Bred nedgang på Wall Street

The major stock indices on Wall Street experienced a sharp downturn on Thursday, with the ten-year Treasury yield exceeding 4.95 percent, marking the highest level since November 2023. The US stock market opened lower on Thursday, as a surge in oil prices and rising interest rates dominated the market. Wall Street had been in a three-day losing streak.

Oil prices, measured by the Brent spot, reached $108.04 per barrel, up 6.4 percent since midnight. The decline in oil prices was attributed to reports of the lowest Saudi oil production since 1990. Declines were also seen in several technology and industrial stocks on Thursday. The broad semiconductor index iShares Semiconductor EFT ended down 2.74 percent.

Industrial giant Micron Technology fell 4.9 percent, Intel closed down 5.57 percent, and Nvidia dropped 2.37 percent. One tech stock bucking the trend was Apple, whose share rose 2.99 percent after the launch of a new iPhone. Investment director Leif Rune Rein of Nordea Liv points to the rising interest rates and increasing oil prices as creating "short-term turmoil" in the stock market.

However, he cautions against ignoring the underlying issues. The market has been on a strong run, and corporate earnings have been exceptionally strong. Rising interest rates have been a recurring concern on the list of worries, he notes. It is a concern that is bubbling up and may become a real problem at some point, but it is unclear when.

Rein believes the global economy can handle oil prices at today's levels. "A $100 oil price will not stop global economic growth," he says. But it could get much worse, and the market is likely to react. Nordea Liv has a heavy exposure to stocks in its portfolio. "We are not blind to the issues, but we see a growth pattern that has surprised positively and that corporate earnings have been incredibly strong, really across all regions," Rein explains.

Thursday also brought new inflation data from the US. Producer price index (PPI) rose 0.4 percent in August from the previous month, adjusted for seasonal factors. It was in line with expectations, according to CNBC. In the same month last year, producer prices rose 5.4 percent, 0.1 percentage point higher than expected. The data comes a day before the US consumer price index (CPI) for August, which the Federal Reserve will closely watch ahead of its September interest rate decision.

The Fed's preferred inflation gauge, the personal consumption expenditures (PCE) index, comes after the interest rate decision.