by Sinéad Carew and Shristi Achar A

(Reuters) – The New York Stock Exchange ended lower on Tuesday amid rising bond yields and oil prices as investors kept in mind the course of the Bank’s rate hike campaign. Federal Reserve (Fed), fifteen days before the meeting of the American central bank.

The Dow Jones index fell 0.56%, or 195.74 points, to 34,641.97 points.

The broader S&P-500 fell 18.94 points, or 0.42%, to 4,496.83 points.

The Nasdaq Composite fell for its part by 10.86 points (0.08%) to 14,020.95 points.

While major Wall Street indexes posted gains last week amid optimism about a pause in Fed monetary tightening, that sentiment has since eroded.

Yields on U.S. Treasuries rose on the release of data indicating resilience in the U.S. economy and comments from Fed Governor Christopher Waller that the U.S. central bank did not need to change rates at short term.

Overwhelmingly, traders are banking on a pause in the rate hike cycle at the Fed’s monetary policy meeting on September 19-20. Some of them anticipate that rates will be maintained at their current level until November.

One of the reasons equities are struggling to advance is because interest rates continue to rise and are a good alternative to equities,” commented Paul Nolte, market strategist at Murphy & Sylvest Wealth Management, in Elmhurst, Illinois.

Separately, he noted, the recent rise in oil prices has hurt the Federal Reserve’s efforts to bring inflation back towards its 2% target. US crude prices rose on Tuesday.

“Everyone was expecting the Fed to stop or start cutting rates. That might not be the case,” Paul Nolte said.

While Wall Street was closed on Monday, a public holiday in the United States, investor sentiment was also affected by the publication of a private survey indicating that activity in the service sector in China increased in August at its rate the lowest in eight months.

Data released today showed that US factory orders declined in July, ending four straight months of growth.

Goldman Sachs has revised downwards, from 20% to 15%, the probability of a recession in the American economy over the next twelve months.

Among the major sectors of the S&P-500, energy was the best performer, gaining 0.5% after settling in session at a peak of around seven months, as Saudi Arabia and Russia announced that they were prolonging their drop in oil production.

On the values ​​side, among other movements to note, Airbnb and Blackstone rose, respectively by 7% and 3.6%, in the wake of the announcement of their entry into the S&P-500.

Oracle ended up 2.5% after Barclays raised its recommendation to “outperform”.

United Airlines fell 2.5% after falling 4.7% in the session on the sidelines of a computer glitch that forced the airline to ground its planes for several hours.

( Jean Terzian)

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