In a volatile trading session on Wednesday, stocks saw a slight increase as bond market yields remained mixed. The bond market has been a significant driver for Wall Street recently.
- The S&P 500 experienced a 0.4% increase, adding 18.71 points to reach 4,376.95.
- The Dow Jones Industrial Average rose 0.2%, gaining 65.57 points to reach 33,804.87.
- The Nasdaq composite rose 0.7%, gaining 96.83 points to reach 13,659.68.
Despite a report showing higher than expected wholesale inflation, the yield on the 10-year Treasury fell once again. However, economists believe this may not be enough to prompt the Federal Reserve to raise interest rates again. Meanwhile, oil prices continued to decline after a surge earlier in the week.
Since the summer, Wall Street has been struggling as long-term bond yields rise, negatively impacting prices for various investments. Some relief has finally come this week, as yields have retreated following suggestions from Federal Reserve officials that they may not increase their main overnight interest rate any further. The yield on the 10-year Treasury fell from 4.66% to 4.59% since Tuesday, marking a regression from its highest level since 2007, which exceeded 4.80% last week. Aside from affecting investment prices, high yields have also led to higher rates for mortgages and loans, hindering economic momentum.
Furthermore, a further decline in crude oil prices has helped alleviate concerns about inflation and has supported Wall Street. The price of US crude oil dropped by $2.48 to settle at $83.49 per barrel. The international standard, Brent crude, fell by $1.83 to $85.82 per barrel. ExxonMobil faced additional pressure after announcing its acquisition of Pioneer Natural Resources in an all-stock deal worth $59.5 billion. Following the news, ExxonMobil’s stock declined by 3.6%, while Pioneer saw a 2.3% increase. This buyout represents Exxon’s largest since it purchased Mobil twenty years ago, creating an enormous fracking operator in west Texas. However, Birkenstock stumbled during its debut on Wall Street, with the distinctive sandal maker experiencing a 12.6% drop in its stock value. The initial stock price was set at $46 per share, valuing the company at $8.64 billion.
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