Nasdaq, S&P 500 slip from record highs as yields and oil rebound
The Nasdaq and the S&P 500 eased from record highs on Wednesday as Treasury yields and oil prices rebounded, keeping investors cautious as they awaited the minutes of the Federal Reserve’s September meeting.
Sentiment turned more cautious as investors reassessed the outlook for interest rates and energy costs. Brent crude was back above the psychologically important $100-a-barrel level as Middle East supply concerns persisted. [O/R]
“We’re seeing a little bit of profit-taking today. The market is very focused on the Fed minutes, but ultimately it’s where oil prices and yields move that will determine the market’s direction today,” said Peter Cardillo, chief market economist at Spartan Capital Securities.
Chip stocks were among the top decliners. Memory chip firm Micron Technology dropped 2.3%, chip giant Nvidia eased 0.7% and the broader Philadelphia chip index fell 2.3%.
Elon Musk’s SpaceX lost 1.7% after a Financial Times report that the rockets-to-AI firm was seeking $40 billion in financing to fund purchases of Nvidia chips.
Eight of the 11 S&P 500 sectors traded lower, with the materials and industrials leading losses.
Energy and healthcare were higher, up 0.6% each.
At 9:43 a.m. ET, the Dow Jones Industrial Average fell 472.21 points, or 0.92%, to 51,049.07, the S&P 500 lost 44.80 points, or 0.56%, to 7,775.04 and the Nasdaq Composite lost 235.16 points, or 0.85%, to 27,364.73.
The yield on 30-year Treasury bonds rose to the highest since 2002, last at 5.72% ahead of the release later in the day of minutes from the US Federal Reserve’s September policy meeting, when policymakers raised interest rates to combat inflation.
Traders widely expect the Fed to hold rates steady at its October meeting, but a December hike remains on the cards, according to the CME FedWatch Tool.
The S&P 500’s equal-weighted counterpart, meanwhile, stands more than 5% away from record highs and the interest-rate-sensitive Russell 2000 small-cap index is down more than 8% from its all-time high.
Focus will likely shift to how corporate America is faring as the third-quarter earnings season kicks off next week, with a number of high-profile financial firms expected to report on Tuesday.
US stocks have been buoyed lately by optimism around the AI trade and expectations of strong corporate earnings, despite higher energy prices and a summer selloff in bond markets that fueled concerns about tighter monetary policy.
