oil, freight and a rate hedge rise as the 10-year closes at 5.11%

The session paid holders of oil futures, tanker freight, and a long-rate hedge. It charged long Treasuries, small-caps, gold, and the crypto names that had been running. The 10-year Treasury yield closed at 5.11%, the two-year at 4.85%, per the official par curve.

S&P Global’s flash U.S. composite PMI, a survey of manufacturing and services activity, rose to 58.4 in September from 56.0 in August, the highest reading since July 2021. Fed Governor Michael Barr said further rate increases are likely. The iShares 20+ Year Treasury Bond ETF BTLT fell 1.6% to $80.46 after touching a 52-week low. SPDR Gold Shares BGLD lost 1.8%. The dollar index rose 0.4% to 100.85.

The S&P 500 closed at 7,708.55, down 0.72%. The Nasdaq Composite dropped 1.1%. The Russell 2000 lost 1.8%. KB Home fell 3.0% to $47.15 even after earnings of $1.05 a share against a $0.89 estimate; Charles Schwab tied the drop to a cautious outlook on mortgage rates.

Freight, gasoline, and a rate hedge lead

Amplify’s tanker-freight fund DBWET rose 8.4% to $739.40, the largest unleveraged gain Wednesday, a day after it fell 18.2%. It is still 15.2% below Friday’s $872.14 high.

The fund holds futures on the cost of moving crude, mainly the Middle East-to-China VLCC route. Brent was at $103.75, up 4.5%, and WTI at $93.04, up 2.8%, as of 4:42 p.m. ET.

Gasoline outran crude. The United States Gasoline Fund CUGA gained 4.8% to $150.22 and traded at a 52-week high of $150.47. The United States Brent Oil Fund CBNO added 4.2%; the United States Oil Fund BUSO, which holds WTI futures, rose 3.3% to $148.83 and remains 8.9% below its own 52-week high. Other oil funds rose 2.8% to 3.4%. Energy stocks did much less: the Energy Select Sector SPDR Fund AXLE rose 1.0%.

Simplify’s interest-rate hedge BPFIX, built around options that gain when long-term yields rise, advanced 3.3% to $54.76, the other side of BTLT. Energy futures and that hedge led the unleveraged board; cybersecurity was the equity exception.

Cybersecurity rises against a falling Nasdaq

Cybersecurity stocks moved against the Nasdaq. CrowdStrike rose 5.0% to $262.49 and tagged a 52-week high. Palo Alto Networks gained 5.0%. Okta added 4.4% and also printed a 52-week high. CrowdStrike, Palo Alto, and Okta contributed 0.40, 0.30, and 0.29 percentage points to CWCBR, which rose 2.3% to $46.59, a fraction of a percent below its own 52-week high.

Fastly, the edge-cloud company, rose 13.7% to $29.65 on 30 million shares, against a 7.9 million average. It added 0.28 percentage points to CWCBR. Palantir rose 3.7% to $191.79; YieldMax’s Palantir option-income fund CPLTY gained 2.9%.

Hedera, XRP, and Korea defense take the losses

Canary’s Hedera fund CHBR fell 8.6% to $12.29, the largest unleveraged decline, giving back part of a two-session burst (+15% Monday, +8.0% Tuesday). It is still up 23% over five sessions. XRP was at $1.49, down 5.3%, as of 4:42 p.m. ET. XRP funds fell about 6%, led by Volatility Shares’ XRP fund DXRPI, down 6.2%. Bitcoin was at $84,392, down 2.1%; iShares Bitcoin Trust BIBIT lost 1.9%. Ether was at $2,676, down 2.8%.

PLUS’s Korea defense fund DKDEF fell 6.1% to $41.11. Hanwha Aerospace, 23% of the fund, closed down 3.4% in Seoul at ₩1,021,000. Hyundai Rotem, LIG Defense & Aerospace, Korea Aerospace Industries, and Poongsan, the next four holdings, fell 1.0% to 2.9% there. The KOSPI had closed up 0.9% as of 7:05 a.m. ET, before New York opened. Through the New York close, iShares MSCI South Korea ETF CEWY fell 3.6%. Among single stocks, AST SpaceMobile dropped 5.8%, Applied Optoelectronics 5.6%, and Applied Digital 4.6%.

The same 5.11% yield left gasoline at a 52-week high and long Treasuries at a 52-week low. Korea defense sold off in New York after Seoul had closed.