Fed Uncertainties and Tech Stock Weakness Drag U.S Indexes Lower

Barry Adams
08 Sep, 2023
New York City

Stocks traded down and Treasury yields inched lower as investors remained divided on the Federal Reserve's policy direction. 

Market indexes are lacking direction in September after facing volatile six weeks of trading following the worries of a rebound in inflation and a rise in energy prices. 

For the week, crude oil prices rose 2% and after Russia and Saudi Arabia extended voluntary production cuts till the year's end to bolster the price near the target level of $90 a barrel. 

On the international front, natural gas prices soared 10% in Europe after unions decided to strike at four LNG facilities in Australia, disrupting global supply of natural gas as early as next month. 

Japan's second quarter economic growth was revised lower to 4.8% from the previous estimate of 6% on an annual basis, the Cabinet Office said in Tokyo today. 

On a quarterly basis, GDP growth estimate was revised lower to 1.2% from the flash estimate of 1.5%. 

The Offshore Chinese yuan traded at a record low against the U.S. dollar since the start of trading in 2010. 

The Chinese yuan dropped as low as 7.51 but recovered to 7.356 as investors worry of rising capital outflow amid weak economic recovery and deepening property market woes. 

 

U.S. Indexes & Yields 

The S&P 500 index traded up 0.2% to 4,459.15 and the Nasdaq Composite fell 0.3% to 13,787.38. 

The yield on 2-year Treasury notes increased to 5.03%, 10-year Treasury notes inched higher to 4.29% and 30-year Treasury bonds edged down to 4.36%. 

Crude oil increased $0.31 to $87.19 a barrel and natural gas prices increased 3 cents to $2.61 a thermal unit. 

The dollar index, which tracks the price of the U.S. dollar against major currencies, halted a five-day rally but extended gains to the eight week in a row and rose to a six-month high on the expectations of higher interest rates. 

The dollar index hovered near 105 mark and extended gains from the low of 99.85 reached on July 13. 

 

U.S. Stock Movers 

Kroger Company declined 1.1% to $45 after the largest independent grocery retail chain reported mixed second quarter results. 

Separately, the company said it settled most claims related to opioid for $1.2 billion. 

Planet Labs PBC declined 7.7% to $2.84 after the satellite imagery company reported weaker-than-expected quarterly results and forecasted revenue below market expectations. 

Docusign Inc jumped 1% to $52.65 after the company reported better-than-expected revenue in its latest quarter. 

RH dropped 9.1% to $335 after the home goods retailer forecasted weak third quarter outlook citing weakness in the luxury residence market on elevated mortgage rates.