US Indexes Close Lower Wednesday With Inverted Yield Curve Concerns

The Dow Jones Industrial Average closed at 25,479.42 on Wednesday with a loss of 800.49 points or -3.05%. The Dow Jones reported its worst daily loss of 2019. The S&P 500 closed at 2,840.60 for a loss of 85.72 points or -2.93%. The Nasdaq Composite closed at 7,773.94 for a loss of 242.42 points or -3.02%. The VIX Volatility Index was higher at 22.18 for a gain of 4.66 points or 26.60%.

Wednesday’s market movers

Stocks couldn’t hang on to gains induced by Tuesday’s tariff reprieve as market’s faced a new uncertainty in the inverted yield curve on Wednesday. Tuesday’s data showed a rise in the Consumer Price Index, which, coupled along with reports of lower U.S. gross domestic product and global growth expectations, sent investors into Treasuries. As a result, the 10-year Treasury yield fell below the two-year for a short time during the trading day, which is typically a recession signal. The spread ended at approximately 0.01%.

Economic reports affecting market trading included the following:

The MBA Mortgage Applications Index increased 21.7% following an increase of 5.3%. The MBA’s average 30-year mortgage rate decreased to 3.93% from 4.01%. Export and import prices were released. Export prices increased 0.2% in July following a decrease of 0.6%. Year over year, export prices were down 0.9% following a decrease of 1.6%. Import prices increased 0.2% in July following a decrease of 1.1% . Year over year, import prices decreased 1.8% following a decrease of 2%. The EIA’s Weekly Petroleum Status report showed crude oil inventory up 1.58 million barrels following an increase of 2.385 million barrels.

In the S&P 500, the energy, financial and consumer discretionary sectors led losses. In the Dow Jones Industrial Average, the following stocks led losses:

Small-cap stocks

In small caps, the Russell 2000 closed

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