US stocks retreat on oil, Treasury rates worries
Wall Street's three major indexes closed lower on Tuesday with the Dow leading declines as Treasury yields rose along with oil prices and investors assessed prospects for the Federal Reserve's interest rate path. While all three main US stock indexes had logged gains in the previous week on hopes for a less hawkish Fed, that sentiment had faded by Monday. US Treasury yields rose after economic data showed resilience and Fed Governor Christopher Waller said it suggests that the central bank need not change rates any time soon. "Part of the reason stocks are struggling to make headway is that interest rates are continuing to rise and provide a good alternative to stocks," said Paul Nolte, market strategist, Murphy & Sylvest Wealth Management, Elmhurst, Illinois. With US crude oil prices rallying on Tuesday, Nolte also cited recent strength in oil prices as a damper to the Fed's efforts to push inflation back to 2 percent. "Everybody has been expecting the Fed to step aside or start cutting rates. That might not be the case," he said. Along with relatively light trading volume a day after Monday's Labour Day holiday, Sam Stovall, chief investment strategist at CFRA Research, also noted that the Fed will have to look at upcoming data such as August's inflation readings before making a rate decision later this month. "The market's not sure which way it wants to turn," he said. The Dow Jones Industrial Average fell 0.56 percent, to 34,642, the S&P 500 lost 0.42 percent, at 4,497 and the Nasdaq Composite dropped 0.08 percent, to 14,021. United Airlines closed off 2.5 percent after falling as much as 4.7 percent earlier in the day with a system-wide information technology issue forcing an hour-long aircraft ground stop. Shares of Airbnb rallied 7 per while Blackstone added 3.6 percent on news that their stocks would join the S&P 500 index. (Reuters)