Dow Drops 92 Points as Oil Rises Ahead of US-China Summit
Wall Street opened lower Wednesday as crude oil prices climbed and bond yields increased. Investors await US-China talks and Fed commentary.
Key points
- The Dow Jones fell 92.3 points to 51,771.41 as oil prices rose over 1 per cent.
- The Philadelphia chips index dropped 1.5 per cent, while Meta Platforms gained 1.5 per cent.
- Traders see a 50 per cent chance of an interest rate hike in October.
The Dow Jones Industrial Average fell 92.3 points to 51,771.41 on Wednesday. The S&P 500 dropped 2.7 points while the Nasdaq lost 30.8 points at the open.
Crude oil prices climbed over 1 per cent after five straight declines. Bond yields also rose, increasing concerns about elevated borrowing costs.
Oil and yields drive market caution
Brent crude remained near a two-week low despite the daily gain. Traders watch for signs that energy costs will stay high.
Yields on two-year and 10-year US government bonds ticked higher. This adds to fears that interest rates will remain restrictive for longer.
Chip stocks fall while Meta rises
The Philadelphia chips index shed 1.5 per cent in early trade. AMD, Nvidia, and Intel faced pressure as semiconductor shares declined.
Meta Platforms rose 1.5 per cent, extending its weekly gain. The stock follows a strong reception for its new AI assistant Muse.
Investors await US-China summit and Fed
President Xi Jinping is expected in Washington to extend the trade truce. Discussions include AI regulation and arms sales to Taiwan.
Fed governor Michael Barr is scheduled to speak later in the day. Traders are pricing in a 50 per cent chance of an October hike.
The Business Times reported that US business activity hit a five-year high. Declining stocks outnumbered advancers by a 3.26-to-1 ratio on the NYSE.
