Stocks sold off on Wednesday, pressured by a sharp spike higher in Treasury yields as traders grew worried that a new U.S. budget bill would put even more stress on the country's already large deficit.

The Dow Jones Industrial Average lost 816.80 points, or 1.91% to 41,860.44. The S&P 500 shed 1.61% to 5,844.61. The Nasdaq Composite slid 1.41% to 18,872.64.

The 30-year Treasury bond yield last traded around 5.09%, touching the highest level going back to October 2023. The benchmark 10-year Treasury note yield traded at 4.59%.

Long-dated bonds sold off as traders worried a new budget bill would worsen the U.S. deficit. The measure is expected to pass as lawmakers reach a compromise on state and local tax deductions heading into Speaker Mike Johnson's Memorial Day deadline. Yields spiked even higher after a poor afternoon auction for 20-year debt, raising fears investors may be losing their appetite for funding America's deficits.

"The question now is, from a fiscal perspective, what will the tax bill look like, and will it undo all of the recent fiscal frugality by simply raising the debt level at a slower rate of pace? So I think that's why the 10-year yield is moving higher — because investors are worried that we're really not doing anything to slow the pace of inflation and to reduce the debt," Sam Stovall, CFRA Research chief investment strategist, told CNBC in an interview.

"Now it seems as if there is a greater chance that the tax bill will pass, and that could end up simply continuing to raise the overall debt level," he continued.

Treasury yields had spiked last month as worries over President Donald Trump's tariffs dented confidence in the safe haven status of U.S. debt. The 10-year in April swung from below 3.9% to more than 4.5% in just days. Yields eased from those levels after Trump announced delays on when the levies would take effect.

Target shares dropped 5.2% after the big box retailer cut its full-year sales outlook, with executives citing tariff uncertainty and a backlash to the company's pullback in diversity, equity and inclusion efforts. UnitedHealth was the worst-performing Dow member, losing 5.8% following a downgrade from HSBC. Major tech-related stocks Apple and Amazon also dropped as rates increased.

Wednesday's action comes after a tough session for the three major averages. The S&P 500 ended a six-day win streak, while the Nasdaq saw its first negative day in three.

The major averages have staged sharp recoveries since a sell-off last month that engulfed markets after Trump unveiled steep tariffs on imported goods. The S&P 500 and Nasdaq are up more than 13% and 18%, respectively, in the past month.

"Some [investors] are a little worried that we've gone too far, too fast, and are due for some digestion of recent gains," Stovall added.

Stocks close lower Wednesday

Stocks closed lower Wednesday afternoon.

The Dow Jones Industrial Average lost 816.80 points, or 1.91% to 41,860.44. The S&P 500 shed 1.61% to 5,844.61. The Nasdaq Composite slid 1.41% to 18,872.64.

— Sarah Min

Nike shares fall more than 4% as sneaker giant looks to hike some product prices

Nike shares were down more than 4% heading into the market close after reports revealed some of its priciest sneakers are about to cost a little more.

Like many footwear companies, Nike is grappling with how to cope with tariffs. According to a report in WWD, Nike plans to increase the price of select items by about $2 to $10, beginning in June. The company said it would not change prices for kids' products or any Jordan items, according to the report.

Nike shares have fallen more than 20% since the start of the year.

—Christina Cheddar Berk

Nearly 9 in 10 NYSE stocks falling Wednesday; Nasdaq sees 75% of issues decline

In late trading Wednesday, declining stocks are outpacing advancers 2452 to 259 on the New York Stock Exchange, and by 3336 to 753 on the Nasdaq Stock Market.

Poor breadth is mirrored in the percentage of total shares traded that are falling versus those rising. On the NYSE, declining volume accounts for 87.6% of the total while on Nasdaq the percentage of shares trading lower equals 70.3% of the total.

Composite volume in the final half of trading is just 78% of the past 30 days' daily average on the NYSE and 103.4% on Nasdaq.

— Scott Schnipper

BlackRock rolls out active defense stock ETF as global military spending grows

Defense stocks have been an outperforming group in 2025, and BlackRock on Wednesday debuted a new way for investors to bet on the sector with the iShares Defense Industrials Active ETF (IDEF).

The new fund does have some strategic overlap with iShares' U.S. Aerospace and Defense ETF (ITA) and Cybersecurity and Tech ETF (IHAK), but Jay Jacobs, U.S. head of equity ETFs at BlackRock, told CNBC that clients were asking for this active strategy.

"What we're hearing from clients as well is that the shape of the defense industry is evolving. ... So we really believe is that an active approach to the defense space makes a lot of sense," Jacobs said.

One key difference between IDEF and the $7 billion ITA is international exposure. Some of the new fund's foreign holdings include French aerospace firm Safran and Japanese industrial company Mitsubishi Heavy Industries.

