U.S. stock indexes fell on Wednesday as Brent crude climbed past $100 a barrel and Treasury yields hit their highest level since 2023, pressuring equities ahead of this week's inflation data. Meta bucked the slide, jumping after unveiling a long-touted autonomous AI assistant, while Apple slipped ahead of its first product launch under new CEO John Ternus.
Oil surge drags indexes lower
The Dow Jones Industrial Average fell 397.51 points, or 0.75%, to 52,390.60 at 11:53 a.m. ET on Wednesday. The S&P 500 shed 34.18 points, or 0.45%, to 7,639.34, while the Nasdaq Composite lost 163.17 points, or 0.62%, to 26,258.24.
Brent crude pushed above the market-sensitive $100-a-barrel mark on Wednesday as Middle East tensions flared in what is now the seventh month of the U.S.-Iran war. The energy index was the only sector in the green on the S&P 500, advancing 0.95%.
According to Reuters: "they are taking the wind out of stocks", said Peter Cardillo, chief market economist at Spartan Capital Securities.
Yields climb as Treasury boosts bond buybacks
The yield on the benchmark 10-year Treasury note rose to its highest level since November 2023 after the Treasury Department said it would buy government bonds. The Treasury said it would buy up to $6 billion in 10-to-20-year bonds, more than the $4 billion it had previously signaled. Higher yields on risk-free government bonds typically make equities less attractive by comparison, adding further pressure to the indexes.
Elsewhere in tech, Nvidia dropped 0.60% and Alphabet fell 2.54%, while Apple dropped 1.1% ahead of its first launch event under new CEO John Ternus, where the company is expected to unveil a folding iPhone. Meta climbed 5.95%, stemming broader declines on the S&P 500 after the company rolled out an AI assistant that can autonomously send emails, sell a car, or make travel bookings on behalf of users.
Inflation data looms over next week's Fed decision
The Consumer Price Index report is due Friday and Producer Price Index data Thursday, both in focus for clues on the Federal Reserve's inflation-driven rate path. Markets currently price a 62.4% chance of a 25-basis-point rate increase at next week's meeting, according to CME's FedWatch data.
Declining issues outnumbered advancers by a 2.93-to-1 ratio on the NYSE and by a 2.62-to-1 ratio on the Nasdaq. The S&P 500 posted six new 52-week highs and 20 new lows, while the Nasdaq Composite recorded 23 new highs and 121 new lows.
Source: Economy News (investing.com)
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