**Airbnb and Blackstone Surge on S&P 500 Inclusion, Wall Street Closes Lower**
On Tuesday, Wall Street’s three major indexes closed lower, led by the Dow Jones Industrial Average, as Treasury yields and oil prices rose. The markets also assessed the Federal Reserve’s future interest rate plans. Despite last week’s gains in anticipation of a less hawkish Fed, these sentiments had faded by Monday.
Economic data showing resilience led to rising U.S. Treasury yields. This suggested the central bank may not need to alter rates anytime soon, according to Fed Governor Christopher Waller. Market strategist Paul Nolte from Murphy & Sylvest Wealth Management argued that the continuous rise in interest rates, offering a good alternative to stocks, was one reason why stocks were struggling.
Additionally, Nolte pointed out that the recent strength in oil prices, which rallied on Tuesday, was hindering the Fed’s efforts to push inflation back to 2%. “Everybody has been expecting the Fed to step aside or start cutting rates. That might not be the case,” he stated. Traders’ bets indicated a 93% chance that the Fed will leave rates unchanged at its September policy meeting and a roughly 54% chance of a pause in November.
**Sector Performance and Notable Market Movers**
Among the S&P 500’s 11 major sectors, energy was the top performer, closing up 0.5% after reaching a roughly seven-month high. This followed Saudi Arabia and Russia’s announcement of a further extension to their voluntary supply cuts. However, the materials and industrials sectors, which are sensitive to the economy, declined throughout the session, with respective declines of 1.8% and 1.7%. Interest rate-sensitive utilities also fell by 1.5%, making it the third weakest S&P sector for the day.
Airline stocks slid due to rising oil prices, implying higher fuel costs. This resulted in a 2.2% drop in the Dow Jones Transport index and a 2.4% decline in the S&P 1500 airlines index. United Airlines fell by 2.5% after a system-wide IT issue forced a one-hour aircraft ground stop.
**Significant Market News and Positive Outlook**
In other news, China’s services activity expanded at its slowest pace in eight months in August, according to a private sector survey. Furthermore, U.S. factory orders declined by 2.1% in July, ending a four-month streak of gains.
On a positive note, Goldman Sachs lowered its estimate for the chance of a U.S. recession in the next 12 months to 15% from 20%. Additionally, Airbnb and Blackstone saw their stocks rally by 7% and 3.6%, respectively, upon news of their inclusion in the S&P 500 index. Oracle shares also rose by 2.5% following Barclays’ upgrade of the software company to “overweight.”
Finally, declining issues outnumbered advancers on the NYSE by a 3.31-to-1 ratio; on Nasdaq, a 2.28-to-1 ratio favored decliners. The S&P 500 posted 12 new 52-week highs and 25 new lows; the Nasdaq Composite recorded 50 new highs and 142 new lows. On U.S. exchanges, 9.54 billion shares changed hands, compared with the 10.26 billion moving average for the last 20 sessions.
Original Story at www.reuters.com – 2023-09-05 20:31:00