The Dow Jones ended the session with losses of 350 points, while the S&P 500 and the Nasdaq Composite fell 0.8% and 0.9% respectively. The Nasdaq 100, which comprises mainly of chip stocks, fell 1.1%. Both S&P 500 and the Nasdaq 100 ended at their lowest level in 10 sessions.
Markets did pare some gains during mid-day when Axios first reported that US President Donald Trump is willing to grant Iran some concessions on the financing front provided their is concrete progress made on the nuclear program. That recovery, however, was swiftly sold into, taking the indices back towards the day’s low by closing.
The sell-off in the bond market continued with the US 10-year bond yield rising to as high as 5.25%, a new 19-year high, while the 30-year bond yield jumped to as high as 5.57%, another high since 2004. The US two-year yield, which is more sensitive to the Fed policy, went up to as high as 4.95%.
According to analysts, swap markets are now pricing in at least three Fed rate hikes over the next 12 months of 25 basis points each, with a potential for a fourth one as well.
Crude oil prices touched $108 a barrel during the course of the day but pared some gains back towards the $106 a barrel mark on the back of two news developments. First, Bloomberg reported quoting sources that the East-West pipeline has managed to restore 50% of its capacity with loading resuming at the Yanbu port last week. The second news was that of Trump willing to give some concessions to Iran, but the market did not give much emphasis to that.
Michael “big short” Burry said in his latest blog post that the AI bubble may burst sooner than he thought and that he is replacing his short positions in key AI stocks with “put” options. He is bearish on names such as Micron, Nebius, Palantir and the iShares Semiconductor ETF.Later today, the US Consumer Confidence data for the month will be reported along with the JOLTS job opening figures for August.