18 hrs ago
Wall Street Slips as Treasury Yields Climb From Record Highs
U.S. stocks finished lower after government bond rates went up.
The rate on 30-year Treasury bonds reached its highest level in 24 years.
Higher oil prices and concerns about inflation and debt worried investors.
Oil briefly rose above $100 a barrel, then turned lower after an international agency agreed to speed up the release of oil stocks.
Minutes from the Federal Reserve showed that officials had different reasons for supporting a recent rate increase.
Markets now see a lower chance of another increase at the Fed's October meeting than they did a week earlier.
Chip stocks fell, and SpaceX shares declined after reports about a possible large financing effort.
Investors are also preparing for company earnings reports and watching whether spending on AI is paying off.
All three major U.S. stock indexes ended lower as long-term Treasury yields climbed.
The 30-year Treasury yield reached a 24-year high, while Brent crude briefly rose above $100 per barrel.
Federal Reserve meeting minutes showed differing views on whether a rate hike was needed to contain energy shocks or demand-driven inflation.
Chip stocks fell, and SpaceX shares retreated after reports that the company was seeking $40 billion in financing to buy Nvidia chips.
The S&P 500 fell 0.23%, the Nasdaq lost 0.24%, and the Dow dropped 0.69%.
- Who
- U.S. stock investors, the Federal Reserve, and companies including SpaceX.
- What
- Major U.S. stock indexes fell as long-term Treasury yields rose.
- Where
- U.S. financial markets.
- When
- Wednesday, October 7; the article does not specify a year.
- Why
- Rising Treasury yields, oil-price-driven inflation concerns, and worries about debt weighed on markets.
One view
Another view
Why the Fed raised rates
One view
Some meeting participants viewed a rate hike as necessary to keep energy-price shocks from affecting the economy.
Another view
Other participants believed a hike was needed to curb demand-driven inflation.
Near-term market outlook
One view
Rising yields, oil prices, and inflation concerns added pressure to stocks and prompted some investors to consider taking profits.
Another view
Stocks pared some losses after oil prices turned lower, and market pricing indicated a reduced likelihood of another rate hike at the October meeting.
Key facts
- S&P 500
- Finished at 7,801.15, down 17.78 points or 0.23%.
- Nasdaq Composite
- Finished at 27,533.39, down 66.50 points or 0.24%.
- Dow Jones Industrial Average
- Finished at 51,165.37, down 355.91 points or 0.69%.
- 30-year Treasury yield
- Touched a 24-year high.
- Brent crude
- Briefly moved above $100 per barrel before turning lower.
- Fed rate expectations
- Markets priced in less than a 20% chance of a second consecutive rate hike at the October meeting, down from 37.6% a week earlier.
- S&P 500 earnings outlook
- Analysts expected aggregate year-on-year earnings growth of 30.6% for the July-through-September quarter, according to LSEG.
Quotes
Thomas Martin
Senior portfolio manager at GLOBALT in Atlanta
“The third quarter was supposed to be the weak quarter of the year; we were supposed to get a correction. That didn't happen, so it's three cheers and let's take some money off the table.”
livemint.com
“There's still an expectation for more rate hikes, but it isn't necessarily going to be a hike every meeting and that's what the market is telling you; October will be a pause.”
livemint.com
Sources
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