S&P 500, Nasdaq ease from record highs as Treasury yields climb
SPY•The S&P 500 fell 0.26% and the Nasdaq lost 0.40% as Treasury yields climbed, with the 30-year yield reaching a 24-year high. Fed minutes showed divisions over the rationale for September’s rate hike.
1. Stocks pull back
Wall Street’s major indexes edged lower after the S&P 500 and Nasdaq closed at records the previous day. The Dow fell 0.63%, the S&P 500 lost 0.26% and the Nasdaq declined 0.40%; the Russell 2000 underperformed larger-cap indexes.
2. Yields and Fed minutes
The 30-year Treasury yield touched a 24-year high as rising oil prices and concerns about inflation and mounting debt weighed on markets. Minutes from the Fed’s September meeting showed some participants viewed the rate hike as necessary to contain energy-price shocks, while others said it was needed to curb demand-driven inflation. Markets priced in a 19.4% chance of another hike at the Fed’s October meeting, down from 37.6% a week earlier.
3. Sector and company moves
The Philadelphia semiconductor index fell 1.5%, while housing stocks and homebuilders dropped 2.3% and 2.9%, respectively. SpaceX fell 2.8% after reports that it was seeking $40 billion in financing to buy Nvidia chips. Analysts expected aggregate S&P 500 earnings to grow 30.6% year over year in the July-through-September period.
