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Tuesday Roundup: Wall Street Fluctuates Amid Treasury Yield Surge: Energy Stocks Offer Respite

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On Tuesday, Wall Street underwent volatile trading, succumbing to the pressure induced by escalating Treasury yields as the investment community evaluates the potential trajectory of Federal Reserve's interest rate adjustments. Despite the turmoil, the surge in crude prices buoyed energy stocks, curtailing further losses. Notably, all major U.S. stock indices recorded appreciable gains in the preceding week, propelled by indications of a weakening labor market which fostered hopes of a halt in the Fed's fiscal tightening measures in the imminent future. Nevertheless, the evolving market dynamics have incited skepticism regarding the prospects of rate reductions, as expressed by Hugh Anderson, a managing director at HighTower Advisors.

Amidst this economic landscape, China's service sector demonstrated diminished vigor, expanding at its least brisk pace since the last eight months, as per recent data from a private-sector survey. This development exacerbated the frail market sentiment as trading resumed post the Labor Day hiatus. Consequently, the shares of Chinese enterprises listed in the U.S., encompassing PDD Holdings (PDD), (JD), Baidu (BIDU), and Alibaba (BABA) witnessed a decline ranging from 0.7% to 2.5%. Conversely, the energy sector experienced an uplift, soaring to a seven-month pinnacle, a direct consequence of Saudi Arabia and Russia extending their voluntary oil supply curtailments.

Meanwhile, sectoral performances varied considerably, with the energy sector leading with a 1.3% gain, buoyed by recent decisions of oil supply cuts by Saudi Arabia and Russia. In contrast, the utilities sector plummeted nearly by 2%, echoing the downward trend exhibited by the China-centric materials sector which dipped by 1.2%. A mixed bag of results was observed amongst major growth stocks; Amazon (NVDA) encountered decreases of 1.2% and 0.4% respectively, whereas Tesla (TSLA) enjoyed a 3.1% spike. Furthermore, data unveiled a 2.1% contraction in U.S. factory orders for July, snapping a four-month ascending trend.

On the corporate front, Airbnb and Blackstone emerged as significant gainers, registering increments of 7.7% and 3.6% respectively, in anticipation of their inclusion in the S&P 500 index. Additionally, Oracle observed a 2% augmentation following Barclays' (BCS) positive reassessment of the firm's stock from "equal weight" to "overweight". As the day progressed, the Dow Jones Industrial Average retreated by 0.19%, concurrently with the S&P 500 and Nasdaq Composite experiencing decreases of 0.26% and 0.18% respectively. Despite the prevailing uncertainty, Goldman Sachs (GS) optimistically revised the likelihood of a U.S. recession occurring within the next year, reducing the estimate from 20% to 15%.

About the Author

David Love is an editor at Quiver Quantitative, with a focus on global markets and breaking news. Prior to joining Quiver, David was the CEO of Winter Haven Capital.

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