Business

Stocks open lower in choppy trades as oil prices fluctuate around $121 a barrel

US stock indexes opened lower on Wednesday as bond yields remained elevated and oil prices surged towards $121 a barrel.

  • The Dow Jones Industrial Average lost 226 points, or 0.7%, to 32,963

  • The S&P 500 fell 19 points, or 0.5%, to 4,131.

  • The Nasdaq Composite fell 10 points, or 0.1%, lower to 12,163.

On Tuesday, the Dow Industrials DJIA
rose 264.36 points, or 0.8%, to close at 33,180.14. The S&P 500 SPX
rose 1% to 4,160.68. The Nasdaq Composite COMP
gained 113.86 points, or 0.9%, to finish at 12,175.23.

What moves the markets?

Continuing Tuesday’s gains could be a tough task for US stocks as Treasury yields and oil prices rise and investors eye Friday’s May CPI data. Wholesale Inventory Levels is the only data available for Wednesday and is due at 10:00 am EST.

The Organization for Economic Co-operation and Development lowered its forecast for global economic growth this year to 3% from 4.5% and forecast growth to slow to 2.8% in 2023 as it weathered “a series of new adverse shocks”. Russia’s invasion of Ukraine and China’s COVID-related lockdowns.

The OECD forecast comes close to the 2.9% growth forecast for this year by the World Bank on Tuesday.

“The striking contrast between the bearish global growth outlook and central banks’ push to tighten monetary policy could cause a significant headache for stock pickers,” said Stephen Innes, managing partner at SPI Asset Management.

Read: Inflation is coming for middle-class households as higher prices hit the big stores. Will they limit discretionary purchases?

“As monetary policy feeds lower growth expectations, there is an elevated level of negative circulation here. Central banks continue to surprise on the restrictive side with no end in sight until inflation comes convincingly close to target,” said Innes. “And while these tighter financial conditions are the obvious route to lower inflation, they are also analogous to lower asset prices.”

The Central Bank of India followed Tuesday’s larger-than-expected rate hike by the Reserve Bank of Australia by raising its repo rate in a bid to curb rising inflation. The European Central Bank is due to meet on Thursday but is expected by some to delay a rate hike until July.

The yield of the BX:TMUBMUSD10Y 10-year Treasury note
rose 5 basis points to 3.016%, while the 2-year Treasury note BX:TMUBMUSD02Y
lost 0.4 basis points to 2.737%.

And US crude oil prices CL
rose 0.8% to $120.33 a barrel, while the global benchmark Brent crude BRN00
rose 1% to $121.69 a barrel.

Read: That’s why the stock market “squirrels” when bond yields rise above 3%

Which companies are in focus?
  • Novavax Inc.
    NVAX
    Shares are up 5.7% after an advisory committee to the US Food and Drug Administration recommended its COVID-19 vaccine.

  • U.S.-listed Chinese tech companies rose, and stocks rose alibaba group holding ltd
    BABA
    to 4%, with Pinduouo Inc.
    PDD
    increased by 4%, Tencent Music Entertainment Group
    TME
    rising 3% and Bilibli Inc. BILI
    It gained nearly 5% on signs of easing regulatory pressure after China’s regulator approved a slew of video game titles.

  • Shares listed in the US Credit Suisse Group AG
    CS
    fell 0.4% and trailed losses in Europe after the Swiss bank said it expected a loss for the second quarter.

How are other assets traded?
  • The ICE US Dollar Index DXY
    rose 0.1 to 102.38

  • Gold Futures GC00
    were little changed at $1,856.80 an ounce

  • Bitcoin BTCUSD
    rose 2.7% to $30,392

  • For European stocks, the Stoxx Europe 600 Index is XX:SXXP
    fell 1% and the FTSE 100 index UK:UKX
    down 0.5%

  • In Asia, the Shanghai Composite is CN:SHCOMP
    up 0.7%, Hong Kong’s Hang Seng Index HK:HSI
    rose 2.2% and the Nikkei 225 Index JP:NIK
    increased by 1%

https://www.marketwatch.com/story/stock-futures-push-lower-as-bond-yields-climb-and-oil-hovers-near-121-a-barrel-11654685407?rss=1&siteid=rss Stocks open lower in choppy trades as oil prices fluctuate around $121 a barrel

Brian Lowry

InternetCloning is an automatic aggregator of the all world’s media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials, please contact us by email – admin@internetcloning.com. The content will be deleted within 24 hours.

Related Articles

Back to top button