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U.S. stocks closed lower on Wednesday as oil prices hit a three-month high and the 10-year Treasury yield rose above the 3% level, igniting fears among investors ahead of the release of the all-important inflation data. All the major indexes ended in negative territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) shed 0.8% or 269.24 points to close at 32,910.90 points.
The S&P 500 fell 1.1% or 44.91 points to end at 4,115.77 points. Almost all the sectors except for energy ended up being losers.
The Energy Select Sector SPDR (XLE) gained 0.2%. However, the Real Estate Select Sector SPDR (XLRE) and the Material Select Sector SPDR (XLB) declined 2.4% and 2.1%, respectively. The Technology Select Sector SPDR (XLK) lost 1.1%. Ten of the 11 sectors of the benchmark index ended in negative territory.
The tech-heavy Nasdaq shed 0.7% or 88.96 points to finish at 12,086.27 points.
The fear-gauge CBOE Volatility Index (VIX) was down 0.25% to 23.96. Decliners outnumbered advancers on the NYSE by a 2.78-to-1 ratio. On Nasdaq, a 1.33-to-1 ratio favored declining issues. A total of 10.62 billion shares were traded on Wednesday, lower than the last 20-session average of 12.26 billion.
Investors Worry Ahead of Key Inflation Data
Markets failed to build on the gains made earlier this week, as investors worried ahead of the release of the key inflation data. Investors have already been worrying about Fed’s stance toward putting a check on soaring inflations. They now fear that the Fed’s aggressive monetary policy could end up in an economic slowdown.
A report from the Labor Department last week showed that the U.S. economy added 390,000 jobs in May. Following that, investors are further worried that the Fed will continue to go for steep rate hikes in the coming days, which may hamper the economy’s growth.
Despite these worries, markets ended in the green on the first two days of the week but stocks tumbled once again on Wednesday.
Worries were further fanned by the forecast made by the Organization for Economic Cooperation and Development. The organization cut its global economic growth forecast for 2022 to 3% from its earlier prediction of 4.5%. This further took a toll on stocks.
Energy Prices Soar, Treasury Yields Rise
Oil prices have been on the rise over the past few months, particularly since Russia’s invasion of Ukraine. On Tuesday, crude oil prices finally hit a three-month high, with a 2.3% jump to end at $122.11 per barrel. The jump came after government data showed a steep decline in gasoline inventories.
However, the rise in oil prices impacted the broader market, with stocks ending up losing.
Also, the 10-year Treasury yield rose above the psychological mark of 3% after rising 5.9 basis points to close at 3.028%. This saw high-growth tech stocks once again taking a hit. Shares of Microsoft Corporation (MSFT - Free Report) declined 0.8%, while Apple Inc. (AAPL - Free Report) lost 0.5%.
Economic Data
Not much economic data was released on Wednesday as investors are eagerly awaiting the inflation data.
The Mortgage Bankers Association said that mortgage demand declined to its lowest level in 22 years last week.
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Stock Market News for Jun 9, 2022
U.S. stocks closed lower on Wednesday as oil prices hit a three-month high and the 10-year Treasury yield rose above the 3% level, igniting fears among investors ahead of the release of the all-important inflation data. All the major indexes ended in negative territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) shed 0.8% or 269.24 points to close at 32,910.90 points.
The S&P 500 fell 1.1% or 44.91 points to end at 4,115.77 points. Almost all the sectors except for energy ended up being losers.
The Energy Select Sector SPDR (XLE) gained 0.2%. However, the Real Estate Select Sector SPDR (XLRE) and the Material Select Sector SPDR (XLB) declined 2.4% and 2.1%, respectively. The Technology Select Sector SPDR (XLK) lost 1.1%. Ten of the 11 sectors of the benchmark index ended in negative territory.
The tech-heavy Nasdaq shed 0.7% or 88.96 points to finish at 12,086.27 points.
The fear-gauge CBOE Volatility Index (VIX) was down 0.25% to 23.96. Decliners outnumbered advancers on the NYSE by a 2.78-to-1 ratio. On Nasdaq, a 1.33-to-1 ratio favored declining issues. A total of 10.62 billion shares were traded on Wednesday, lower than the last 20-session average of 12.26 billion.
Investors Worry Ahead of Key Inflation Data
Markets failed to build on the gains made earlier this week, as investors worried ahead of the release of the key inflation data. Investors have already been worrying about Fed’s stance toward putting a check on soaring inflations. They now fear that the Fed’s aggressive monetary policy could end up in an economic slowdown.
A report from the Labor Department last week showed that the U.S. economy added 390,000 jobs in May. Following that, investors are further worried that the Fed will continue to go for steep rate hikes in the coming days, which may hamper the economy’s growth.
Despite these worries, markets ended in the green on the first two days of the week but stocks tumbled once again on Wednesday.
Worries were further fanned by the forecast made by the Organization for Economic Cooperation and Development. The organization cut its global economic growth forecast for 2022 to 3% from its earlier prediction of 4.5%. This further took a toll on stocks.
Energy Prices Soar, Treasury Yields Rise
Oil prices have been on the rise over the past few months, particularly since Russia’s invasion of Ukraine. On Tuesday, crude oil prices finally hit a three-month high, with a 2.3% jump to end at $122.11 per barrel. The jump came after government data showed a steep decline in gasoline inventories.
This sent energy stocks on a rally. Shares of Exxon Mobil Corporation (XOM - Free Report) gained 1.2%, while Chevron Corporation (CVX - Free Report) increased 0.5%. Chevron has a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
However, the rise in oil prices impacted the broader market, with stocks ending up losing.
Also, the 10-year Treasury yield rose above the psychological mark of 3% after rising 5.9 basis points to close at 3.028%. This saw high-growth tech stocks once again taking a hit. Shares of Microsoft Corporation (MSFT - Free Report) declined 0.8%, while Apple Inc. (AAPL - Free Report) lost 0.5%.
Economic Data
Not much economic data was released on Wednesday as investors are eagerly awaiting the inflation data.
The Mortgage Bankers Association said that mortgage demand declined to its lowest level in 22 years last week.