US stocks continued their decline on Thursday, extending a week- and month-long slide, driven by a surge in bond yields following the Federal Reserve’s recent meeting. The 10-year US Treasury rate reached a high of 4.49%, its highest level since October 2007, while the 2-year Treasury yield rose to its highest point since 2006.
Fed’s Stance and Concerns:
Federal Reserve Chairman Jerome Powell emphasized that inflation remains a top concern. The Fed’s “dot plot” forecasts indicated only two rate hikes in 2024, contrary to market expectations of potentially three or four. Powell’s messaging suggested that while the Fed remains data-dependent and cautious, another rate hike remains a possibility as part of the Fed’s commitment to restoring price stability.
Potential Government Shutdown Looms:
Adding to market jitters, a potential government shutdown looms on the horizon. The Republican-controlled House of Representatives recessed without passing rules for a defense funding bill, diminishing hopes for an overall budget deal to keep the government open. A government shutdown could potentially occur in October.
Market Closures:
As of the 4:00 p.m. closing bell on Thursday, US indexes stood as follows:
- S&P 500: 4,330.00, down 1.64%
- Dow Jones Industrial Average: 34,070.42, down 1.08% (37046 points)
- Nasdaq Composite: 13,223.99, down 1.82%
Key Developments:
- Jobless claims dropped to 201,000 last week, the lowest reading since January and below economist estimates, signaling a tight labor market.
- Nvidia, after a remarkable 2023 rally, faced a downturn this month, with the semiconductor giant shedding nearly $180 billion in market value, influenced by the “September effect.”
- China initiated investigations into hedge funds employing quantitative trading strategies to bet against its struggling stock market.
- Billionaire investor Jeff Gundlach advised investors to prepare for another Federal Reserve interest-rate increase, citing rising oil prices likely rekindling inflation pressures.
- Billionaire investors Ken Griffin and Bill Ackman met with Volodymyr Zelenskyy as Ukraine explores private-sector funding for economic recovery.
- A high-denomination $10,000 bill issued by the US Treasury in 1934 set a record by selling in an auction for $480,000.
Commodities, Bonds, and Crypto:
- West Texas Intermediate crude oil dipped 0.03% to $89.63 per barrel. Brent crude, the international benchmark, fell 0.27% to $93.28 per barrel.
- Gold saw a 1.36% decline, reaching $1,940.40 per ounce.
- The yield on the 10-year Treasury bond surged by 14 basis points to 4.49%.
- Bitcoin experienced a 1.91% decrease, trading at $26,608.
Note: This article reflects the current financial landscape, with markets reacting to developments and policymakers’ decisions. Market conditions can change rapidly.