NEW YORK: US stocks fell on Thursday as a surge in oil prices and Treasury yields near multi-year highs stoked inflation worries before a crucial earnings season that is expected to test recent market gains.
Brent crude futures jumped 4.2 percent to more than USD104 a barrel on persistent worries about supply from the Middle East and US output disruptions due to a hurricane.
The bond market rout showed no sign of abating as the yield on the benchmark 10-year Treasury bond stood at 5.3 percent, close to its highest mark since 2002.
Risk assets around the world took a hit on Thursday. Megacap growth stocks were broadly lower, with Amazon.com falling around 1 percent and Tesla down 1.4 percent.
Chip-related companies also dropped after forecasts of record quarterly profit from memory-chip giant Samsung Electronics failed to lift sentiment, with its shares closing lower in South Korea. Rival Micron Technology was down 1.8 percent.
Meanwhile, the Wall Street Journal reported on Wednesday that Broadcom is lining up USD50 billion in financing for OpenAI, with Oracle also seeking an unspecified sum, spurring fears that massive debt issuance by technology companies could intensify the competition for capital.
Broadcom and Oracle were down 1.4 percent and 2.1 percent, respectively, amid wider weakness in tech stocks.
A rebound in Treasury yields and oil prices knocked the S&P 500 and the Nasdaq from record highs a day earlier, while the Dow snapped a four-day winning streak.
“We’ve got dueling headwinds with energy prices and Treasury yields and light on the economic data front, kind of a wait and see on earnings which really kick off in earnest next week,” said Art Hogan, chief market strategist at B. Riley Wealth.
Eight of the 11 S&P 500 sectors traded lower, with healthcare and utilities losing the most, while energy and consumer staples led gains.
At 11:23 a.m. ET, the Dow Jones Industrial Average fell 239.36 points, or 0.47 percent, to 50,940.51, the S&P 500 lost 30.68 points, or 0.39 percent, to 7,771.09, and the Nasdaq Composite eased 151.25 points, or 0.55 percent, to 27,387.44.
Big banks are due to report results in the coming week. Optimism around strong earnings has buoyed US stocks lately despite shaky geopolitical developments and concerns about rising interest rates.
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