Midday Market Movers: Banks Dip on Yield Curve Shift, Fertilizer Stocks Rally on Geopolitical Fears
Financial markets saw a mixed but notably sector-driven session on Friday, with banking stocks under pressure from a key Treasury yield metric while fertilizer producers rallied on supply concerns. Airline and trucking companies fell on rising fuel costs, and corporate earnings and deals sparked sharp moves in individual stocks.
Bank Stocks pressured by ‘Bear Steepening’ Yield Curve
All 101 constituents of the State Street SPDR S&P Bank ETF (KBE) traded lower as the spread between 2-year and 10-year Treasury yields widened—a phenomenon known as a “bear steepening.” This curve shift often signals rising inflation expectations, which can compress banks’ net interest margins, devalue existing bond holdings, increase credit risk, and dampen loan demand. Notably, Western Alliance Bancorp fell nearly 12%, ServisFirst Bancshares dropped about 5%, and Rocket Companies declined 4%.
Fertilizer Producers Climb on Supply Chain Worries
Fertilizer stocks rallied for a second consecutive session. The move is tied to geopolitical tensions, as more than a third of key raw materials for fertilizer pass through the Strait of Hormuz. With conflict involving Iran raising supply risk, companies like CF Industries surged 5% to a new 52-week high, putting it on track for a record closing price and bringing its week-to-date gain to approximately 17%. Intrepid Potash also hit a 52-week high, jumping 9% with similar weekly gains. Nutrien added 2% but was up only about 1% for the week.
Transportation Stocks Hit by Fuel Price Spike
U.S. oil futures rose more than 34% on the week, pushing jet fuel and diesel prices higher. This directly impacted transportation equities. United Airlines shares tumbled nearly 4% after CEO Scott Kirby warned that the recent fuel price spike following U.S. and Israeli strikes on Iran would have a “meaningful” impact on first-quarter results. Delta Air Lines and Southwest Airlines fell 4% and 6%, respectively, in sympathy. Cruise operators Norwegian Cruise Line and Carnival Corp. each dropped about 6%. The trucking sector also sold off, with SAIA down over 9%, Old Dominion falling about 8%, and RXO losing more than 11% as diesel costs threaten profit margins.
Corporate Earnings and Deals Drive Volatility
Several companies experienced significant price action on earnings, guidance, or acquisition news.
- Gap Inc. slid about 13% after reporting fourth-quarter adjusted earnings of 45 cents per share, missing the LSEG consensus estimate of 46 cents. Revenue of $4.24 billion matched expectations.
- Marvell Technology surged 21% following a quarterly beat. Adjusted earnings were 80 cents per share on revenue of $2.22 billion, versus analyst forecasts of 79 cents and $2.21 billion, respectively. Management indicated year-over-year revenue growth is expected to accelerate each quarter through fiscal 2027, fueled by AI demand.
- Samsara jumped 15% after providing full-year adjusted earnings guidance of 65 to 69 cents per share and revenue between $1.97 billion and $1.98 billion, above the LSEG consensus of 59 cents and $1.92 billion. The telematics software firm also noted its increasing use of AI to automate workflows.
- Guidewire Software gained 4% after second-quarter results exceeded estimates. Adjusted earnings were $1.17 per share on revenue of $359.1 million, compared to analyst expectations of 77 cents and $342 million.
- Cooper Companies dipped 3% despite matching fourth-quarter revenue estimates at $1.02 billion. The medical device maker raised its full-year adjusted earnings guidance to a range of $4.58 to $4.66 per share, above the FactSet consensus of $4.52.
BlackRock Faces Outflow Pressure; Day One Biopharma Surges on Acquisition
Investment management giant BlackRock dropped more than 6% after it limited redemptions in its private credit fund, HPS Corporate Lending Fund, due to a surge in outflows. Withdrawal requests recently represented 9.3% of the fund’s net asset value, highlighting liquidity pressures in the private credit space.
In a significant M&A move, Day One Biopharmaceuticals surged more than 65% after agreeing to be acquired by French drugmaker Servier for $2.5 billion. The deal aims to bolster Servier’s brain tumor treatment portfolio. Day One’s Ojemda is the only FDA-approved monotherapy for low-grade glioma, the most common childhood brain tumor.
Reporting contributions: CNBC’s Pia Singh, Fred Imbert, Scott Schnipper, Christina Cheddar-Berk, and Darla Mercado. Data sources include LSEG, FactSet, and company press releases.