"You look at the Asia region, you look at the Middle East, you look at Europe, you're seeing military spending accelerate in those areas," Jacobs said, adding that there is no target balance between US and international exposure in IDEF.

The new fund will be run by portfolio managers from BlackRock's multi-asset strategies & solutions group and has an expense ratio of 0.55%.

— Jesse Pound

Phillips 66 tumbles as activist investor poised to win board seats

Shares of Phillips 66 tumbled nearly 7% as activist investor Elliot Management is poised to win two board seats at the refiner.

Elliott nominees Sigmund Cornelius and Michael Helm were elected to the board based on a preliminary analysis of the vote, according to a statement from the activist investor.

"Today's vote sends a clear message: Shareholders demand meaningful change at Phillips 66," Elliott said. Cornelius and Helm will work with the board to improved Phillips' operational execution and share price performance, the activist investor said.

Phillips' shares are down about 22% over the past 12 months.

— Spencer Kimball

AMD has fallen out of favor and now looks cheap, Bank of America says

Investors may be forgetting about Advanced Micro Devices, but the chip stock still has plenty of upside, according to Bank of America.

Analyst Vivek Arya reiterated a buy rating on the stock, saying in a note to clients that AMD should benefit from the AI boom even if it is not a true competitor to Nvidia. Investor positioning in the stock also looks relatively light, Arya said.

"AMD's breadth of ownership across large-cap US active fund managers has fallen to only ~23% (vs. May 2024 peak of 40%+ ownership)," while valuation based on projected earnings "seems too compelling for a high-quality compute franchise with consistent management execution," Arya said.

Shares of AMD are down 6% year to date. Bank of America has a price target of $130 per share for the stock, which is 14.5% above Tuesday's close.

— Jesse Pound

BofA hikes price target on this Nvidia derivative play

Nvidia's NVLink Fusion announcement could also benefit Amphenol, according to Bank of America.

Analyst Wamsi Mohan raised his price target on the sensor and antenna maker to $90 from $85. That implies upside of around 5%. Shares have been on fire this year, soaring more than 18%.

"We believe the announcement of NVLink Fusion will be a tailwind to APH estimates. We also believe the preference of CSPs will remain using the traditional NVDA Grace Blackwell 200 & 300s," Mohan wrote.

To be sure, he reiterated his neutral rating on shares, noting that "positives of strong near-term AI trajectory could be somewhat offset by broader macro headwinds."

— Fred Imbert

A 'healthy pause' looks more likely from here rather than a 'significant pullback,' Piper Sandler says

Markets may have closed lower on Tuesday, but Piper Sandler isn't worried that this could segue into a total stock meltdown.

Instead, the investment firm recommended investors carefully parse any selloffs for good buying opportunities.

"The upward momentum is slowing as the S&P 500 nears 6,000, but a healthy pause seems more likely than a significant pullback," Piper Sandler wrote in a Wednesday note. "However, with the strong breadth improvement from deep oversold levels in our proprietary indicators, we expect minor pullbacks and consolidations to set up as good buying opportunities. We suspect the SPX retests YTD highs at 6,147 by mid-summer and ultimately reaches our year-end target at 6,600 later in the year."

— Lisa Kailai Han

Trust the hard data, not the soft data, Barclays says

There's reason to be constructive on U.S. equities, according to Venu Krishna, head of U.S. equity strategy and global equity linked strategies at Barclays Investment Bank.

The strategist expects that the strength in the recent corporate earnings season shows investors can trust the "hard data" showing consumer resilience, rather than the "soft data" showing crumbling consumer sentiment. Hard data refers to economic releases measuring actual results, as compared to the soft data that measures consumer sentiment.

"The magnitude of earnings strength you saw in Q1 has made everybody wake up and realize that at the core the hard data is strong. I think the dilemma we faced was that the soft data and the hard data have been diverging for quite some time," Krishna told CNBC's "Squawk on the Street" on Wednesday. He added: "And I would argue, generally, if you bet against the soft data, you were more right than wrong."

"Even right now, consumer sentiment is very low, inflation expectations are very high. But the reality is, if you look at the consumption in general, it's weakened a little bit, but it's still pretty robust," Krishna continued. "A weaker survey data have not necessarily translated into weaker hard data."

— Sarah Min

Volatility will likely remain elevated going forward, UBS says

Investors looking for relief from high market volatility going forward may be disappointed, according to UBS.

"We expect volatility ahead as investors contend with uncertainty on several fronts," the bank wrote in a Wednesday note.

These fronts include investors continuing to await further news of trade deals, President Donald Trump's proposed tax cuts and a potential delay in the Federal Reserve's rate-cutting program.

