Investors are looking forward to the end of the month
Wall Street is struggling at the end of the day
September 27, 2023, 11:50 p.m
The US stock markets’ attempt to recover is being hampered by ongoing interest rate concerns. The indices fell significantly over the course of the day, then some investors sensed buying opportunities. But there is only a small plus in the technology stocks.
After the previous day’s heavy losses, Wall Street closed little changed on Wednesday. During trading, the stock exchanges slipped significantly into the red at times, but recovered again. The Dow Jones Index closed 0.2 percent lower at 33,551 points. The S&P 500 quoted almost unchanged during the Nasdaq increased by 0.2 percent. Investors continue to grapple with the impact of a prolonged period of elevated interest rates and the potential economic fallout, said Stephen Innes of SPI Asset Management.
At the US bond market Yields rose significantly again and remained at their highest level in 16 years. The yield on ten-year papers increased by 7.3 basis points to 4.61 percent; at times it had climbed to 4.63 percent.
According to analysts at Bespoke Investment Group, the end of the month can’t come soon enough. September is considered one of the worst months on the stock market, so investors are likely to be longing for its end. However, the current stress factors, namely high interest rates and the dispute in the USA over spending policy, are likely to remain in place for the time being. Authorities and other state institutions are threatened with closure on October 1st if the budget dispute is not resolved in time.
Oil prices continue to rise – gold prices fall
The dollar was stronger on the foreign exchange market. The Dollar index rose by 0.4 percent. The tailwind came from the continued rise in yields. The impending “shutdown” in the USA is also driving investors into the dollar, which benefits from its reputation as a “safe haven” in times of crisis, market participants said.
Oil prices rose significantly again. The prices for the varieties WTI and Brent climbed by up to 3.6 percent. Prices are being pulled up by supply concerns due to the production cuts maintained by Saudi Arabia. There are also concerns about falling inventories. Crude oil inventories in the USA have surprisingly decreased significantly. According to the state Energy Information Administration (EIA), they fell by 2.169 million barrels compared to the previous week. Analysts had expected a decline of just 0.6 million barrels.
The Gold price fell sharply again, weighed down by the stronger dollar and further increases in market interest rates. The price per troy ounce fell by 1.3 percent.
OpenAI, which is 49 percent owned by Microsoft, is apparently planning to sell existing shares and wants to significantly increase its valuation in the process. The AI startup behind chatbot ChatGPT is seeking a valuation of $80 billion to $90 billion, people familiar with the matter said. That would be three times the valuation achieved at the beginning of the year. The company has told investors it expects revenue of $1 billion this year. Next year it will be several billion. The share of Microsoft rose by 0.2 percent.
Costco Wholesale performed better than expected in the fourth fiscal quarter, but did not comment on any increase in membership fees. The shares rose by 1.9 percent. Meanwhile, the furniture manufacturer Millerknoll increased the profit forecast for the financial year ending in 2024. The share price jumped 28 percent.