S&P500 falls as Treasury yields rise

The S&P 500 fell Tuesday, weighed by concerns over rising Treasury yields ahead of a key speech later this week from Federal Reserve Chairman Jerome Powell, as well as declines in banking and retail shares.

The S&P 500 edged 0.3 per cent lower to 4,387.55, while the Dow Jones Industrial Average slid 174.86 points, or 0.5 per cent to 34,288.83. The tech-heavy Nasdaq Composite eked out a small gain. Nvidia, which is slated to report earnings Wednesday, ended the session down 2.9 per cent – erasing an earlier gain.

Several regional and larger banks fell after S&P Global cut credit ratings and revised its outlook for multiple US banks on Monday, citing "tough" operating conditions.

KeyCorp and Comerica dropped 4.1 per cent each. Big bank JPMorgan Chase also fell 2.1 per cent.

Dick's Sporting Goods and Macy's fell by 24 per cent and 14 per cent, respectively, on cautious full-year forecasts, also leading the SPDR S&P Retail ETF lower. Dow member Nike slid more than 1 per cent for its ninth consecutive daily loss.

Wall Street has been focused on the bond market after the benchmark 10-year Treasury yield hit its highest level since 2007 this week. The 10-year yield eased slightly Tuesday to 4.33 per cent.
Moving on, investors are anticipating Powell's speech at the Kansas City Fed's annual economic symposium in Jackson Hole, Wyoming this Friday.

Turning to commodities, Sweden's Climate Minister plans to lift the uranium mining ban, aiming to double electricity production in 20 years. The majority in Parliament supports this. Notably, Sweden holds approximately 80 per cent of the EU's uranium deposits and presently conducts incidental uranium extraction while mining other metals.

Oil held a modest decline amid signs that supplies are rebounding while concerns linger about demand in China, the world’s biggest crude importer.

Turning to US sectors now, Real Estate was the best performer overnight, whilst Financials was the worst after S&P Global cut credit ratings for multiple US banks.

Lastly, a key business group has weighed into the debate over the government’s decision to block Qatar Airways from operating more flights into Australia, saying the move would cost the tourism industry an estimated $788m a year. In a letter to Transport Minister Catherine King, Australian Chamber of Commerce and Industry tourism chair John Hart said more international flights would help operators rebuild after years of crippling Covid-19 restrictions.

Futures

The SPI futures are pointing to a 0.2 per cent fall.

Currency

One Australian dollar at 7:20 AM was buying 64.23 US cents.

Commodities

Gold added 0.16 per cent. Silver gained 0.44 per cent. Copper added 0.91 per cent. Oil fell 0.46 per cent.

Figures around the globe

European markets closed higher. London’s FTSE added 0.18 per cent, Frankfurt gained 0.66 per cent, and Paris closed 0.59 per cent higher.

Turning to Asian markets, Tokyo’s Nikkei added 0.92 per cent, Hong Kong’s Hang Seng gained 0.95 per cent while China’s Shanghai Composite closed 0.88 per cent higher.

The Australian sharemarket closed 0.09 per cent higher at 7122.

Ex-dividends

AGL Energy (ASX:AGL) is paying 23 cents unfranked
AMP (ASX:AMP) is paying 2.5 cents 20 per cent franked
Domain Holdings Aus (ASX:DHG) is paying 4 cents fully franked
Downer EDI (ASX:DOW) is paying 8 cents unfranked
FSA Group (ASX:FSA) is paying 3.5 cents fully franked
Magellan Financial Group (ASX:MFG) is paying 69.8 cents 85 per cent franked
MyState (ASX:MYS) is paying 11.5 cents fully franked
VGI Partners Global (ASX:VG1) is paying 5 cents fully franked

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

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