Stocks mostly follow crude, yields are lower; technology shakes it
- US Tech Stocks Resist Bearish Trend, Post Late Rally
- Oil prices fall as profit taking dampens OPEC + push
- US Treasury yields fall; dollar companies
NEW YORK, July 6 (Reuters) – Global equities mostly fell on Tuesday, as did bond yields and crude prices, as China’s latest tech crackdown and expectations of a hawkish Fed report on Wednesday have waved red flags against investors. The dollar rose slightly.
The technology-heavy Nasdaq Composite Index (.IXIC) held up to the decline in equities. After falling nearly 1% at midday, it rallied to close up 24.32 points, or 0.17%, at 14,663.64.
Previously, Chinese regulators cracked down on US ridesharing company Didi Global Inc (DIDI.N), dropping its shares by more than 20%. read more Other Chinese e-commerce companies listed in the United States, including Alibaba Group, Baidu Inc and JD.com, fell 3.5% to 4.6%.
Wider stock market indicators eased ahead of the release of the Federal Reserve’s Federal Open Market Committee (FOMC) minutes on Wednesday. Most investors expect the FOMC to confirm a hawkish trend, which means a slow tightening of monetary policy.
But a benign read could spark a “risk rally” over the idea that the Fed’s lax policies will continue, said Edward Moya, senior market analyst for the Americas at OANDA.
Despite the economic recovery in the United States, several million people remain unemployed due to the pandemic, so the United States still has room before the economy really picks up, he added.
The large S&P 500 (.SPX) lost 8.8 points, or 0.20%, to 4,343.54 and the much-watched Dow Jones Industrial Average (.DJI) lost 208.98 points, or 0.6% , at 34,577.37.
The dollar index (.DXY), which tracks the greenback against a basket of six currencies, rose 0.324 points, or 0.35%, to 92.536. The yen rose 0.01% to $ 110.6100.
U.S. bond yields fell after data suggested the U.S. economy may not be as dynamic as some feared. A large US service sector indicator showed moderate growth in June, down from the record pace in May. Read more
The data underpinned Friday’s U.S. jobs report, which many saw as showing an improving job market, but not at a pace fast enough to signal an economy prone to overheating. Read more
The yield on 10-year US Treasuries fell 6.5 basis points to 1.367%.
A month ago, these yields were widely expected to rise in the second half of the year, reaching perhaps 2% by the end of the year. Today, an equally popular view is that yields may have peaked for the year.
“It’s a major reversal for a lot of people,” Moya said.
Oil fell on Tuesday, reversing an initial rally after OPEC + producers called off a meeting due to clashes over plans to increase supply to meet growing global demand.
Brent crude last fell $ 2.24, or 2.9%, to $ 74.92 a barrel. US crude was last down $ 1.35, or 1.8%, to $ 73.81 a barrel.
The Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC +, dropped talks on Monday after the United Arab Emirates rejected an eight-month extension of production restrictions, meaning that ‘no agreement to increase production had been reached. Read more
Some OPEC + sources said a new meeting would take place in the coming days and would lead to an increase in supply in August.
Additional reporting by Marc Jones in London, Scott Murdoch in Singapore; Editing by Alexander Smith, Cynthia Osterman and Richard Pullin
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