US Stocks Near Records as Oil Prices Swing and Inflation Concerns Persist
US stocks showed little movement on Monday, following the latest fluctuations in oil prices. The S&P 500 gained 0.3%, nearing its summer record high by just 0.7%. Meanwhile, the Dow Jones Industrial Average dropped 135 points, or 0.3%, while the Nasdaq composite climbed 0.5%, eyeing a new record. Oil prices swung between $100 and $103 per barrel before settling at $101.94, down 0.3%. The volatility stems from ongoing uncertainty about the impact of the war with Iran on global crude supply.
Higher oil prices have contributed to rising bond yields, with the 10-year US Treasury yield edging up to 5.29% from 5.28%. This marks its highest level since 2002. Elevated yields could slow economic growth by increasing borrowing costs and discouraging investment in stocks and other assets. A report on Monday provided a mixed outlook for the US economy, showing that service sector growth slowed slightly in September but remained positive for a 27th consecutive month. However, input costs for these businesses accelerated, raising concerns about future inflation.
Wall Street anticipates at least one more interest rate hike by the Federal Reserve this year to combat inflation. The Fed last raised rates in September after a three-year pause. Two major buyout deals also made headlines: RXO surged 22.5% after C.H. Robinson Worldwide announced a $30.25-per-share cash acquisition, while PTC soared 34.9% following a $205-per-share cash offer from Schneider Electric, valuing the deal at $22.6 billion.
Internationally, France’s CAC 40 tumbled 1.1% amid growing worries over the country’s debt and budget strain. In contrast, Japan’s Nikkei 225 rallied 2.4%, driven by strong performance in technology stocks.