US Stocks Fall as Strong Business Activity Spurs Inflation Fears

US stocks fell on Wednesday after a strong report on US business activity raised worries about inflation. The S&P 500 dropped 0.6% and was 1.1% below its record set last month, while the Dow Jones Industrial Average decreased by 87 points or 0.2%. The Nasdaq composite also declined 1.1% from its all-time high.

The price for a barrel of Brent oil rose 2.4% to $101.59, reversing a decline that had been ongoing since it hit nearly $110 last week due to concerns about the war with Iran keeping oil bottled up in the Middle East.

However, even with its recent decline, the price for a barrel of Brent remains much higher than the roughly $72 it cost before the war began. The increase in oil prices has pushed yields higher in the bond market, slowing the economy by making borrowing more expensive.

The yield on the 10-year Treasury jumped to 5.05% from 4.96% late Tuesday, a significant move for the bond market. Chris Williamson, chief business economist at S&P Global Market Intelligence, stated that costs for businesses are jumping at the fastest rate in four years, partly due to more expensive fuel.