Wall Street closed lower on Wednesday, weighed down by energy and healthcare stocks. Inflation worries dominated proceedings. Investors showed a general inclination to wait for further pointers from the Fed on the matter of rate cuts in November. Two of the three most widely followed indexes closed the session in the red, while one closed marginally in the green.
How Did the Benchmarks Perform?
The Dow Jones Industrial Average (DJI) lost 293.47 points, or 0.7%, to close at 41,914.75. Eighteen components of the 30-stock index ended in negative territory, while 12 ended in positive.
The tech-heavy Nasdaq Composite rose 7.68 points, or less than 0.1%, to close at 18,082.21.
The S&P 500 declined 10.67 points, or 0.2%, to close at 5,722.26. Nine of the 11 broad sectors of the benchmark index closed in the red. The Energy Select Sector SPDR (XLE), the Health Care Select Sector SPDR (XLV) and the Materials Select Sector SPDR (XLB) fell 2%, 1% and 0.7%, respectively, while the Utilities Select Sector SPDR (XLU) rose 0.5%.
The fear-gauge CBOE Volatility Index (VIX) increased 0.1% to 15.41. A total of 10.4 billion shares were traded on Wednesday, lower than the last 20-session average of 11.7 billion. Decliners outnumbered advancers by a 2.4-to-1 ratio on the NYSE. The S&P 500 recorded 36 new 52-week highs and two new lows, while the Nasdaq Composite posted 70 new highs and 110 new lows.
Treasury Yields Rise on Inflation Worries
On Wednesday, after a prolonged absence, inflation returned as the root cause behind whatever transpired on Wall Street. Growing a bit weary about the pace at which the Fed might be bringing the rates down, market participants are concerned that inflation might rebound as a result.
The U.S. 10-year treasury yield was trading higher by 4.9 basis points (bps) at 3.784%. Since the announcement of the September rate cut, 10-year yields have risen about 3 bps. Currently, Fed officials think they’ll need to lower interest rates to a range of 4.25-4.50% by year-end, more than they anticipated in June.
Energy Prices Weigh on Markets
Oil prices slid more than 2% on Wednesday as supply concerns in Libya eased while demand concerns over China continued despite the country’s stimulus plans.
Brent crude prices fell $1.71, or 2.27%, to settle at $73.46/barrel. WTI crude slipped $1.87, or 2.61%, to settle at $69.69/barrel.
Consequently, shares of ConocoPhillips COP and Exxon Mobil Corporation XOM lost 2.9% and 2%, respectively. Both currently carry a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Economic Data
Per a government report, for the week ended Sept. 20, U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 4.5 million barrels from the previous week. They had fallen by 1.6 million barrels in the week prior.
The U.S. Census Bureau and the U.S. Department of Housing and Urban Development jointly reported that sales of new single-family houses in August 2024 came in at a seasonally adjusted annual rate of 716,000 compared to the consensus of 700,000. The number for July has been revised up to 751,000 from the previously reported 739,000.
Infrastructure Stock Boom to Sweep America
A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made.
The only question is “Will you get into the right stocks early when their growth potential is greatest?”
Zacks has released a Special Report to help you do just that, and today it’s free. Discover 5 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.
Download FREE: How To Profit From Trillions On Spending For Infrastructure >>Exxon Mobil Corporation (XOM) : Free Stock Analysis Report
ConocoPhillips (COP) : Free Stock Analysis Report
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
