US stock market today: Wall Street benchmarks retreated on Thursday as a rise in oil prices renewed concerns about inflation and pushed bond yields higher. This reversed some of the relief that followed the US Treasury Department’s announcement a day earlier. The US stock market also came under pressure after Walmart shares declined following the company’s latest earnings report.The S&P 500 fell 0.4% and was headed for its fourth decline in the five sessions since reaching a record high last week. The Dow Jones Industrial Average dropped 430 points, or 0.8%, as of 10:15 a.m. Eastern time, while the Nasdaq composite was down 0.7%.
Treasury yields in focus
The bond market remains at the heart of the recent market turbulence, according to an AP report. Treasury yields climbed through the summer as investors worried about elevated inflation, enormous government debt burdens and other factors.Treasury Secretary Scott Bessent announced on Wednesday that his department would at least double its planned purchases of longer-term Treasurys between September 9 and November 4, jolting financial markets.The announcement initially brought yields down after the 10-year Treasury yield had reached its highest level in more than a year and the 30-year yield had returned to levels last seen in 2007, before the Great Recession drove borrowing costs sharply lower around the world.Elevated yields matter because they increase interest costs for households, businesses and the government, slowing economic activity while also putting pressure on stocks and other investments.Analysts had warned, however, that the impact of the Treasury’s buying plan could prove temporary. The purchases are small compared with the enormous size of the Treasury market and do little to address the underlying concerns that had prompted investors to demand higher yields.Fresh developments quickly added to those concerns.US government debt surpassed $40 trillion on Wednesday, reaching another record just months after crossing $39 trillion in April. The increase reflects Washington’s continued spending at a level well above its revenues.
Oil prices rise
Oil prices added to the pressure on Thursday. Brent crude rose 2.5% to $93.90 a barrel as uncertainty continued over when the war with Iran might allow oil tankers to resume unrestricted passage out of the Persian Gulf. President Donald Trump threatened Iran late Wednesday with “the MOST CRUSHING ECONOMIC OPERATION EVER TAKEN AGAINST ANY COUNTRY” but offered few details.The rise in oil prices helped lift the 10-year Treasury yield to 4.69% from 4.65% late Wednesday, bringing it close to the 4.71% level recorded late Tuesday, before the Treasury Department announced its planned purchases.Two relatively positive economic reports also contributed to higher longer-term Treasury yields, which are influenced by expectations for future economic growth and inflation. One showed that weekly applications for unemployment benefits were lower than economists had anticipated, while another indicated that manufacturing activity in the mid-Atlantic region was considerably stronger than expected.
Stock movement
On Wall Street, Walmart was the biggest drag on the S&P 500, with its shares plunging 8.7% despite the retailer reporting quarterly profit and revenue above analysts’ expectations. Investors instead focused on a key underlying indicator of sales growth, which slowed for another quarter. Walmart’s profit outlook for the current quarter also came in below Wall Street’s forecast.Because of its enormous scale, Walmart provides an important indication of the health of consumer spending across the US. A weaker-than-expected report on overall US retail sales for the previous month had already raised concerns that high inflation and a less resilient job market could be putting pressure on household spending.Advance Auto Parts fell 22.2% after reporting lower-than-expected quarterly revenue, although its profit beat estimates. CEO Shane O’Kelly said that “tighter household budgets constrained spending more than we anticipated, especially during the last four weeks of the quarter.”Consumer spending is a crucial driver of the US economy, meaning any significant pullback could deepen the slowdown in economic growth that is already under way.Travel companies could face an additional squeeze if consumers cut spending. They would have to contend with weaker bookings at the same time as higher fuel costs. Norwegian Cruise Line Holdings dropped 4.2%, United Airlines declined 2.6% and American Airlines fell 2.5%.Deere helped limit the broader market’s decline after the company reported quarterly revenue and profit that exceeded analysts’ expectations. Its shares rose 4.1% after the company said order trends suggested its agricultural equipment business was positioned to accelerate following this year.Oil producers also advanced as crude prices climbed. Exxon Mobil gained 1.8%, while ConocoPhillips rose 3%.
