The S&P 500 Index closed down by 0.45% on Tuesday, while the Dow Jones Industrial Average declined by 0.63% and the Nasdaq 100 fell by 0.65%. This loss marks the lowest close for both the S&P 500 and Dow in six weeks, attributed to rising crude oil prices—which surged over 4%—increasing inflation expectations and bond yields. The 10-year U.S. Treasury yield reached 5.04%, the highest in 19 years.
Crude supply fears intensified after Saudi Arabia shut down a critical pipeline following Houthi rebel threats, contributing to global oil price increases. In the U.S., the September Empire Manufacturing Index fell to 7.6, significantly lower than expectations of 15.0. Meanwhile, concerns about weaker economic indicators from China, including retail sales growth and a rising jobless rate, contributed to a bearish market sentiment.
The market anticipates a 96% likelihood of a 25 basis point interest rate hike by the Federal Reserve at the upcoming FOMC meeting. Overall, European markets mirrored the downward trend, with the Euro Stoxx 50 hitting a 2.25-month low, while the 10-year German bund yield increased to 3.57%, the highest since 2006.
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