Stocks Stabilize as Crude Oil Prices and Bond Yields Ease
The S&P 500 and Dow Jones rose modestly on Tuesday as crude oil prices fell and bond yields dropped. US Energy Secretary Wright reported that over 17 million barrels of oil traveled through the Strait of Hormuz, alleviating supply worries. This caused the 10-year Treasury yield to fall to 4.79%, supporting stock prices. The ADP employment report showed a smaller-than-expected increase in jobs, which was slightly weaker than anticipated.
Global bond yields remained elevated after US-Iran tensions heightened oil prices and raised inflation concerns. The Nasdaq 100 suffered from weakness in cybersecurity stocks. Mortgage applications rose, but the mortgage rate increased slightly. Q2 earnings growth is expected to be strong, with most S&P 500 companies reporting earnings above estimates.
The Fed is likely to raise rates by 25 basis points at their meeting on September 15-16, according to market expectations.
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