IQN (NewsDesk): US stock markets closed in mixed territory on Thursday, as rising Treasury yields and growing expectations of another Federal Reserve rate hike weighed on investor sentiment even as several corners of the market managed to hold their ground.
The Dow Jones Industrial Average slipped for a third consecutive session, shedding around 162 points to close at 51,349.98, a decline of roughly 0.3 percent. The S&P 500 was essentially flat, easing just 0.02 percent to finish at 7,704.13, while the Nasdaq Composite managed a marginal gain, edging up 0.01 percent to settle at 26,939.37, as strength in a handful of large technology names offset broader weakness elsewhere in the market.
The moves came as bond yields climbed further, fueling speculation that the Federal Reserve could raise its benchmark interest rate again as soon as October. According to data from the CME FedWatch tool, futures markets were pricing in a nearly 71 percent probability of a rate increase next month, a sharp jump from roughly 55 percent just a week earlier. Higher yields have added pressure on consumers already grappling with elevated borrowing costs and rising fuel prices, even as recent economic data continues to point to a resilient US economy.
Jason Stephens, founder of Evertern Wealth, described the current environment as something of a contradiction, noting that investors are growing anxious about rates precisely because economic data remains strong rather than because the economy shows signs of weakening. He said the resilience of the economy is keeping inflation concerns alive, which in turn is pushing interest rate expectations higher.
Adding to the day’s volatility was a notable slide in Oracle shares, which fell 3.5 percent after a Bloomberg News report, citing unnamed sources, said the company had invoked force majeure provisions to protect itself in connection with a data center project under construction in New Mexico, raising questions about potential delays to the facility.
Despite the broader market’s soft finish, so called Magnificent Seven stocks continued to outperform, with the Roundhill Magnificent Seven ETF rising 0.8 percent even as the wider market traded lower during the afternoon session, underscoring the continued dominance of a small group of mega cap technology companies in driving overall market returns.
