Newzstock market is slipping Tuesday as oil prices and the bond market crank up the pressure on Wall Street.The S&P 500 fell 0.4%. The Dow Jones Industrial Average was down 506 points, or 1%, as of 10:30 a.m. Eastern time, and the Nasdaq composite was 0.6% lower.They felt pressure as the yield on the 10-year Treasury, which is the centerpiece of the U.S.
bond market, climbed to 5.01% from 4.97% late Monday. It's been jumping to its highest level in years, and Monday was the first time it breached the 5% level since 2023.Higher yields mean everyone from the U.S. government to households to businesses must pay more in interest to borrow money, which slows the overall economy.
They also make people less willing to pay high prices for stocks because they can earn more from sitting in bonds, which are considered safer investments.“The result is a market that must work harder to generate earnings growth just as investors become less willing to pay premium valuations for that growth,” according to Darrell Cronk, president of Wells Fargo Investment Institute.The last time the 10-year yield was consistently above 5% was around the turn of the millennium, and it's been a long march back since bottoming out below 0.50% in 2020. It's picked up speed since February, after the war with Iran sent oil prices much higher.That raised worries about high inflation potentially lasting for years, which are layering on top of longstanding concerns about the U.S. government’s massive debt level and other issues.Oil prices rose further Tuesday following several sharp swings in the morning.
The price for a barrel of Brent crude, the international standard, climbed 1.7% to $107.49 after flipping between $105.10 and $108.43 earlier in the day.It remains well above its $72 level from early July and from before the war with Iran began in February, as doubt continues about whether the United States and Iran can reach an agreement that would allow oil tankers to freely exit the Persian Gulf through the Strait of Hormuz.Inflation remains high enough that the widespread expectation is that the Federal Reserve will announce on Wednesday that it will hike the federal funds rate for the first time in three years.Traders are still betting on a slight chance that the Federal Reserve could hold off on hiking interest rates, though. If it does, the market could swing because i… NEW YORK (AP) — Artificial-intelligence stocks are holding a bit steadier Tuesday following their worldwide slide the day before, as Wall Street drifts lower in the countdown to a decision coming from the Federal Reserve.The S&P 500 slipped 0.2%.
The Dow Jones Industrial Average was down 289 points, or 0.6%, as of 9:35 a.m. Eastern time, and the Nasdaq composite was 0.3% lower.The main event for the market is coming Wednesday, when the Fed will announce its latest decision on what it will do with interest rates. The widespread expectation is that it will hike the federal funds rate for the first time in three years to try to rein in the still-high inflation grinding on Americans.Such a move could remove fuel that’s allowed inflation to remain above 3%.
But it would do so by inflicting pain on the economy in the short term, making it more expensive for U.S. households and businesses to borrow money. Higher rates also tend to undercut prices for stocks and other investments.Worries about high inflation, along with longstanding concerns about the U.S.
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