Tuesday witnessed a cautious sentiment in the equity markets, with all sectors on Wall Street experiencing losses as investors eagerly awaited tomorrow’s FOMC meeting.
Investors are concerned about the possibility of more hawkish remarks regarding the future, as the Federal Reserve is expected to maintain current interest rates. These concerns arise from renewed inflationary pressures driven by the rapid increase in oil prices.
During early European trading hours, WTI crude oil held steady at $91 per barrel after briefly reaching $92.25.
Meanwhile, Treasury yields continue to rise, with the 10-year benchmark reaching its highest level since October 2007 at 4.34%.
In Tuesday’s trading, the S&P 500 fell 0.8%, while both the Nasdaq 100 and the Dow Jones Industrial Average slipped 0.9%. Surprisingly, small caps performed relatively well, with the Russell 2000 index down 0.6%.
In major US equity ETFs, the SPDR S&P 500 ETF Trust (SPY) was 0.8% lower at $440.22, the SPDR Dow Jones Industrial Average ETF (DIA) fell 0.9% to $343.13, and the Invesco QQQ Trust (QQQ) dropped 0.9% to $367.49.
The worst performer among the S&P 500 sectors was the Consumer Discretionary Select Sector SPDR Fund (XLY), down 1.2% for the day. Similar performances were observed in the Energy Select Sector SPDR Fund (XLE) and the Industrials Select Sector SPDR Fund (XLI). The Utilities Select Sector SPDR Fund (XLU) showed the best relative performance, but was still down 0.3%.
In the latest economic data, building permits saw a significant increase of 6.9% in August, reaching the highest level in 10 months and exceeding market expectations. However, housing starts experienced a sharp decline, falling by 11.3% on a month-over-month basis, marking the lowest level since June 2020 and significantly below the expected forecast.
In terms of specific stocks, Enphase Energy, Inc. (ENPH) saw a 5% increase in its stock price, while United States Steel Corporation (X) rose over 1% and Nio, Inc. (NIO) shed about 15% in reaction to its convertible note offering. CBOE Global Markets, Inc. (CBOE) surged 4% after the resignation of CEO Edward T. Tilly, and Walt Disney (DIS) experienced a 3% drop in its stock price after revealing plans to increase investment in its parks, experiences, and products segment.
In the commodity and bond markets, crude oil fell 0.3%, Treasury yields were higher, the U.S. dollar and Euro remained steady, European equity indices had a mixed day, and gold and silver prices experienced slight decreases.
