Stocks were off to a lower start Monday as major U.S. benchmarks begin the final week of September on track for a losing month, with investors fretting over rising bond yields and indications the Federal Reserve plans to hold interest rates at high levels for an extended stretch.
What’s happening
-
The Dow Jones Industrial Average
DJIA
fell 76 points, or 0.2%, to 33,890. -
The S&P 500
SPX
was off 4 points, or 0.1%, at 4,316. -
The Nasdaq Composite
COMP
was up 4 points, or less than 0.1%, at 13,216.
Last week, the S&P 500 fell 2.9%, its biggest weekly decline since the period ending March 10, as it finished at its lowest since June 9. The Dow finished Friday at its lowest since July 10, while the Nasdaq saw its lowest close since June 7.
What’s driving markets
A rapid climb in long-term interest rates was setting the tone across markets early Monday. Technical strategists at Bank of America said that while they don’t have evidence that the move higher in the 10-year yield is complete, it is getting stretched.
The yield on the 10-year Treasury
BX:TMUBMUSD10Y
rose more than 9 basis points to top 4.52%. Also stoking concerns about the outlook, oil prices have risen sharply since summer, with Brent crude
BRN00,
the global benchmark, and West Texas Intermediate crude
CL00,
the U.S. benchmark, both above $90 a barrel.
“Markets have struggled in recent weeks amid concerns over rising oil prices and bond yields, subdued economic activity across the global manufacturing sector and still-high inflation in major developed economies,” said Fawad Razaqzada, market analyst at Forex.com and City Index, in a note. “As a result, investors have lost appetite for taking on too much risk.”
Rather than rush in to buy the dip when stock prices decline, traders “have been happy to sit on the offer and slam asset prices back down each time we see a bit a of relief rally,” he wrote.
On the labor front, union leaders and Hollywood studios reached a tentative deal Sunday to end a historic screenwriters strike after nearly five months. No deal appeared in the works, however, for striking actors.
Separately, President Joe Biden is expected to travel to Michigan this week to join United Auto Workers union members on the picket line in their strike against the Big Three automakers — Ford Motor Co.
F,
General Motors Co.
GM,
and Chrysler owner Stellantis NV
STLA,
UAW strike: Labor leaders stand with striking workers
The housing crisis in China was back in the news, as Evergrande
3333,
shares slumped as the company scrapped a $35 billion debt-restructuring plan, while shares of China Aoyuan Group dived Monday in their first day of trading in more than a year. The Hang Seng
HK:HSI
skidded 1.8% in Hong Kong trade.
Companies in focus
- The tentative end of the Hollywood writers strike was unable to lift media companies like Warner Brothers Discover Inc. WBD, Paramount Global PARA, and Walt Disney Co. DIS. Shares of all three were lower, failing to follow through on premarket gains. Netflix Inc. shares NFLX, however, were higher.
-
Amazon.com Inc.
AMZN,
+1.31%
said Monday it would invest up to $4 billion in AI startup Anthropic and take a minority stake in the company in a move aimed at accelerating the development of its future foundation models and making them accessible to customers of its cloud business, AWS. Amazon shares rose 0.8%.
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