Wall Street Trims Losses, but Oil and Yields Remain a Drag

Wall Street pared losses during Tuesday's trading session after US labor data indicated the job market remains reasonably resilient. However, investor sentiment remained dampened by rising oil prices and Treasury yields early in September—historically a challenging month for stock markets.

As of 10:45 a.m. New York time, the Nasdaq Composite had fallen 0.7% to 26,191.44, having previously dropped as much as 1.4%. The S&P 500 declined 0.4% to 7,658.05, while the Dow Jones Industrial Average slipped 0.2% to 53,069.29.

The primary pressure stemmed from a surge in oil prices and government bond yields. Crude oil held above US$90 per barrel after a US military strike on an Iranian missile site on Larak Island was met with an Iranian missile attack on a US base in Jordan.

This escalation dashed hopes that shipping disruptions through the Strait of Hormuz might soon subside. The situation sparked concerns regarding cost-push inflation, particularly given that the strait is a critical route for global energy supplies.

US Treasury yields also rose across the curve, mirroring pressure in global bond markets. Rising borrowing costs weighed on large-cap technology, semiconductor, and software stocks, as their valuations are particularly sensitive to interest rate fluctuations.

JOLTS data showed US job openings in July totaled 7.271 million—below the expected 7.330 million but up from the downwardly revised June figure of 7.182 million. These figures signal a reasonably resilient labor market, though not one strong enough to dispel concerns regarding the Federal Reserve's interest rate trajectory. Newsmaker Analysis: Wall Street remains under pressure due to a combination of high oil prices, rising yields, and expectations of a September rate hike—which climbed to approximately 64.4% following Kevin Warsh's hawkish remarks. Although JOLTS data helped temper the initial decline, the market has yet to find a compelling reason to resume aggressive stock buying. Attention now shifts to Friday's Nonfarm Payrolls data and next week's CPI figures, which will determine whether the Federal Reserve actually proceeds with a rate hike this month. (asd)

Source: Newsmakers.id