Major U.S. stock indices closed lower on Wednesday, a day after the S&P 500, Nasdaq Composite and Nasdaq 100 hit record levels, as long-dated Treasury yields resumed climbing. A strong 10-year note auction failed to pull yields down, while Federal Reserve minutes showed a split over the rationale behind September's rate hike, even as most policymakers still see another increase likely by year-end.
Major U.S. stock indices closed lower on Wednesday, a day after the S&P 500, Nasdaq Composite and Nasdaq 100 all finished at record levels. The S&P 500 and Dow snapped four-day winning streaks. The Nasdaq Composite posted its first down day in six.
Dow, S&P and Nasdaq retreat from records
The Dow fell 342.01 points, or 0.66%, to 51,184.13. The S&P 500 lost 17.19 points, or 0.22%, to 7,801.73. The Nasdaq Composite dropped 61.10 points, or 0.22%, to 27,538.69.
Russell 2000, the small-cap benchmark, was the weakest performer, declining 1.31% to 2,793.2105. Within the S&P 500, industrials suffered the steepest percentage drop, while healthcare stocks led the gainers.
Yields rise despite a strong 10-year auction
Treasury yields moved in mixed directions. The two-year yield fell 2.07 basis points to 4.7703%, but the 10-year rose 1.60 basis points to 5.2816% and the 30-year climbed 2.12 basis points to 5.6622%.
The Treasury's $39 billion 10-year note auction cleared at 5.300%, compared with a pre-auction yield of 5.317%. The sale drew a bid-to-cover ratio of 2.77 times, with indirect bidders taking 80.34% of the supply. Even so, the 10-year yield closed higher on the day.
Fed minutes show division over the September hike
Minutes from the Federal Reserve's September meeting showed most participants assessed that another rate hike would likely be appropriate by year-end. The minutes also revealed divisions over the rationale for that meeting's increase: some participants saw it as necessary to offset energy price shocks, while others viewed it as needed to curb demand-driven inflation, according to Reuters.
Markets now price a 17.2% chance of a second rate hike in October, down from 37.6% a week earlier, according to CME's FedWatch tool. Thomas Martin, senior portfolio manager at GLOBALT in Atlanta, said: "October will be a pause."
Sources: investingLive, Investing.com
Trading involves risk.
Risk Disclaimer
