U.S. stocks slumped lower Wednesday trading, following on from the worst single session for stocks since March, as Treasury bond yields resumed their upward march and oil prices surged following a big decline in domestic crude inventories.
The S&P 500 slumped to a fresh June low Tuesday, with big-cap tech stocks leading to the downside, as Treasury yields tested new 2007 highs following another round of hawkish comments from Federal Reserve officials and data suggesting troubling weakness in consumer confidence.
The closely-tracked expectations of the Conference Board's benchmark survey, in fact, fell below the 80 point mark that has historically signaled recession, suggesting the the relentless fun of Fed rate hikes, which have added 500 basis points to borrowing costs, are starting to take their toll on the broader economy.
And with markets betting on more hikes to come, including a 35% chance of a December increase, longer-term Treasury yields are testing new cycle highs, with benchmark 10-year notes hitting 4.632% in mid-day New York trading.
Benchmark 2-year notes, meanwhile, slipped to 5.144% while the dollar index, which tracks the greenback against a basket of six global currencies, was marked 0.56% higher and near the highest levels in a year at 106.825.
The S&P 500, which is down 5.2% for the month, was marked 15 points lower, or 0.35%, in early afternoon trading Wednesday while the Dow Jones Industrial Average fell 275 points. The Nasdaq was down 30 points.
The market's key volatility gauge, the CBOE's Vix index, is also trending north, and was last marked 0.22% higher at a fresh four-month peak of 19.36 points.
Global oil prices were also marching higher following Energy Department showing domestic crude stockpiles fell by 2.2 million barrels last week, with inventories at the key distribution hub in Cushing, Oklahoma, falling to the lowest levels of the year
WTI crude futures for November delivery were last marked $3.66 higher at $94.05 per barrel, while Brent contracts for the same month jumped $2.92 to $96.88 per barrel.
Overnight in Asia, stocks booked modest gains following a better-than-expected reading for industrial profits from China-owned companies, with the MSCI ex-Japan index rising 0.1% into the close of trading.
In Europe, the Stoxx 600 was marked 0.05% lower, and largely tracking moves in U.S. equity futures, while the FTSE 100 edged 0.05% higher in early London trading.
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