Dow ticks lower overnight: WTI crude oil records best day since May

The Dow Jones Industrial Average fell Wednesday, building on the steep losses from the previous session, as an uptick in Treasury yields and oil prices dented investor sentiment.

The 30-stock index fell 68.61 points, or 0.20 per cent, landing at 33,550.27. Earlier in the session, it was up as much as 112.77 points. The S&P 500 edged up 0.02 per cent to close at 4,274.51, while the Nasdaq Composite added 0.22 per cent to end the session at 13,092.85.

The benchmark 10-year Treasury yield hit its highest levels since 2007. The 2-year Treasury yield also climbed.

Those moves come after the S&P 500 on Tuesday fell below the key 4,300 level for the first time since June. The Dow also posted its biggest one-day loss since March, dropping more than 300 points to close below its 200-day moving average for the first time since May.

Stocks have come under pressure recently from rising rates and disappointing economic data.

And it has been especially weaker for small and mid cap stocks. The Russell 2000 small-cap index has declined by 11 percent since its peak in July, including a 7 percent drop in September, leaving it more than 27 percentage points below its 2021 all-time high, in contrast to the S&P 500, which is down 7 percent over the same period and only 11 percentage points below its peak.

In commodity-related news, WTI crude oil prices have surged, marking their strongest daily increase since May and surpassing $93 per barrel, driven by ongoing concerns about tight supplies, which have been exacerbated by voluntary output cuts of 1.3 million barrels per day from Saudi Arabia and Russia, beyond their OPEC+ quotas, and are on track to register approximately a 28 per cent gain for the quarter.

Albemarle Corporation and Caterpillar Inc. have signed agreements to collaborate on sustainable mining and battery solutions, including the deployment of electric mining equipment and securing a lithium supply for Caterpillar's battery production. Their partnership aims to support the development of a zero-emissions lithium mine in North America and advance battery technology research.

Staying on the renewable energy front, Peru's copper production is anticipated to reach its peak in 2024 due to reduced mining investments, raising concerns about the pipeline of new mines amid growing demand for copper linked to the shift away from fossil fuels.

Turning to US sectors now, as a result of the surge in the price of oil, Energy was the best-performing sector, rising 2.5 per cent. Utilities was the worst performer for a second straight day.

Futures

The SPI futures are pointing to a 0.18 per cent fall.

Currency

One Australian dollar at 7:20 AM was buying 63.54 US cents.

Commodities

Gold has lost 1.51 per cent. Silver has dropped 2.03 per cent. Copper has fallen 0.34 per cent. Oil has gained 3.64 per cent.

Figures around the globe

European markets closed lower. London’s FTSE fell 0.43 per cent, Frankfurt lost 0.25 per cent, and Paris closed 0.03 per cent lower.

Turning to Asian markets, Tokyo’s Nikkei gained 0.18 per cent, Hong Kong’s Hang Seng gained 0.83 per cent while China’s Shanghai Composite closed 0.16 per cent higher.

The Australian sharemarket closed 0.11 per cent lower at 7,030.35.

Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.

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