The S&P 500 fell Wednesday alongside the Dow and Nasdaq as Brent crude and Treasury yields climbed together, with markets reading the oil rebound as a sign that Middle East tensions and stalled US-Iran talks are far from resolved. Traders now price a 71% chance of a Fed rate hike next month, and sector breadth on the index turned broadly negative.
Wall Street's three main indexes fell in tandem Wednesday. The S&P 500 lost 41.98 points, or 0.54%, to 7,722.66, the Dow Jones Industrial Average fell 279.08 points, or 0.54%, to 51,585.28, and the Nasdaq Composite dropped 250.05 points, or 0.92%, to 26,994.22.
Oil and yields climb together
Brent crude rebounded to about $100.50 a barrel. The benchmark had climbed more than 3% after five straight declining sessions, bouncing off a near two-week low. The move tracked ongoing friction between the US and Iran: Iranian President Masoud Pezeshkian told the UN that Tehran would never surrender to Washington, a day after President Donald Trump threatened to "annihilate" Iran.
Bond markets moved the same way. Yields on 10-year Treasury notes hit their highest level since 2007. The 10-year yield climbed 10 basis points to 5.07%, a level last touched in July 2007. Higher borrowing costs and pricier oil together weighed on equities.
Fed odds firm after Barr's remarks
Traders are now pricing in a 71% chance of a rate hike of at least 25 basis points next month, the CME Group's FedWatch Tool showed. The bets followed comments from Federal Reserve Governor Michael Barr, who said the central bank will likely need to deliver further interest rate hikes as inflation stays north of its 2% target.
A separate survey added to the case for tighter policy: US business activity rose to 57 in September from 53.9 in August, beating economists' forecast of 53.6.
Breadth turns negative
Eight of the S&P 500's 11 sectors traded lower, with utilities leading the declines, down 1.6%. Decliners outnumbered advancers by a 2.92-to-1 ratio on the NYSE, and the index logged 14 new 52-week highs against 31 new lows.
Sources: Crypto Briefing, Economy News, Investor's Business Daily
Trading involves risk.
Risk Disclaimer
