Markets Wrap: Stocks Decline as Traders Scale Back Fed Rate Cut Expectations
- US 10-Year Yield Tops 4% Amid Bond Selloff; Brent Oil Hits $80
- S&P 500 Dips, Amazon Falls on Downgrade; Pfizer Rises on Activist Stake
Stocks fell as traders pulled back on bets for Federal Reserve rate cuts, pushing Treasury 10-year yields above 4%. Brent crude surged to $80 a barrel, fueled by concerns over potential disruptions in the Middle East, including speculation of an Israeli attack on Iran’s oil infrastructure.
Strong job growth in September dampened hopes for a sharp inflation slowdown, leading markets to anticipate a smaller rate reduction next month. Money markets no longer expect a half-point cut this year, and the previously expected quarter-point reduction in November now has only an 80% probability.
The S&P 500 slipped to around 5,730. Amazon.com Inc. fell after an unusual analyst downgrade over margin concerns, while Pfizer Inc. climbed on reports that Starboard Value took a $1 billion stake in the company.
Corporate Highlights:
- Chevron Corp. (CVX) to sell stakes in Canadian assets to Canadian Natural Resources Ltd. for $6.5 billion.
- Casino stocks gain as Wynn Resorts Ltd. (WYNN) secures a commercial gaming license in the UAE.
- Air Products and Chemicals Inc. (APD) rose after activist investor Mantle Ridge acquired a stake exceeding $1 billion.
- Apollo Global Management Inc. (APO) to acquire Barnes Group Inc. in a $3.6 billion cash deal.
- Rivus Pharmaceuticals Inc. (private) eyes a potential US IPO in 2024, according to sources.
Treasury 10-year yields climbed to 4.03%, while West Texas Intermediate crude rose 3.6% to $77.04 a barrel.
