Wall Street opened lower on Wednesday as rising oil prices and Treasury yields renewed pressure on equities, while investors awaited the Federal Reserve’s minutes from its September policy meeting.
The Dow Jones Industrial Average was down 422 points, while the S&P 500 fell 0.44% and the Nasdaq Composite declined 0.62%.
The moves came a day after the S&P 500 and Nasdaq Composite closed at record highs, supported by gains in technology and chip stocks.
Brent crude moved back above $100 a barrel as concerns over Middle Eastern supply persisted.
At the same time, the 10-year Treasury yield rose to 5.35%, while the 30-year yield climbed to its highest level since 2002.
Treasury yields climb as markets await Fed minutes
The benchmark 10-year Treasury yield rose more than six basis points to 5.35%, reaching its highest level since April 2002. The 30-year Treasury yield gained more than eight basis points to 5.73%, its highest level since May 2002.
The moves came after Treasury yields eased on Tuesday, helping the S&P 500 close above 7,800 for the first time.
Investors are now awaiting the release of minutes from the Federal Reserve’s September meeting.
The central bank raised interest rates at that meeting for the first time since 2023, and the minutes could provide further details on policymakers’ views of economic conditions and the future path of interest rates.
Markets widely expect the Fed to keep rates unchanged at its October meeting, while a rate increase in December remains possible, according to the CME FedWatch Tool.
The Treasury is also scheduled to sell $39 billion of 10-year notes on Wednesday.
Oil prices add to market pressure
Oil prices also moved higher, adding to concerns about inflation and borrowing costs. US crude futures moved towards $90 a barrel, while Brent crude traded 1% higher at around $101.73.
Higher energy prices have contributed to changing expectations for Federal Reserve policy as investors assess the potential impact on inflation.
The rise in oil prices came as Middle Eastern supply concerns persisted. Markets have been monitoring energy prices closely following the recent surge linked to the Iran war.
The combination of higher oil prices and rising Treasury yields weighed on the equity market.
Chip stocks fall as earnings season approaches
Technology and semiconductor stocks were among the biggest decliners in trading. Micron Technology fell 2.65%, while AMD, Broadcom and Marvell Technology also declined.
SpaceX shares fell 0.99% following a Financial Times report that the company was seeking $40 billion in financing to fund purchases of Nvidia chips.
Constellation Brands gained 2.14% despite lowering its annual operating margin forecast.
Investors are also preparing for the third-quarter earnings season, which begins next week.
Analysts expect S&P 500 earnings to increase 30.6% overall for the July-to-September period, according to LSEG.
Energy earnings are expected to rise 114.7%, while technology earnings are forecast to increase 66.5%.
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