Mixed Performance in U.S. Stocks Amid Concerns Over Rising Interest Rates

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U.S. Stocks Performance:
U.S. stocks exhibited mixed performance, primarily driven by tech stocks, as investors maintained concerns regarding elevated oil prices and the potential for rising interest rates. As of 11:37 (15:37 GMT), the Dow Jones Industrial Average saw an increase of 66 points or 0.2%. Conversely, the S&P 500 experienced a decline of 0.3%, while the NASDAQ Composite declined by 1%.

Previous Day’s Performance:
In the prior session, major Wall Street indices closed lower, with the Dow Jones Industrial Average decreasing by nearly 200 points or 0.6%. The Nasdaq Composite, which is tech-focused, dropped by 1.1%, and the broad-based S&P 500 fell by 0.7%.

Expectations of Fed Rate Hike:
Investor sentiment was impacted during this week due to concerns that robust economic data and rising oil prices might lead the U.S. Federal Reserve to maintain higher interest rates for an extended period. Recent data revealed an unexpected acceleration in the U.S. services sector in August, reaching a six-month high. Additionally, input costs for these businesses rose. The surge in crude oil prices to their highest level of the year has raised concerns about energy costs and their potential impact on inflation, further influencing expectations of future inflation.

Bond Yields and Fed Rate Hike Probability:
Bond yields have risen, reflecting increased expectations of another interest rate hike by the Fed by the end of the year. According to Investing.com’s Fed Rate Monitor Tool, the probability of the Fed raising rates at its November meeting now stands at 43.6%, up from 39.3% the previous day.

Jobless Claims Data:
New jobless claims were reported lower than expected at 216,000 for the previous week, compared to expectations of a rise to 235,000 from the prior week’s 228,000. The Federal Reserve closely monitors the labor market for signs of easing tight conditions, which are indicative of the effectiveness of its efforts to combat inflation.

Federal Reserve Officials’ Comments:
Several Federal Reserve officials are scheduled to speak later at a fintech conference hosted by the Philly Fed. Their comments are expected to be closely analyzed for insights into potential monetary policy changes, as this occurs ahead of the blackout period preceding each policy meeting.

Corporate News:
In corporate news, GameStop (NYSE: GME) reported revenue that exceeded quarterly estimates and a smaller-than-expected loss. Despite this, shares were down by 1.2%. ChargePoint (NYSE: CHPT) witnessed a stock decline of over 16% after the provider of EV charging stations missed revenue expectations.

Crude Oil Prices:
Oil prices experienced a decline on the back of weak Chinese trade data, pulling back from 10-month peaks. This development came despite another drawdown in U.S. inventories, signaling tightening supplies. The American Petroleum Institute reported a fourth consecutive week of decline in U.S. crude inventories, amounting to a reduction of 5.5 million barrels for the week ending September 1. The Energy Information Administration was set to release inventory data later in the day, providing further insights into the oil market.

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