Treasury yields weigh on stocks
Stocks closed modestly lower on Wall Street on Tuesday as another increase in long-term US Government Treasury bond yields weighed on the market.
The S&P 500 slipped 0.2% after wavering between modest gains and losses for much of the day. The Dow Jones Industrial Average dropped 0.3%, and the Nasdaq Composite fell 0.1%.
Major indexes shifted lower after a quiet morning as rising bond yields undercut much of the heavy lifting being done by several technology behemoths. Nvidia, the market's most influential stock, gave up an early gain and closed 0.7% lower. Broadcom rose 1.6%.
Stocks remain under pressure as oil prices swing sharply as the war between the US and Iran drags on, helping to push Treasury yields to their highest levels in 24 years.
Oil prices remain volatile
The price of Brent crude oil in the most actively traded part of the oil market fell 1.7% to settle at $US96.16 a barrel. It briefly climbed above $US100 on Monday before prices eased a bit, but it is still well above the roughly $US72 it cost before the US and Israel attacked Iran in late February.
Mediators continued to work with the United States and Iran on reaching a deal to end the fighting and open the Strait of Hormuz. US President Donald Trump over the weekend rejected an offer from Tehran to reopen the key waterway.
Energy stocks had some of the broadest losses. Exxon Mobil fell 0.7%.
Overall, rising oil prices have been fuelling a jump in Treasury yields. Higher yields threaten to slow economic growth by making borrowing more expensive for individuals and businesses. They can also hurt prices for stocks, especially those seen as expensive, including many technology companies that have soared because of the frenzy around AI technology.
The yield on the 10-year Treasury rose to 5.25% from 5.24% late on Monday. It reached 5.28% earlier on Tuesday, touching its highest level since 2002, according to Tradeweb.
All told, the S&P 500 fell 12.85 points to 7,670.84. The Dow dropped 131.59 points to 51,349.92, and the Nasdaq gave up 22.84 points to close at 26,797.54.
Markets in Europe ended mixed and markets in Asia closed mostly lower.
With only one day left in September, the S&P 500 is on pace for a slight monthly loss after posting a 2.6% gain in August. The benchmark index is up 12.1% so far this year.
Jobs and inflation data in focus
Wall Street will see several big economic updates this week that could help investors and the Federal Reserve get a better sense of where inflation is headed and how households and businesses are dealing with high prices.
The latest update on the jobs market on Tuesday showed that US employers posted fewer job openings in August. The Labor Department's monthly report said they slid to 7.08 million openings, marking a drop from July and registering below what economists had forecast. It also showed that layoffs fell and fewer people are quitting their jobs.
The jobs market has been resilient even as stubbornly high inflation squeezes businesses and households. Wall Street will get a broader update on Friday, when the US releases its monthly employment report for September.
Households have been facing higher prices on everything from petrol to clothing as the war between the US and Iran curtails oil shipments through the Strait of Hormuz. The latest update on consumer confidence from business group The Conference Board shows a slump in September. Consumer confidence dipped to its lowest level in 12 years.
Stubbornly high inflation has been sapping consumer confidence and pressuring the Fed, which recently raised its benchmark interest rate in an effort to cool prices. The latest update of the central bank's preferred measure of inflation will be released on Wednesday. Economists expect the personal consumption expenditures index, or PCE, to show that the rate of inflation rose 3.7% in August, matching July's reading.
Inflation rates have remained stubbornly above 3% most of the year and that's well above the Fed's target rate of 2%. Wall Street expects the central bank to raise its benchmark interest rate again at its next meeting in October.
