Tech, oil and bonds keep Wall Street off balance
Some sharp reversals kept US financial markets unsteady on Thursday, as oil prices rose and stock indexes finished mixed.
The S&P 500 fell 0.5% for a second straight loss after setting its all-time high. The Dow Jones Industrial Average added 51 points, or 0.1%, and the Nasdaq composite fell 1.3% as technology stocks took particularly hard hits.
Oil prices climb
Stocks felt pressure from a 4.1% rise in the price for a barrel of Brent crude oil, the international standard, to $US104.28. It’s been pinballing between $US96 and nearly $US110 over the last month on uncertainty about when the war with Iran will allow the global energy industry to return to normal.
Brent got to nearly $US106 in the morning before US President Donald Trump sent its price veering after saying “productive discussions” were happening with Iran and that the US military would not attack it before the upcoming US elections in November. That briefly sent Brent toward $US103 before it eventually turned back upward.
Bond yields reverse
Even sharper swings shook the bond market, where yields have been jumping worldwide to their highest levels in years or even decades, threatening to slow the global economy.
The 10-year US Treasury bond yield initially rose with oil prices, going from 5.28% late on Wednesday to 5.35% early on Thursday morning. But it then fell all the way back to 5.23%.
It dropped after the US government said it sold $US22 billion in 30-year Treasury bonds at an auction with a high yield of less than 5.62%. That helped bring the 30-year Treasury yield down to 5.60% from 5.73% in the morning, which is a notable move for the bond market.
A day earlier, an auction of 10-year Treasuries also helped bring down yields. Strong demand there showed investors are still willing to buy US government debt, even though their prices have fallen sharply this year because of worries about high inflation, big government debt loads and other factors.
Tech stocks weigh on Wall Street
On Wall Street, the easing in Treasury yields helped the majority of US stocks rise, including two out of every three in the S&P 500 index.
But drops for several influential technology stocks overshadowed the gains.
Nvidia, the chip company that’s ridden the tidal wave of demand created by artificial intelligence technology, fell 2.9%. Because it’s the largest stock by value on Wall Street, it was the heaviest weight on the S&P 500 even though other stocks had larger losses.
That included drops for other AI-related stocks, including Broadcom’s 4.3% fall and Micron Technology’s 4.8% slide.
The losses came even though a bellwether for the chip industry, Taiwan Semiconductor Manufacturing Co., reported growth for September that suggested its revenue for the latest quarter was strong enough to top analysts’ expectations. TSMC’s stock that trades in the United States fell 3%.
AI stocks are under heavy pressure to report big growth to justify how high their stock prices have soared in recent years because of the AI frenzy.
All told, the S&P 500 fell 36.41 points to 7,765.36. The Dow Jones Industrial Average added 51.77 to 51,231.64, and the Nasdaq composite slid 345.35 to 27,193.34.
Asian and European markets fall
On South Korea’s stock market, Samsung Electronics dropped 2.4% to help drag the Kospi index down 2.6%. The tech giant said its operating profit for the latest quarter likely soared to 107.4 trillion Korean won, roughly $US80 billion, from 12.17 trillion won a year earlier, but that wasn’t enough to satisfy investors.
Indexes also fell across much of the rest of Asia and Europe.