Major stock indexes shook off an early slump and ended with meager gains on Wall Street Tuesday as worries about the economy continue to weigh on markets.
Oil prices slumped, bringing the price of U.S. crude back below $100 a barrel for the first time since early May. Tech stocks staged a turnaround and ended higher.
The S&P 500 eked out a gain of 0.2% and the tech-heavy Nasdaq rose 1.7%. The Dow Jones Industrial Average remained in the red, losing 0.4%. The yield on the 10-year Treasury note, which helps set mortgage rates, fell to 2.82%.
Energy companies performed especially poorly in line with a drop in oil prices. Tesla shares fell after the company reported its lowest quarterly sales numbers since last fall. Since the start of the year, the S&P 500 is down more than 20% and the Dow is down just more than 17%. These market declines come as current economic conditions are alluding to a recession.
Consumer sentiment is plunging as inflation remains well above the Federal Reserve’s 2% target level. And layoffs are beginning to mount in industries such as technology and real estate.
Oil prices decline
Benchmark U.S. crude fell below $100 a barrel on Tuesday after it gained $2.67 on Friday to $108.43 a barrel. Trading closed Monday in the U.S. for the Fourth of July holiday. Brent crude, the international standard, fell $10.53 to $103.02 a barrel. The war in Ukraine and its impact on energy supplies are casting a shadow over the global economic outlook at a time when central banks are raising interest rates to slow inflation.
The International Energy Agency said in a report Tuesday that high prices for natural gas and supply fears due to the war in Ukraine will crimp economic activity, slowing the growth in demand in coming years. The Paris-based agency forecast global demand for natural gas will rise by 140 billion cubic meters between 2021 and 2025, less than half the increase of 370 bcm seen in the previous five-year period. It said the revised forecast is mostly due to expectations of slower economic growth rather than buyers switching from gas to coal, oil or renewable energy.
Fed minutes due Wednesday
Minutes of the latest policy meeting of the Federal Reserve are due out on Wednesday and could bring hints on future policy.
The Fed has been aggressive in its shift from historically low interest rates at the height of the pandemic to unusually big rate increases. But, that has raised concerns that the central bank could go too far in raising rates and hitting the brakes too hard on economic growth, which could bring on a recession.
Wall Street has been closely watching the latest economic updates for more clues on how inflation is impacting the economy and whether that could shift the Fed’s position on rate hikes. Wall Street will get a closer look at the employment market on Friday when the government releases employment data for June.
