U.S. stocks finished lower Tuesday as renewed Middle East tensions pushed oil higher and revived inflation concerns ahead of this week’s inflation data. Brent crude oil reached 99 dollars per barrel after attacks on Saudi energy facilities raised fresh supply concerns. The Dow fell 628 points to 52,786; the S&P 500 declined 0.58% to 7,674; and the Nasdaq Composite slipped 0.32% to 26,421.
Market weakness was broad but uneven. Health care was the standout laggard, falling 2.5% as high profile clinical trials setback ripples across the biopharma industry. Energy gained roughly 1.3% alongside crude, while technology finished modestly positive, held up by the outstanding performance of a few chip giants.
While there is significant inflationary concerns, US Treasury yields have already reached an elevated level so there are minimal changes. The U.S. 5-year Treasury yield rose 1 basis points to 4.56%, while the 10-year yield increased 1 basis point to 4.79%. Gold, however, declined drastically at the 4400 mark because the case for near term rate hike has just become more convincing.
Tuesday’s economic releases had minimal impact because investor attention remains centered on whether this week’s inflation data reinforce or soften expectations for Federal Reserve policy. The Small Business Optimism survey yielded consistent results as prior month, and consumer credit expanded significantly compared to forecasts.
Thursday brings producer-price data and weekly jobless claims, followed by Friday’s CPI and preliminary consumer-sentiment reading. Those reports will be important inputs ahead of next week’s Federal Reserve meeting. Adams Wealth Advisors will continue monitoring market, inflation, and policy developments and keep you informed.