New York Stock Exchange closes in the red under pressure from bond yields and oil

The New York Stock Exchange closed the day with losses as the continued rise in bond yields and the increase in energy prices strengthened inflation concerns. Investors took a cautious stance ahead of the US Federal Reserve's (Fed) interest rate decision.

At the close, the Dow Jones index fell 0.63 percent to 52,093.11 points. The S&P 500 index lost 0.45 percent to 7,585.73 points, while the Nasdaq index dropped 0.78 percent to 25,981.57 points.

High oil prices, rising US Treasury bond yields, and uncertainties regarding demand for artificial intelligence stood out as the main themes of pressure on the markets. A new attack by the Houthis in Yemen against Saudi Arabia increased concerns about oil supply.

The futures barrel price of Brent oil rose 2.9 percent to 108.75 dollars as of 23:10 TSI. At the same time, West Texas Intermediate crude oil traded at 106.03 dollars, up 4.6 percent. According to American Automobile Association data, the average price of a gallon of diesel in the US also hit a record high of 6.27 dollars.

While the rise in energy costs fueled concerns that inflation could be persistent, selling pressure continued in the bond markets. The US 10-year bond yield climbed to 5.04 percent, reaching its highest level since July 2007, before stabilizing around 5.01 percent.

US Treasury Secretary Scott Bessent attributed the rise in bond yields to "global issues." Regarding calls for artificial intelligence companies to slow down technology development due to security risks, Bessent stated, "They can stop whenever they want."

Expectations of a slowdown in the field of artificial intelligence triggered selling in some technology stocks. Alphabet shares lost 1.2 percent, and Microsoft shares lost 1.6 percent. In contrast, Meta shares rose nearly 1 percent after the company announced it was testing next-generation chips that would run its artificial intelligence models with lower costs and energy consumption.

Selling pressure was also notable on the digital assets side. While the necessary majority could not be reached in the US Senate to discuss the bill regarding crypto assets, Bitcoin fell nearly 5 percent. Shares of the crypto exchange Coinbase dropped 10 percent.

In money markets, the probability of the Fed raising the policy rate by 25 basis points is priced at 95 percent. Analysts state that uncertainties ahead of the decision are limiting risk appetite.

News Source: 12punto