U.S. Stocks Edge Down From Record Highs While Oil Prices Rise Amid Strait of Hormuz Uncertainty
The S&P 500 slipped 0.1% from its record set on Friday. The Dow Jones Industrial Average dipped 60 points (0.1%) and the Nasdaq composite fell 0.3%.
The price for a barrel of Brent crude rose 5% to $87.72. It had swung between $72 and $102 last month as hopes rose and fell that the United States and Iran could reach an agreement that would allow oil tankers to freely exit the Middle East again to deliver crude worldwide. Higher oil prices push inflation upward, and the main event for Wall Street this week will likely be Wednesday?s update on how bad inflation was last month. Economists expect it to show inflation slowed to 3.4% from 3.5% in June. A slowdown would mean less pressure on the Federal Reserve to raise interest rates. Higher rates slow the economy by making it more expensive for U.S. households and companies to borrow money. They would also undercut prices for stocks and other investments.
Weekly report on Friday showed unexpectedly weak hiring across the United States lowered Wall Street?s expectations for an upcoming hike to interest rates. Traders still see a nearly 52% chance the Fed will raise its main interest rate at its next meeting in September, according to data from CME Group.
Berkshire Hathaway is one of the latest companies to deliver a stronger profit for the last quarter than analysts expected, and the company built by legendary investor Warren Buffett said over the weekend that it?s also invested some of its massive pile of cash into stocks under its new CEO, Greg Abel. Berkshire Hathaway has been famous for buying stocks at what it considers low prices, and criticism has been high that U.S. stocks generally look too expensive but when they report strong profits, it helps them look less pricey. Berkshire Hathaway?s stock rose 1.5%.
MarineMax jumped 46.1% after the retailer, marina operator and superyacht services provider said it agreed to sell itself for about $1.5 billion in cash to a portfolio company of Blackstone. Varex Imaging leaped 48.8% after Teledyne Technologies said it would buy the maker of X-ray imaging components for $18.90 per share in cash. Intel helped offset such gains and fell 4.1% after saying it may sell $15 billion of its stock. Such a move would dilute the ownership stakes of shareholders, and Intel said it would likely use the cash for investments to take advantage of the huge spending underway on artificial-intelligence technology.
In stock markets abroad, indexes were mixed in Europe after rising in much of Asia. Japan?s Nikkei 225 jumped 2.1% for one of the world?s bigger moves.
The yield on the 10-year Treasury rose to 4.70% from 4.65% late Friday. That?s up from 3.97% before the war with Iran, and the climb has already sent rates for mortgages and other kinds of loans significantly higher.
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