— Lisa Kailai Han

8 stocks in the S&P 500 trade at new all-time highs

During Wednesday's session, 10 stocks in the S&P 500 traded at new 52-week highs.

Of these names, eight tickers were trading at new all-time highs, as shown below:

• Netflix trading at all-time high levels back to its IPO in May 2002
• Monster Beverage (formerly Hansen Natural) trading at all-time high levels back to its listing on the NASDAQ in 1992
• Expand Energy trading at all-time highs back through our history to February 2021
• Axon Enterprise trading at all-time highs back to when TASER began trading in May 2001
• GE Vernova trading at all-time highs back to its spin-off from GE in April 2024
• Raytheon Technologies trading at all-time highs back to when the United Technologies name was adopted in 1975
• Trane Technologies trading at all-time high levels back through Ingersoll Rand's history, before its recent merger with Gardner Denver. 
• Corteva trading at all-time highs back to its spin-off from DowDuPont on 5/24/2019

— Christopher Hayes, Lisa Kailai Han

This was Musk's 'mic-drop' moment in CNBC interview, Morgan Stanley says

Elon Musk's wide-ranging interview with CNBC's David Faber on Tuesday included a "mic-drop" moment that investors should pay attention to, according to Morgan Stanley.

Musk said "the only things that matter in the long term are autonomy and Optimus," referring to Tesla's development of self-driving vehicles and humanoid robots.

"We believe events between now and year-end will go some way to convince investors that Tesla is more than a car company," Morgan Stanley analyst Adam Jonas said.

Jonas pointed to Xiaomi's YU7 electric vehicle "which looks like a Ferrari or Aston Martin SUV at the price of a Toyota Camry."

"Then ask yourself if Tesla would be better off introducing more steering-wheel-having EVs," Jonas said.

— Spencer Kimball

Nvidia market cap at $3.35 trillion, close to passing Microsoft as world's most valuable company

Nvidia's total market capitalization stood at $3.35 trillion Wednesday, only $50 billion away from Microsoft, the most valuable company in the world, at nearly $3.40 trillion.

Both megacap tech stocks are on pace to post a fifth weekly gain — the longest fir Nvidia since last October and for Microsoft since last May — but Nvidia has outperformed during that stretch.

Nvidia has soared nearly 42% in the past month while Microsoft is ahead more than 27% in the same span.

— Scott Schnipper, Adrian van Hauwermeiren

See the stocks moving midday

These are some of the stocks moving midday:

• Target — The big-box retailer fell 4% on disappointing first-quarter results. Target also cut its full-year sales outlook, partly blaming falling consumer sentiment and uncertainty about tariffs.
• Toll Brothers — The stock added 2.8% after the homebuilder beat on both the top and bottom lines for its second quarter. Earnings came in at $3.50 per share, topping the $2.83 a share expected from analysts polled by LSEG. Revenue was $2.74 billion, versus the $2.48 billion consensus estimate.
• Palo Alto Networks — The cybersecurity company tumbled 5% after posting a gross margin for the third fiscal quarter that was lower than expected. That overshadowed an better-than-anticipated earnings report on both lines for the quarter.

Click here for the full story.

— Alex Harring

Platinum hits highest level in a year

On Wednesday, platinum's July-dated futures hit a high of 1,070.6. This marked the metal's highest level since May 29, 2024, when it traded as high as 1,071.9.

Platinum could continue to face substantial supply deficits in the near future, while demand for the metal remains strong through the next year.

— Gina Francolla, Lisa Kailai Han

Canada Goose soars 28% on fiscal fourth-quarter beat

Shares of Canada Goose surged more than 28% on Wednesday, after the outerwear manufacturer reported a fiscal fourth-quarter earnings beat.

In its fiscal fourth quarter, Canada Goose reported adjusted earnings of 33 Canadian cents, exceeding the 23 Canadian cents analysts polled by LSEG had expected. The company's revenue of CA$384.6 million, or US$277.1 million, also beat forecasts of CA$356.4 million, or US$256.8 million.

However, Canada Goose pulled its fiscal year 2026 outlook, citing "macroeconomic uncertainty" and "dynamic consumer spending patterns brought on by the unpredictable global trade environment."

Still, the company reiterated its confidence in its brand, solid financial position and ability to adapt to changing circumstances.

— Ali McCadden, Lisa Kailai Han

Crypto stocks climb as bitcoin hits a record high

Bitcoin broke through its January high-water mark to set a new record above $109,000 on Wednesday, helping fuel a rally in crypto-related stocks.

Shares of Coinbase were up 2.7% on the day, while brokerage stock Robinhood climbed 1.5%. MARA Holdings jumped more than 4%.

Bitcoin's high for the day is $109,500, according to Coin Metrics.

