US stocks: Wall Street ends down as oil prices, Treasury yields rise

Wall Street saw a decline on Wednesday, Sep 23, as Alphabet and Amazon stocks dropped, driven by rising Treasury yields and Iran's president asserting that Tehran would not yield to US pressure. Oil prices surged nearly 4 percent, and the S&P 500 energy sector index climbed after Iranian President Masoud Pezeshkian's UN speech, following US President Donald Trump's warning about potential US actions against Iran.

Businesses in the US showed a more than five-year high in September activity, contributing to higher government bond yields and heightened expectations of increased Federal Reserve interest rates at their October meeting. The 2-year and 10-year Treasury yields reached their highest levels since 2024 and 2007, respectively. Lauren Cassidy, a chief investment officer, noted that the market is seeking a resolution to the Middle East conflict; otherwise, higher rates could continue to impact equities.

Meta Platforms gained 1 percent, reaching a 12 percent increase this week due to positive reception for its "Muse" AI assistant. Alphabet and Amazon experienced drops of 3.8 percent and 2.2 percent, respectively, with Nvidia also down 1.5 percent. Expedia and Airbnb both experienced declines of over 7 percent. The Nasdaq recorded record-high closes in the previous two sessions, despite Wall Street's general optimism about AI-related companies.

The S&P 500 closed 0.75 percent lower at 7,706.05 points, while the Nasdaq ended at 26,936.04 points, and the Dow Jones Industrial Average finished at 51,511.59 points. Nine out of the 11 S&P 500 sector indexes declined, led by utilities, which dropped 1.72 percent, followed by a 1.49 percent loss in communication services. Trading volume on US exchanges was notably high, with 17.0 billion shares exchanged, compared to an average of 16.5 billion shares over the past 20 sessions.

The S&P 500 is trading at 19 times expected earnings, its lowest valuation since 2023, according to LSEG data. Following comments from Federal Reserve Governor Michael Barr, traders now believe there is a 71 percent chance of interest rate hikes at the Fed's upcoming meeting, as inflation remains above the 2 percent target. Casual dining chain Cracker Barrel reported a 4.5 percent increase in shares after surpassing fourth-quarter sales estimates.

Paychex, an HR and payroll services provider, fell 8.8 percent after its largest segment missed first-quarter revenue estimates. More stocks declined than rose within the S&P 500, with a 1.9-to-1 ratio, posting 14 new highs and 33 new lows. The Nasdaq recorded 41 new highs and 186 new lows.