On Monday, September 18, 2023, the S&P 500 Index closed down by 0.19%, while the Nasdaq 100 Index managed a slight gain of 0.04%. The Dow Jones Industrial Average fell 0.59%, marking a three-week low for the index. This market performance followed a rise in crude oil prices to a five-week high, driven by escalating tensions in the US-Iran conflict, which has impacted inflation expectations. The 10-year Treasury yield climbed 5 basis points to 4.60% as geopolitical concerns weighed on market sentiment.
Crude prices surged amid fears of a wider Middle Eastern conflict, with the US conducting airstrikes on Iran for the ninth consecutive day. The US is reportedly increasing its military presence in the region, sending additional F-35 and F-16 jets. In economic data, the forecast for Q2 earnings suggests a 23% increase, driven largely by AI investments. The market is currently discounting only a 17% chance of a 25 basis point rate hike at the next Federal Reserve meeting scheduled for July 28-29.
Internationally, markets showed mixed results. China’s Shanghai Composite rose by 0.85% from a 10.5-month low, while the Euro Stoxx 50 closed down 0.06%. Meanwhile, the 10-year German bund yield increased to 3.150% as inflation concerns persisted globally.
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