NEW YORK: The main US stock indexes fell on Wednesday as oil prices soared past USD100 a barrel and Treasury yields rose, putting pressure on equities ahead of crucial inflation data expected later in the week.
Apple dropped 1.1 percent ahead of its first launch event under new CEO John Ternus, where it is expected to unveil a folding iPhone. Other technology heavyweights also fell, with Nvidia and Alphabet down 0.60 percent and 2.54 percent, respectively.
Meta was an outlier, climbing 5.95 percent and stemming declines on the S&P 500 after the company rolled out a long-touted AI assistant that can autonomously send emails, sell a car or make travel bookings on behalf of users.
Chipmakers Arm Holdings and AMD were also up, rising 1.13 percent and 3.69 percent, respectively. The Philadelphia Semiconductor Index added 0.47 percent.
Concerns over global oil supply after a flare-up in Middle East tensions pushed Brent crude above the market-sensitive USD100-a-barrel mark on Wednesday.
Now in its seventh month, the US-Iran war has heightened fears of a broader regional conflict, adding to the uncertain mood.
The energy index was the only one in the green on the S&P 500, advancing 0.95 percent.
“The big story of the day is oil prices, and they are taking the wind out of stocks. We’ve seen pockets of strength in the markets, but sentiment varies on a day-to-day basis,” said Peter Cardillo, chief market economist at Spartan Capital Securities.
Additionally, the yield on the benchmark 10-year US Treasury note rose to its highest since November 2023 after the Treasury Department said it would buy up to USD6 billion in 10-to-20-year government bonds.
High yields on risk-free government bonds typically pressure stocks by making it less attractive for investors to take on the added risk of holding equities.
The Treasury’s USD6 billion buyback was higher than the USD4 billion it had signaled earlier, but some analysts had expected an even larger purchase, in the range of USD8 billion to USD10 billion.
While “interventionist” policies may prove temporarily successful in containing long-end yields, “the sheer magnitude of the US financing needs will likely necessitate increasing long-end debt issuance,” said Said Haidar, founder of Haidar Capital Management.
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