Highlights
Investors switched back to risk-off mode Monday as the market corrected following Friday's gains and reacted to rising oil prices and bond yields. The Dow Jones industrial average lost 0.9 percent, the S&P 500 fell 1.0 percent and the Nasdaq was off 1.2 percent. Bond yields, the dollar and oil prices all rose.
Fear of a wider war in the Middle East hit equity sentiment and oil supply disruptions drove oil prices higher, another negative. Bond yields have continued to rise after Friday's blowout employment report forced investors to upgrade expectations for the economy and downgrade hopes for Federal Reserve rate cuts. The benchmark 10-year note yield's move above 4% Monday attracted extensive negative attention. Investors also appeared spooked by the approach of yet another powerful hurricane expected to strike Florida soon, not long after the impact of Hurricane Helene.
Among sectors, only energy outperformed as Brent crude topped $80 after rising 13 percent in the last five days. On the downside, worst performers included consumer discretionary, utilities, real estate, materials, and consumer staples.
Stocks were lower through the morning but the selloff gathered momentum in the afternoon. Losses in megacaps weighed on the averages with Apple and Amazon leading the losses in the afternoon after negative analyst downgrades.
Fear of a wider war in the Middle East hit equity sentiment and oil supply disruptions drove oil prices higher, another negative. Bond yields have continued to rise after Friday's blowout employment report forced investors to upgrade expectations for the economy and downgrade hopes for Federal Reserve rate cuts. The benchmark 10-year note yield's move above 4% Monday attracted extensive negative attention. Investors also appeared spooked by the approach of yet another powerful hurricane expected to strike Florida soon, not long after the impact of Hurricane Helene.
Among sectors, only energy outperformed as Brent crude topped $80 after rising 13 percent in the last five days. On the downside, worst performers included consumer discretionary, utilities, real estate, materials, and consumer staples.
Stocks were lower through the morning but the selloff gathered momentum in the afternoon. Losses in megacaps weighed on the averages with Apple and Amazon leading the losses in the afternoon after negative analyst downgrades.
Definition
Market Reflections track market reaction to the trading day's major events. Economic data, policymaker speeches, and company news are featured in this report as well as key indexes and financial instruments.
Description
Understanding why markets respond as they do is fundamental for an investor. Market Reflections help explain how the day's events, news, and data impact the outlook for the economy and for market prices.
