Oil hits $100 and Europe sells off 2% — Wall Street opens with memory chips up and almost everything else down

Brent crude traded above $100 a barrel on Wednesday morning, at $100.91 as of 13:32 UTC, up 3.1% on the day and back at a level it last saw in July. US crude is at $95.93, up 3.1%. The trigger is the same sequence that ran through Tuesday's session: US Central Command said it destroyed five Iranian tankers after missile attacks on a US warship, Iran's Revolutionary Guard said it hit two US vessels and eight tankers in the Strait of Hormuz, and Houthi forces struck Saudi oil facilities including the 400,000-barrel-a-day Jazan refinery. Tanker traffic through Hormuz is close to a standstill.

Europe sold on it. At midday the Stoxx Europe 600 was down 1.3%, the Euro Stoxx 50 1.6%, Germany's DAX 1.4%, France's CAC 40 1.5% after being down 1.9% earlier, Spain's IBEX 2.2%, the Netherlands 1.3%. US futures were lower into the open, S&P 500 futures −0.3%, Nasdaq 100 futures −0.4%, Dow futures −0.5%, after Tuesday's 628-point Dow fall. The 10-year Treasury yield closed Tuesday at 4.806%, its highest since October 2023, and traded above 4.80% again this morning; CME FedWatch has a quarter-point Fed hike on September 16 at 60%.

The instrument we keep for a day like this is the one we used on Tuesday: not the index level, but the sort. Oil at $100 does not sell the whole market. It sells the parts of the market whose cash flows a higher discount rate hurts most and buys the parts with contracted demand and pricing power. Tuesday's close showed the pattern; Wednesday's open extends it, and the rest of this note is about where the line runs today and what decides tonight.

What oil at $100 sells: Europe, health care, software, and the long bond

Europe is the most exposed developed market to Gulf crude and it traded that way. Our Euro-AI 50 is down 1.6% intraday on the worker's 13:31 UTC recomputation, with the Defense & Aerospace sub-index −2.4% and Industrial AI & Robotics −1.8%; Dassault Systèmes, which fell 7.5% on Tuesday, leads the enterprise names lower. On Tuesday's US close the sort was already visible in the eleven S&P sectors: energy +1.1% and utilities +0.9% were the only gainers, health care −2.5% was the worst (Amgen −10.1%, Stryker −8.8%, Boston Scientific −5.9% on a cyberattack that voids its guidance), financials −1.4%, materials −1.0%.

Software took the second leg of the selling. The iShares software ETF closed Tuesday at $102.66, down 1.8%, its second straight decline and 6.7% below where it started September; inside our Agentic Winners 40, down 2.8% to 922.93, the Control Plane tier lost 3.4% (ServiceNow −5.0%, Workday −4.9%, UiPath −7.8%), Application Leaders 3.0% (Atlassian −6.9%, Intuit −4.1%), Endpoints 2.9% (Shopify −7.6%). The reading is a rates trade and an AI-loser trade at once, and on a day the 10-year makes a three-year high the two cannot be separated.

The long bond is the fourth casualty. TLT closed Tuesday at $82.20, unchanged on the day but sitting on the $82 line where our wave count on the fund reads wave C possibly complete, with the count breaking on a close above $88.49. The MOVE index of bond volatility rose 4.2% to 76.1 on Tuesday, the Nasdaq volatility index 8.3% to 21.7, the VIX 2% to 16.0 and a further 2.8% to 16.2 this morning. Gold did what gold does in a hike week: futures fell to $4,341 overnight, below the 50-day average at $4,402, then rebounded to $4,464 by 13:32 UTC, up 0.6% on the day. The dollar index is at 98.67, near a two-week low, because the yen at 153.3 and the won are stronger, not because the euro is.