(Bloomberg) — Stocks fell as traders trimmed their bets on Federal Reserve rate cuts, sending Treasury 10-year yields above 4%. Oil rallied as the market waited to see if Israel will retaliate against Tehran for a missile attack last week.
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Without much on the economic calendar on Monday, Wall Street awaited a raft of Fed speakers and key inflation data later this week. In the wake of surprisingly strong job growth for September, expectations for a continued slowdown in inflation reinforced speculation that policymakers will opt for a smaller rate reduction next month.
Money markets no longer see another half-point cut this year, while a quarter-point reduction in November that was seen as certain is now priced at a 86% probability.
“Friday’s strong jobs report not only appeared to kill any chance of a 50-basis-point rate cut in November, it kickstarted chatter about the Fed leaving rates unchanged if economic data continues to come in hotter than expected,” said Chris Larkin at E*Trade from Morgan Stanley. “But as last week showed, geopolitics can’t be ignored — any escalation of the situation in the Middle East has the potential to ramp up volatility.”
The S&P 500 fell to around 5,730. Treasury 10-year yields rose six basis points to 4.02%. West Texas Intermediate crude climbed 1.5% to $75.46 a barrel.
Corporate Highlights:
Chevron Corp. agreed to sell stakes in oil sands and shale assets in Western Canada to Canadian Natural Resources Ltd. for $6.5 billion.
Activist investor Starboard Value has taken a stake of about $1 billion in Pfizer Inc. and is seeking to spur a turnaround of the struggling pharmaceuticals giant, according to a person familiar with the matter.
Amazon.com Inc. fell as Wells Fargo & Co. cut the recommendation on the e-commerce and cloud computing giant to equal-weight from overweight, saying the company faces multiple headwinds.
Casino stocks gained after Wynn Resorts Ltd. received a commercial gaming operator’s license in the United Arab Emirates.
Air Products and Chemicals Inc. climbed after the Wall Street Journal reported activist investor Mantle Ridge has a more than $1 billion stake in the company, citing people familiar with the matter.
Apollo Global Management Inc. agreed to buy Barnes Group Inc. in an all-cash transaction that values the technology and aerospace manufacturer at about $3.6 billion.
Key events this week:
Fed speakers include Raphael Bostic, Susan Collins, Philip Jefferson and Adriana Kugler, Tuesday
Fed minutes, Wednesday
Fed speakers include Lorie Logan, Raphael Bostic, Austan Goolsbee and Mary Daly, Wednesday
US initial jobless claims, CPI, Thursday
Fed speakers include John Williams and Thomas Barkin, Thursday
US PPI, University of Michigan consumer sentiment, Friday
JPMorgan, Wells Fargo kick off earnings season for the big Wall Street banks, Friday
Fed speakers include Lorie Logan, Austan Goolsbee and Michelle Bowman, Friday
Some of the main moves in markets:
Stocks
The S&P 500 fell 0.2% as of 9:30 a.m. New York time
The Nasdaq 100 fell 0.4%
The Dow Jones Industrial Average fell 0.3%
The Stoxx Europe 600 rose 0.3%
The MSCI World Index was little changed
Currencies
The Bloomberg Dollar Spot Index was little changed
The euro was unchanged at $1.0974
The British pound fell 0.3% to $1.3080
The Japanese yen rose 0.4% to 148.12 per dollar
Cryptocurrencies
Bitcoin rose 0.8% to $63,120.38
Ether rose 1.4% to $2,473.91
Bonds
The yield on 10-year Treasuries advanced six basis points to 4.02%
Germany’s 10-year yield advanced three basis points to 2.24%
Britain’s 10-year yield advanced seven basis points to 4.20%
Commodities
West Texas Intermediate crude rose 1.5% to $75.46 a barrel
Spot gold fell 0.3% to $2,646.92 an ounce
This story was produced with the assistance of Bloomberg Automation.
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