Wall Street drops on rates, Middle East focus
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The news: US stock indices closed lower as traders tamped down bets for Federal Reserve interest rate easing and worried about the Middle East conflict's impact on oil prices.
The numbers: Among the main indices: the Dow Jones fell 0.94%, the S&P 500 lost 0.96%, while the Nasdaq dropped 1.18%. The yield on benchmark 10-year US Treasury notes exceeded 4% for the first time in two months.
The context: Traders pulled back bets for a 50-basis-point rate cut in November after Friday's stronger-than-expected jobs report, which also prompted US Treasury yields to rally.
Investors are waiting for the Consumer Price Index inflation reading for September and the kick-off of third-quarter earnings season with reports from banks, both due this week. Also in focus is the economic impact of the Middle East conflict, including rising oil prices.
Further dampening sentiment was an order from a US judge for market heavyweight Alphabet's Google to overhaul its mobile-app business to give Android phone users more options. The stock ended 2.5% lower.
A big drag on the S&P came from Amazon.com after a Wells Fargo downgrade. Amazon's decline also pressured the consumer discretionary sector index.
Shares of Pfizer rose after a report that activist investor Starboard Value has taken a roughly USD1 billion ($1.48 billion) stake in the drugmaker, while Air Products and Chemicals gained sharply on a report that activist hedge fund Mantle Ridge has built a position in the company.
Meanwhile, Goldman Sachs lowered its odds of a US recession to 15% from 20% and raised its 2024 year-end S&P 500 target to 6,000 from 5,600.
The source: Reuters
