NEW YORK — Stocks closed modestly lower on Wall Street Tuesday as another increase in long-term Treasury yields weighed on the market.
The S&P 500 slipped 0.2 per cent after wavering between modest gains and losses for much of the day. The Dow Jones Industrial Average dropped 0.3 per cent, and the Nasdaq composite fell 0.1 per cent.
Major indexes shifted lower after a quiet morning as rising bond yields undercut much of the heavy lifting being done by several technology behemoths. Nvidia, the market’s most influential stock, gave up an early gain and closed 0.7 per cent lower. Broadcom rose 1.6 per cent.
Stocks remain under pressure as oil prices swing sharply as the U.S. war with Iran drags on, helping to push Treasury yields to their highest levels in 24 years.
The price of Brent crude oil in the most actively traded part of the oil market fell 1.7 per cent to settle at US$96.16 a barrel. It briefly climbed above US$100 on Monday before prices eased a bit, but it is still well above the roughly US$72 it cost before the U.S. and Israel attacked Iran in late February.
Mediators continued to work with the United States and Iran on reaching a deal to end the fighting and open the Strait of Hormuz. U.S. President Donald Trump over the weekend rejected an offer from Tehran to reopen the key waterway.
Energy stocks had some of the broadest losses. Exxon Mobil fell 0.7 per cent.
Overall, rising oil prices have been fueling a jump in Treasury yields. Higher yields threaten to slow economic growth by making borrowing more expensive for individuals and businesses. They can also hurt prices for stocks, especially those seen as expensive, including many technology companies that have soared because of the frenzy around AI technology.
The yield on the 10-year Treasury rose to 5.25 per cent from 5.24 per cent late Monday, touching its highest level since 2002, according to Tradeweb, well before the financial crisis and Great Recession sent yields toward zero.
Shares of CarMax rose 4.7 per cent after the used car dealership chain reported soaring second-quarter revenue and delivered profits that easily beat Wall Street expectations. The company also announced changes to its executive leadership.
Oura, the maker of wearable digital health accessories and jewelry, said Tuesday that it was postponing its initial public offering, despite strong demand, due to uncertainty in the IPO market.
All told, the S&P 500 fell 12.85 points to 7,670.84. The Dow dropped 131.59 points to 51,349.92, and the Nasdaq gave up 22.84 points to close at 26,797.54.
Markets in Europe ended mixed and markets in Asia closed mostly lower.
With only one day left in September, the S&P 500 is on pace for a slight monthly loss after posting a 2.6 per cent gain in August. The benchmark index is up 12.1 per cent so far this year.
Wall Street will see several big economic updates this week that could help investors and the Federal Reserve get a better sense of where inflation is headed and how households and businesses are dealing with high prices.
The latest update on the jobs market Tuesday showed that U.S. employers posted fewer job openings in August. The Labor Department’s monthly report said they slid to 7.08 million openings, marking a drop from July and registering below what economists had forecast. It also showed that layoffs fell and fewer people are quitting their jobs.
The jobs market has been resilient even as stubbornly high inflation squeezes businesses and households. Wall Street will get a broader update on Friday, when the U.S. releases its monthly employment report for September.
Households have been facing higher prices on everything from gasoline to clothing as the U.S. war with Iran curtails oil shipments through the Strait of Hormuz. The latest update on consumer confidence from business group The Conference Board shows a slump in September. Consumer confidence dipped to its lowest level in 12 years.
“Americans feel jobs are more scarce and are pulling back on plans for homes, cars, and big-ticket purchases, emitting a warning sign for holiday spending even though layoffs data show employers aren’t yet cutting workers to match the gloom,” said Jeffrey Roach, chief economist for LPL Financial, in a research note.
Stubbornly high inflation has been sapping consumer confidence and pressuring the Fed, which recently raised its benchmark interest rate in an effort to cool prices. The latest update of the central bank’s preferred measure of inflation will be released on Wednesday. Economists expect the personal consumption expenditures index, or PCE, to show that the rate of inflation rose 3.7 per cent August, matching July’s reading.
Inflation rates have remained stubbornly above 3 per cent most of the year and that is well above the Fed’s target rate of 2 per cent. Wall Street expects the central bank to raise its benchmark interest rate again at its next meeting in October.
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Damian J. Troise and Alex Veiga, The Associated Press
Associated Press business writers Chan Ho-Him and Matt Ott contributed to this report.