— Jesse Pound

Gold paces for best week in over a month

On Wednesday, gold's June-dated futures hit a high of 3,322.5. This marked the precious metal's highest level since May 9, when it traded as high as 3,352.7.

Week to date, gold has risen 3.5%. It is now on pace for its best week since April 11, when it gained 6.89%.

The VanEck Gold Miners ETF (GDX) was up 5.68%, bolstered higher by Aris Mining, New Gold, Eldorado Gold and Equinox Gold, which have all gained at least 8.5% this week.

— Gina Francolla, Lisa Kailai Han

Target CEO says retailer has 'many levers' to pull to mitigate tariff impact

Target CEO Brian Cornell said the big box retailer has many levers to use in mitigating the impact from tariffs, and can use pricing as a last resort.

Those comments come after Target on Wednesday cut its full-year sales outlook, amid ongoing tariff uncertainty, as well as backlash to the company's rollback of its diversity equity and inclusion efforts.

The stock was last down by 4.8%.

— Sarah Min

Natural gas futures hit highest level since May 14

Natural gas' June-dated futures hit a high of 3.513% on Wednesday morning.

This marked their highest level since May 14, when natural gas traded as high as 3.635%.

Similarly, the Euro TTF Natural Gas and UK Natural Gas benchmarks hit their highest levels since early April.

— Gina Francolla, Lisa Kailai Han

Stock open lower, adding to Tuesday's losses

Stocks opened lower across the board on Tuesday.

The S&P 500 lost 0.9%. The Dow Jones Industrial Average shed 362 points, or 0.9%, and the Nasdaq Composite fell 0.7%.

— Lisa Kailai Han

Palo Alto Networks, Target among stocks moving before market open

Check out the companies making headlines before the bell:

• Palo Alto Networks — Shares of the cybersecurity company dipped 3.7% after Palo Alto Network's gross margin for the fiscal third quarter came out below estimates. The company still beat on earnings and revenue expectations, however.
• UnitedHealth — Shares dropped more than 6% after HSBC downgraded the health insurance giant, saying valuations are still elevated despite a recent rout.
• Target — The retailer's stock slipped 3.5% after Target missed first-quarter revenue estimates and cut its full-year sales outlook. Executives blamed tariff uncertainty, weaker discretionary spending and backlash to the company's rollback of key diversity, equity and inclusion efforts for its performance.

For the full list, read here.

— Pia Singh

Home construction ETF pacing for 1st positive month in 4

Home construction stocks have risen this month, boosting the iShares U.S. Home Construction ETF (ITB) up 1.2% in May.

The exchange-traded fund is now pacing for its first positive month in four, led in part by Gibraltar Industries, Beazer Homes USA, Quanex, Floor & Décor and Toll Brothers. All of these aforementioned stocks have risen at least 8% so far on the month.

— Gina Francolla, Lisa Kailai Han

Target cuts outlook, shares slide

Target dipped nearly 2% in the premarket after the company cut its full-year sales outlook. The retailer cited consumer uncertainty around consumer spending due to tariffs and backlash to a rollback of DEI efforts. First-quarter revenue also missed expectations.

— Fred Imbert

Lowe's ticks higher after earnings beat

Lowe's shares were up more than 2% after the home improvement retailer posted first-quarter earnings that beat expectations. The company earned $2.92 per share, topping an LSEG estimate of $2.88 per share. Revenue of $20.93 billion was just below a consensus forecast of $20.94 billion.

— Fred Imbert

Stocks snap win streaks

Tuesday's negative session ended rallies for the three major averages.

The S&P 500 and Dow snapped six- and three-day win streaks, respectively. The Nasdaq Composite notched its first negative session in three.

Read the full recap of the day's moves here.

— Alex Harring

See the stocks moving after hours

These are some of the stocks making the biggest moves in extended trading:

• Toll Brothers — The luxury homebuilder's shares advanced 6% after the company's earnings topped forecasts. Toll Brothers reported earnings of $3.50 per share in the second fiscal quarter, above the consensus estimate of $2.83 per share, according to LSEG. The company posted $2.71 billion in revenue versus a $2.48 billion forecast.
• Take-Two Interactive Software — Shares slid 3% after the video game maker announced a proposed offering of $1 billion in common stock.
• Keysight Technologies — Shares climbed 5%. The electronic test equipment manufacturer reported earnings for the fiscal second quarter that came in above Wall Street consensus forecasts. Keysight posted $1.70 per share, excluding items, on revenue of $1.31 billion, while analysts polled by LSEG had penciled in $1.65 per share and $1.28 billion in revenue.

Click here for the full list.

— Alex Harring

Stock futures are little changed

Stock futures were nearly flat shortly after 6 p.m. ET Tuesday night.

Dow and S&P 500 futures each slipped 0.1%, while Nasdaq 100 futures shed 0.2%.

— Alex Harring