After the holiday on Monday, the most important stock market indices start the new stock market week with losses. Little is happening on the bond market in early trading.
New York. Investors in the USA are starting the new stock market week cautiously. The major indices are lower in early trading on Tuesday.
The US standard value index Dow Jones lost 1.0 percent to just under 52,868 points.
The broader S&P 500 lost 0.4 percent to 7,691 points.
The technology-heavy Nasdaq Composite is barely changed at 26,482 points.
The Nasdaq 100, a reflection of the 100 non-financial companies with the highest market capitalization, is little changed at 29,585.
There was no trading on Wall Street on Monday due to a holiday. Even on Tuesday, the number of stock market-relevant appointments is rather small. Similar to Europe, rising energy prices are dampening the mood of investors.
After the Labor Day weekend, most of the major US indices fell slightly in early trading. “The yields on ten-year government bonds remain at just under 4.8 percent and oil continues to rise,” comments Markus Koch.
Over the next few days, monetary policy is likely to become the determining factor in the US markets. Next Friday, the US Department of Labor will publish the initial estimate for the development of inflation in August. Most recently, the inflation rate in the USA was 3.4 percent.
The interest rate decision by the US Federal Reserve (Fed) will follow next week. There is still no clear trend as to whether the monetary authorities will increase interest rates or not. Some central bankers have indicated their preference for this in view of the persistently high inflation.
Investors in the futures markets are also divided. Currently, the group of those who expect a rate hike is slightly in the majority. This is shown by a look at the Chicago Stock Exchange's Fed Watch Tool. Accordingly, almost 60 percent of investors expect the Fed to raise the key interest rate to a range of 3.75 to 4.0 percent.
There was also little movement on the bond market on Tuesday. The interest rate on ten-year US government bonds is 4.77 percent, down two basis points. Two-year bonds yield little changed at 4.37 percent. Rising interest rate expectations had significantly driven up bond yields in recent weeks.
Raw material prices under pressure
In view of the tensions in the Middle East, the price of the North Sea Brent crude oil market rose by up to 2.5 percent to $99.46 per barrel. The price for US light oil WTI rose by 3.6 percent to up to $94.73. Investors feared delivery bottlenecks after mutual attacks by the USA and Iran recently occurred again. At the same time, prices rose after the Saudi Arabian Energy Ministry reported attacks by the Yemeni Houthi militia on the country's energy facilities. As the day progressed, the surcharges ebbed somewhat, but oil prices initially continued to rise.
The tight supply outside the USA is driving the price of copper to a new record high. Copper for delivery in three months rose in price on the London LME metal exchange by almost two percent to up to $14.77 per ton. According to traders, the background is a strong outflow of copper to the USA. Tariffs on the industrial metal are expected there.
This is leading to a supply shortage in markets outside the US, says an analyst at Chinese broker Everbright Futures. Copper inventories in LME warehouses have fallen by almost 40 percent since the end of May. In addition, storms in Chile and the situation in the Middle East fueled concerns about supply, says Macquarie analyst Alice Fox. AI expansion, solar parks and power grids are driving demand for copper.
Individual values in focus:
Novartis: The Swiss pharmaceutical company has to accept another setback. In advanced phase III clinical trials with the drug del-desiran against the muscle disease myotonic dystrophy (type 1), Novartis missed the primary study goal. Novartis is losing almost ten percent on the Swiss stock exchange. The shares held in the USA lost almost 14 percent.
Boston Scientific: The biotech company fears a significant impact of a cyber attack on its business figures. The annual targets could also be missed. The stock is losing more than five percent.
Intel: The technology group's shares rose by more than ten percent after an upgrade at the top. Analysts at Northland Capital set the stocks at Outperform from Market Perform.
Lockheed Martin: UBS experts have raised their rating for the defense company to “buy”. The upgrade boosts the stock by more than two percent.
