US stocks fell for a third consecutive session on Wednesday as rising Treasury yields and oil prices continued to weigh on sentiment.
The Dow Jones Industrial Average dropped 405.41 points, or 0.77%, to 52,380.66. The S&P 500 fell 0.48% to 7,636.36, while the Nasdaq Composite declined 0.64% to 26,253.34. Treasury yields rose after the US Treasury Department said it would triple its buyback of longer-dated government debt to US$6 billion. The announcement fell short of some market expectations for larger purchases, with the 10-year Treasury yield climbing to 4.857%, its highest level since November 2023.
Higher oil prices added to inflation concerns as the prospect of a near-term resolution to the Iran war faded. Brent crude jumped 3.36% to US$101.21 a barrel, while West Texas Intermediate rose 3.25% to US$96.05, the highest settlements since May for both benchmarks.
The combination of higher energy prices and bond yields is adding pressure ahead of key US inflation data, which will help shape expectations for the Federal Reserve’s September policy decision.
Australian Market Outlook
Australian shares are set to open sharply lower as investors assess oil above US$101 a barrel, rising global bond yields and the implications for inflation and interest rates. The Australian dollar also strengthened to a four-month high near US72.20¢, adding another consideration for local companies with significant offshore earnings. Energy and resources stocks may receive some support from higher commodity prices, but rising borrowing costs are likely to weigh on the broader market and equity valuations. Attention remains firmly on developments in the Iran war and the outlook for oil, alongside upcoming US inflation figures and their potential impact on Federal Reserve rate expectations.
