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Wall Street slides deeper as yields rise and oil climbs

U.S. Treasury yields hit multi-year highs while markets increased the odds of a 25-basis-point Fed hike by the end of next month, according to FedWatch data.

Reported · Written up by our desk · Trade & Tariffs

U.S. stocks extended their slide at the start of September as a global bond selloff deepened and crude oil prices resumed climbing. Rising tensions tied to the U.S. and Iran pushed oil higher, while hopes for a near-term solution to the conflict with Israel also dimmed, according to Reuters.

The move reflected expectations that central banks may need to speed up interest rate increases as sovereign bond yields rose to multi-year highs. The benchmark U.S. Treasury yield continued edging higher after reaching a 19-month high on Monday, adding pressure to equity sentiment.

Markets are now pricing a 68.2% likelihood that the Federal Reserve will deliver a 25-basis-point hike at the end of next month’s policy meeting, up from 39.6% a week earlier, based on CME’s FedWatch tool. Investors also cited seasonal factors, with Fisher Investments noting September is the only month with a negative average return since 1926.

On the data front, the U.S. Labor Department’s JOLTS report showed jobs market churn slowing, while purchasing managers’ index readings suggested factory activity is losing momentum and residential construction spending is falling. Reuters reported the day’s declines, with the Dow dropping 0.81% to 52,754.13, the S&P 500 down 0.69% to 7,633.26, and the Nasdaq Composite losing 256.93 points.

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Latest closeWTI crude $90.79 ▲5.9%|S&P 500 7,631.47 ▼0.7%|Nasdaq Comp. 26,099.77 ▼1.0%

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