US Stock Market Declines Amid Rising Oil Prices and Tech Stock Retreat
ASX set to retreat as tech stocks, rising oil prices weigh on Wall Street
The Sydney Morning HeraldImage: The Sydney Morning Herald
The US stock market experienced a significant decline on Friday, with the S&P 500 falling 1.2% from its record high. Rising oil prices, driven by ongoing geopolitical tensions, and a sell-off in technology stocks, particularly Nvidia and Micron Technology, contributed to the downturn. The Australian market is also expected to open lower, reflecting these global trends.
- 01The S&P 500 dropped 92.74 points to close at 7,408.50, while the Dow Jones fell 537.29 points to 49,526.17.
- 02Nvidia's stock fell 4.4%, while Micron Technology saw a 6.6% decline, despite both stocks having significant year-to-date gains.
- 03Brent crude oil prices rose 3.3% to $109.26 per barrel, significantly above pre-war levels of around $70.
- 04The yield on the 10-year Treasury increased to 4.59%, a notable rise from 4.47%, indicating growing inflation concerns.
- 05The Russell 2000 index, which tracks smaller US companies, fell 2.4%, reflecting the greater impact of rising borrowing costs on smaller firms.
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On Friday, the US stock market faced a notable decline as rising oil prices and a downturn in technology stocks weighed heavily on investor sentiment. The S&P 500 index fell 1.2% from its all-time high, closing at 7,408.50, while the Dow Jones Industrial Average dropped 537.29 points to 49,526.17. The decline was led by major tech stocks, with Nvidia and Micron Technology experiencing significant losses of 4.4% and 6.6% respectively, despite their strong performances earlier in the year. The surge in oil prices, with Brent crude settling at $109.26 per barrel, exacerbated inflation concerns and contributed to rising Treasury yields, which reached 4.59% for the 10-year note. This environment has led to increased borrowing costs, particularly impacting smaller companies, as reflected in the 2.4% drop of the Russell 2000 index. The broader market sentiment reflects worries about sustained inflation and the Federal Reserve's potential interest rate hikes, as traders reassess their expectations for monetary policy amid ongoing geopolitical tensions.
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The decline in stock prices and rising oil costs can lead to increased borrowing costs for households and businesses, potentially slowing economic growth.
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