Stocks experienced a decline, and the 10-year Treasury yield remained steady at around 4.5%, as investors grappled with the possibility of prolonged high interest rates and a potential government shutdown. Moody’s Investors Service cautioned that a government shutdown, expected to occur in a matter of days, could negatively impact the U.S.’s credit rating. Meanwhile, Asian markets were affected by the non-payment of a bond by a major unit of Chinese property developer China Evergrande, raising concerns about the sector and weighing on regional shares.
Looking ahead, Costco is set to release its earnings report after the market closes, and there are upcoming key economic data releases and events to watch. This includes an updated second-quarter GDP reading on Thursday, followed by consumer spending data and the Fed’s preferred inflation gauge on Friday.
In the U.S., stocks declined across all three major indexes, with the Dow dropping almost 150 points. On the other hand, the 10-year Treasury yield slightly decreased after reaching its highest level since October 2007. Additionally, the WSJ Dollar Index rose to its highest level since November of the previous year. Brent crude oil contracts experienced a sixth consecutive day of decline, alleviating concerns that surging energy prices could worsen inflation and complicate the Fed’s efforts. Furthermore, both Asian and European markets suffered losses, partly due to worries regarding China’s property market.