U.S. Stocks Edge Lower as Rising Oil Prices and Treasury Yields Pressure Markets
The S&P 500 fell 0.5% but remains near its all-time high set Thursday. The Dow Jones Industrial Average dropped 272 points (0.5%) and the Nasdaq composite slipped 0.3%.
Last month alone, Brent zigzagged between $72 and $102 as hopes rose and fell that the United States and Iran could reach a deal that would allow oil tankers to freely exit the Persian Gulf again.
A report last week said that shoppers surprisingly spent less at U.S. retailers last month than in June and CEOs for retailers could give color this week on what they?re seeing. L3Harris Technologies fell 4.6% after the defense company said Christopher Kubasik stepped down as its CEO and chairman. Alphabet dipped 0.5% even though Berkshire Hathaway said it increased its investment in Google?s parent company, along with several homebuilders. Constellation Brands fell 6.2% after Berkshire said it sold all its holdings in the seller of Modelo beer and Robert Mondavi wine.
In stock markets abroad, indexes dipped in Europe following a stronger finish in Asia. Tokyo?s Nikkei 225 rose 0.7% after a report said Japan?s economy grew at a slower pace in the April-June quarter than economists expected. Indexes jumped 1.3% in Hong Kong and 1.4% in Shanghai for some of the world?s biggest moves.
Monday?s rally for oil prices sent Treasury yields in the bond market higher which in turn raised the pressure on the economy and prices for all kinds of investments. The yield on the 10-year Treasury climbed to 4.72% from 4.68% late Friday. It has shot up from just 3.97% before the war with Iran, largely because higher oil prices are worsening inflation and upping the probability that the Federal Reserve will have to hike interest rates.
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