Global Market Update: Dow, S&P 500 slump, US Treasury yields hit 16-year high

Global Market Update: The Dow and S&P 500 were lower on Monday with utilities falling sharply, Nasdaq barely changed as investors weighed the likelihood that the Fed will hold interest rates higher for longer.

The S&P 500 lost 22.24 points, or 0.52%, to 4,265.81 in late trading. The Dow Jones was down 198.93 points, or 0.59%, to 33,308.57, however tech heavy weight Nasdaq composite added 198.93 points, or 0.59%, to 33,308.57.

Majority of US stocks fell alongside oil-and-gas stocks, with 85% of S&P 500 stocks dropping, but gains for Apple and some other influential Big Tech stocks helped limit the market’s losses. Nvidia shares gained after Goldman Sachs added the chipmaker’s stock to its conviction list.

The US Treasury yields climbed to a new 16-year high on Monday, as a global bond rout resumed following a brief reprieve at the end of last week. The 10-year Treasury yield rose 0.13 percentage points to 4.70%, the highest level since 2007, after better than expected manufacturing data bolstered investors’ belief in the US economy.

MSCI’s global index of stocks started fourth-quarter trading with a decline, while US Treasury yields and the dollar rose after a last-minute deal averted a partial US government shutdown.

Stocks in Europe lost earlier gains after September PMI data, a key indicator of economic health, showed manufacturing activity remains in a broad-based downturn.

The pan-European STOXX 600 index lost 1.21% and MSCI’s gauge of stocks across the globe shed 0.56%.

Oil prices fell nearly 2% on Monday to a three-week low as a higher-priced Brent contract expired. On its first day as the front-month, Brent futures for December delivery settled $1.49, or 1.6%, lower at $90.71 a barrel, or down about 5% from where the November contract expired on Friday. The US WTI fell $1.97, or 2.2%, to settle at $88.82 per barrel.

In currencies, the dollar index climbed on Monday, building on four straight weeks of gains, after the US government avoided a shutdown.

The dollar index rose 0.62% to 106.89, with the euro down 0.75% to $1.0491. The Japanese yen weakened 0.31% versus the greenback at 149.77, after falling to 149.90 per dollar.

Gold extended its decline for a sixth straight session on Monday to hit a near seven-month trough, as a robust dollar and prospects of higher US interest rates took the shine off bullion. Spot gold was down 0.9% by 1:52 p.m. EDT (1752 GMT) at $1,831.70 per ounce, its lowest level since early March. US gold futures settled 1% lower at $1,847.20.

Asian shares

Asian shares were mostly higher in thin trading Monday with many markets closed for holidays. Markets in India, China and South Korea were closed for a holiday.

Japan’s Nikkei 225 index advanced after a central bank survey showed business confidence on the rise.

In Tokyo, the Nikkei 225 index was up 0.7% at 32,098.40. Australia’s S and P/ASX 200 lost 0.2% to 7,037.90. Taiwan’s Taiex gained 1.2%, while the SET in Bangkok edged 0.1% lower.

(With inputes from agencies)

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