In today’s mixed stock market, the Dow Jones Industrial Average slipped 0.2%, the S&P 500 remained mostly unchanged, and the Nasdaq Composite added 0.22%. Meanwhile, the 10-year Treasury yield reached its highest level since 2007, causing concern for investors. In Asia, markets fell as Japan’s Nikkei 225 led losses in the region. Additionally, the Singapore Exchange launched its first structured certificate in an attempt to revive itself.
Oil prices surged to their highest levels in over a year during Asian trading hours. West Texas Intermediate crude futures rallied around 1% to $94.61, while Brent crude added 0.86% to $97.38. This spike in prices was largely due to a report that crude inventories in Cushing, Oklahoma fell close to their operational minimum.
China Evergrande Group’s shares were suspended after its chairman was placed under police surveillance. The company reported a loss of 33 billion yuan ($4.15 billion) for the six months ended June, bringing its total net loss for 2021 and 2022 to $82 billion. In other news, Meta announced the release of Quest 3, the latest version of its virtual reality headset, along with new artificial intelligence software and digital assistants.
The combination of high yields and oil prices, along with the potential U.S. government shutdown, is making it difficult for stocks to gain confidence. Rising Treasury yields could trigger fears of a recession as borrowing costs increase. Similarly, surging oil prices may cause companies and consumers to cut back on spending. Additionally, a government shutdown would delay economic data and hinder the Federal Reserve’s ability to make data-dependent decisions. This uncertainty could lead to a downgrade by ratings agencies, further weakening the United States financially. Overall, the market outlook for the coming months remains uncertain and potentially challenging.