The U.S. stock market started the week with a decline as bond yields and oil prices rose. According to preliminary FactSet data, the Dow Jones Industrial Average (DJIA) dropped approximately 195 points, or 0.6%, closing near 34,642. The S&P 500 index (SPX) also experienced a decline of around 0.4%, while the Nasdaq Composite Index (COMP) fell 0.1%.
Investors returned from the long Labor Day weekend with a more cautious stance due to weaker economic data from China and Europe. Additionally, concerns about oil markets added to the subdued sentiment. On Tuesday, oil prices (CL00) reached their highest level since November after Saudi Arabia and Russia announced an extension of oil supply production cuts until the end of 2023. The settlement price for West Texas Intermediate crude for October delivery (CL CLV23) stood at $86.69 per barrel.
Furthermore, U.S. Treasury yields also saw an increase, with the 10-year Treasury rate (BX:TMUBMUSD10Y) climbing to 4.267% during late afternoon trading. This rate represents the fourth-highest level of the year, according to Dow Jones Market Data. It is worth noting that the 10-year Treasury rate plays a significant role in determining the pricing of various financial products, including consumer loans and corporate debt.
The combination of rising bond yields and oil prices contributed to the overall bearish sentiment in the stock market on Tuesday. Investors will continue to monitor these factors closely as they evaluate their investment strategies in the coming days.