US stocks close lower as oil spikes and the benchmark Treasury yield breaches 5%
The Dow Jones Industrial Average fell 328.09 points, or 0.63 per cent, to 52,093.11, the S&P 500 lost 34.25 points, or 0.45 per cent, to 7,585.73.
On September 15, Wall Street endured its second consecutive day of declines, as a combination of factors dampened investor sentiment. The Federal Reserve's forthcoming decision on interest rates, coupled with escalating concerns over inflation fueled by surging crude prices and the Middle East conflict, weighed heavily on the market's appetite for risk.
Major US stock indexes extended their losses from the previous day, with the energy sector being the sole exception. Peter Tuz, president of Chase Investment Counsel, opined that the combination of higher fuel costs, looming rate hikes, and apprehensions surrounding the AI sector's trajectory warranted caution. The central bank's meeting, slated for September 16, was expected to see a 25-basis-point rate increase, marking the first hike in over three years, despite economic indicators suggesting a relatively stable labor market.
The war-induced rise in energy prices and the prospect of additional rate hikes elevated the likelihood of a 94.5% probability for a Fed funds rate hike on the scheduled day. As oil prices surged alongside the benchmark US Treasury yields, breaching the 5% threshold, the market's focus shifted towards the potential impact on heavily indebted borrowers and the semiconductor industry, which saw a decline in trading activity.
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