Wall Street investors will be eyeing a positive rebound on Wednesday after stocks drifted lower on New York Stock Exchange (NYSE) and Nasdaq as long-term Treasury yields ticked higher, pressuring the market. S&P, Dow, Nasdaq, and Russell 2000 futures were up.
This comes after S&P 500 fell 0.2 per cent on Tuesday. Dow Jones Industrial Average slipped 0.3 per cent, and the Nasdaq composite fell 0.1 per cent. Stocks have been under pressure as oil prices have swung sharply amid the U.S. war with Iran, helping to push Treasury yields higher. The yield on the 10-year Treasury rose to 5.25 per cent and touched its highest level in 24 years. The price of Brent crude oil fell 1.7 per cent to $96.16 a barrel, but remains far above where it was this summer.
On Tuesday, S&P 500 fell 12.85 points, or 0.2 per cent, to 7,670.84, Dow Jones Industrial Average fell 131.59 points, or 0.3 per cent, to 51,349.92, Nasdaq composite fell 22.84 points, or 0.1 per cent, to 26,797.54, Russell 2000 index of smaller companies fell 9.99 points, or 0.4 per cent, to 2,807.92.
For the week, S&P 500 is down 72.57 points, or 0.9 per cent, Dow is down 478.70 points, or 0.9 per cent, Nasdaq is down 271.18 points, or 1 per cent, Russell 2000 is down 29.63 points, or 1 per cent.
For the year, S&P 500 is up 825.34 points, or 12.1 per cent, Dow is up 3,286.63 points, or 6.8 per cent, Nasdaq is up 3,555.55 points, or 15.3 per cent, and Russell 2000 is up 326.02 points, or 13.1 per cent.
Investors reduced bets on a Federal Reserve interest rate hike next month following comments by Fed Bank of New York President John Williams, while major stock indexes eased as longer-dated yields held near multi-decade highs.
Optimism over AI lab Anthropic's plan to go public limited the weakness in equities along with Williams' comments. Williams said he sees "no urgency" for further action after the US central bank's policy rate increase earlier this month.
Traders now see about a 50-50 chance of quarter-point rate hike at the Fed's upcoming meeting in October, based on pricing of Fed funds futures contracts, down from nearly 70% earlier in the day.
Short-term rate futures contracts are now priced for a single interest-rate hike by year end after Williams said that's what he sees as likely, should the economy play out as he expects.
Still, investors remained anxious about the rate outlook ahead of Wednesday's monthly US personal consumption expenditures price index, with the 30-year US Treasury bond earlier hitting its highest level since June 2002. Also, the monthly US jobs report is due later this week.
