Breaking News
Investing Pro 0
Final hours: unlock premium data with Claim 60% OFF

Equities fall as U.S. Treasury yields, dollar stay elevated

Published Sep 25, 2023 21:52 Updated Sep 26, 2023 16:48
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., September 11, 2023. REUTERS/Brendan McDermid/file photo
 
USD/CAD
-0.09%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
GBP/CAD
-0.31%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
XAU/USD
-1.19%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
US500
+0.41%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
JP225
-1.77%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
HK50
-0.11%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

By Sinéad Carew

NEW YORK (Reuters) - A global equity index lost more than 1% on Tuesday in a choppy trading session as fears of higher-for-longer interest rates ate into appetites for riskier assets while the benchmark U.S. Treasury yield remained near 16-year highs.

The dollar index hit a 10-month high while the Japanese yen came closer to a key level, where Japanese officials are seen as potentially intervening to shore up the currency.

Wall Street's major stock indexes followed Asian and European equities lower as investors continued to digest last week's indication from the Federal Reserve that it would keep rates higher for longer than investors had previously expected.

However, Minneapolis Fed President Neel Kashkari said on Tuesday that he sees a "soft landing" for the U.S. economy as likelier than not, but also sees a 40% chance that the Fed will need to raise rates "meaningfully" higher to beat inflation.

Nervousness in the market was also exacerbated by the prospects of a government shutdown. The Republican-controlled House of Representatives is pushing to advance steep spending cuts this week, which are unlikely to become law but could trigger a partial shutdown, furloughing hundreds of thousands of federal workers and suspending public services.

Added to negative sentiment were rising oil prices and an auto worker strike that started in Detroit on Sept. 15, while investors also waited for a key inflation reading, the core Personal Consumption Expenditures (PCE) price index, which is due out on Friday.

"As long as rates keep pushing higher that's going to keep the market nervous," said Jack Janasiewicz, portfolio manager at Natixis Investment Managers Solutions. "It feels like this dark cloud is hovering over the market until we get to the PCE print."

And as the session wore on losses in equities deepened.

"The concerns about continued higher rates have been weighing on stocks for about two months since the peak at the end of July," said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles. "The downward price action becomes self fulfilling. When those that are hoping for a bounce don't get one they become frustrated."

The Dow Jones Industrial Average fell 388 points, or 1.14%, to 33,618.88, the S&P 500 lost 63.91 points, or 1.47%, to 4,273.53 and the Nasdaq Composite dropped 207.71 points, or 1.57%, to 13,063.61.

MSCI's gauge of stocks across the globe shed 1.24% while the pan-European STOXX 600 index earlier closed down 0.61%.

In treasuries, benchmark 10-year notes were up 0.6 basis point to 4.548%, from 4.542% late on Monday. The 30-year bond was last up 2.4 basis points to yield 4.6834%, from 4.659%. The 2-year note was last up 0.3 basis points to yield 5.1336%, from 5.131%.

In currencies, the dollar index rose 0.198%, with the euro down 0.17% to $1.0572 while Sterling was last trading at $1.2157, down 0.44% on the day.

The Japanese yen weakened 0.09% versus the greenback at 149.03 per dollar. The dollar's strength against the yen in particular has kept traders on alert for an intervention to prop up the Japanese currency, especially after Finance Minister Shunichi Suzuki said no options were off the table.

The 150 yen per dollar level is seen by financial markets as a red line that would spur Japanese authorities to act, as they did last year.

Oil prices settled higher after reaching a two-week low earlier in Tuesday's session, as investors weighed expectations of tighter supply against demand concerns stemming from an uncertain economic outlook.

U.S. crude settled up 0.79% to $90.39 per barrel and Brent settled at $93.96, up 0.72% on the day.

Equities fall as U.S. Treasury yields, dollar stay elevated
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email