U.S. stocks opened lower on Thursday as rising Treasury yields and surging oil prices reignited inflation concerns ahead of a critical corporate earnings season. The Dow Jones Industrial Average fell 178.5 points at the open, while international Brent crude climbed past $104 per barrel amid escalating Middle East supply tensions.
Financial markets faced renewed downward pressure as U.S. stocks edged lower, pulled down by a potent combination of energy market volatility and tightening bond conditions. The S&P 500 and the Nasdaq retreated from record highs reached just a day earlier, while the Dow Jones Industrial Average slipped 88.19 points, or 0.17%, to 51,096.19. At the opening bell, the Dow Jones Industrial Average fell 178.5 points to 51,001.38, the S&P 500 lost 28.08 points, or 0.36%, to 7,773.69, and the Nasdaq Composite shed 155.07 points, or 0.58%, to 27,383.62. Additional opening metrics showed the S&P 500 falling 28.9 points, or 0.37%, at the open to 7,772.87, while the Nasdaq Composite fell 135.05 points, or 0.49%, to 27,403.64.
Middle East Conflict Drives Crude Oil and Yields Higher
Energy markets drove much of the day’s anxiety. Brent crude futures jumped 4.2% to more than $104 a barrel, fueled by persistent worries over supply disruptions in the Middle East following heightened attacks on shipping lanes in the Gulf and the Strait of Hormuz. Meanwhile, the bond market rout showed no signs of slowing down, with Treasury yields hovering near multi-year highs. The conflict in the Middle East continues to generate inflation pressures.
“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.”
Art Hogan, chief market strategist at B. Riley Wealth
Megacap growth stocks bore the brunt of the risk-off sentiment. Shares of Amazon.com, Tesla, and Nvidia all fell between 0.3% and 1.3%.
PepsiCo Cuts Costs While Samsung Shares Close Lower
- PepsiCo to cut costs on weakness in N. America business, though its shares still rose 2.1%.
- Samsung Electronics closed lower in South Korea despite forecasting record quarterly profit, pulling rival Micron Technology down by 1.4%.
Traders Expect Fed Rate Hike Before Bank Earnings
Attention now turns toward upcoming corporate scorecards. Big banks including JPMorgan Chase are due to report results next week.
On the monetary policy front, traders see a roughly 73% chance the Fed will raise the federal funds rate at its meeting next week.
Mortgage Rates Hit Highest Level Since November 2023
The average interest rate on a 30-year US mortgage has recently climbed to its highest level since November 2023, as the 10-year Treasury yield reached its highest level since the early 2000s. The 50% Fibonacci retracement of the entire move from the March low to the August peak sits just below 50,000, around 49,780.
