Oil down, but stocks lower as bond yields rise ~ EconomyLens.com

New York (AFP) – US and European stocks traded mainly lower Tuesday despite oil prices retreating from a recent surge, as bond yields pushed higher and investors waited for key inflation data. The US 30-year Treasury yield touched 5.62 percent, a level not seen for 24 years, while the benchmark 10-year yield stood at 5.25 percent, remaining at its highest level since 2007.

“While energy prices pulled back a bit today, yields did not,” Art Hogan, from B. Riley Wealth Management, told AFP. “Higher yields continue to pose a significant headwind for investors. And that’s been true not just today, but for the last month or so.”

The Dow Jones fell 0.26 percent, the Nasdaq index dropped 0.09 percent, and the broader S&P 500 index lost 0.17 percent. Investors are braced for the PCE — the Federal Reserve’s preferred inflation gauge — out on Wednesday as well as official jobs numbers on Friday. Offering some support for stocks, the president of the Federal Reserve Bank of New York said Tuesday that the US central bank does not need to raise interest rates with “urgency,” although a further increase may be required late this year. The Fed raised the key interest rate for the world’s largest economy earlier this month, increasing it by 25 basis points to combat stubbornly high inflation.

Oil prices had jumped Monday, but reversed course after President Donald Trump said he expected talks with Iran to develop, as well as reports that considerable volumes are continuing to flow from the region. Crude’s current slide “reflects growing hopes that Middle East tensions can ease, while the restoration of Saudi pipeline flows is helping offset disruption through the Strait of Hormuz,” said IG analyst Axel Rudolph. The benchmark US crude contract WTI was trading around $89 per barrel on Tuesday while its international equivalent, Brent crude, was above $102 per barrel. Briefing.com analyst Patrick O’Hare said oil prices were “reacting favorably to a report that oil exports out of the Middle East hit a post-war high.”

Main indices were lower also on sentiment hit by data showing US consumer confidence plunged sharply in September to a level not seen since 2014. In Europe, London and Paris both finished in the red but Frankfurt ended the day with a small gain. Trump on Tuesday said tech executives gathered at the White House to discuss AI had signed a “morally binding” commitment to build safeguards on the fast-moving technology. “They’re going to police themselves,” Trump said after the meeting that included Nvidia’s Jensen Huang.

Tech stocks were mixed, as Nvidia fell 0.72 percent and Google parent Alphabet lost 0.53 percent, while Meta (Facebook, Instagram) gained 3.24 percent and Amazon rose 0.21 percent.

– Key figures at around 2030 GMT –

New York – Dow: DOWN 0.26 percent at 51,349.92 points (close)

New York – S&P 500: DOWN 0.17 percent at 7,670.84 (close)

New York – Nasdaq Composite: DOWN 0.09 percent at 26,797.54 (close)

London – FTSE 100: DOWN 0.5 percent at 10,636.71 (close)

Paris – CAC 40: DOWN 0.6 percent at 8,027.33 (close)

Frankfurt – DAX: UP 0.1 percent at 25,399.21 (close)

Tokyo – Nikkei 225: DOWN 0.6 percent at 65,481.27 (close)

Hong Kong – Hang Seng Index: DOWN 0.5 percent at 24,523.57 (close)

Shanghai – Composite: UP 0.2 percent at 3,830.45 (close)

Brent North Sea Crude: DOWN 2.56 percent at $102.59 per barrel

West Texas Intermediate: DOWN 3.48 percent at $89.38 per barrel