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US Services Data Triggers Stock Market Decline, Boosts Dollar and Yields

Boosts, Data, Decline, Dollar, Market, Services, Stock, Triggers, Yields

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Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., August 15, 2023.

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Major U.S. stock indexes end lower

Oil prices end higher

Apple shares fall after report on China ban

World stock indexes fall while U.S. Treasury yield rises

NEW YORK, Sept 6 (Reuters) – World stock indexes fell while the benchmark U.S. Treasury yield rose and the U.S. dollar hit its highest in six months on Wednesday after stronger-than-expected U.S. services sector data suggested inflation pressures remain.

Apple shares drop after China ban report

Weighing heavily on Wall Street stock indexes, shares of Apple (AAPL.O) fell 3.6% after the Wall Street Journal reported, citing people familiar with the matter, that China had banned officials at central government agencies from using iPhones and other foreign-branded devices for work.

Strong non-manufacturing PMI raises concerns about interest rates

The Institute for Supply Management (ISM) said its non-manufacturing PMI rose in August, with new orders firming and businesses paying higher prices for inputs. Some investors said the data may add to signs that interest rates could remain elevated for longer. The U.S. Federal Reserve is still expected to pause in its rate hikes when it meets later this month.

Fed Bank of Boston President urges caution

Also on Wednesday, Fed Bank of Boston President Susan Collins said that while there are signs of progress in cooling inflation, now is a time for the central bank to proceed carefully when it comes to its next monetary policy steps.

Stock indexes decline, Nasdaq leads the way

The Nasdaq ended more than 1% lower, leading declines on Wall Street. Technology was down the most among major S&P 500 sectors. The Dow Jones Industrial Average fell 198.78 points, or 0.57%, to 34,443.19, the S&P 500 lost 31.35 points, or 0.70%, to 4,465.48 and the Nasdaq Composite dropped 148.48 points, or 1.06%, to 13,872.47.

European stocks and global stocks decline

The pan-European STOXX 600 index ended down 0.6% and MSCI’s gauge of stocks across the globe also shed 0.6%.

U.S. Treasury yield rises

The yield on the benchmark U.S. 10-year Treasury note rose 3 basis points to 4.298%. The yield has risen about 21 basis points over the past three sessions, its biggest three-day gain about a month.

Manufacturing activity declines in Europe

In other data, manufacturing activity in Germany, Britain, and the euro zone declined, while their service sectors fell into contraction territory.

Fed’s “Beige Book” shows modest economic growth

Also, the U.S. central bank’s latest “Beige Book” summary of surveys and interviews released on Wednesday showed economic growth was “modest” in recent weeks while job growth was “subdued” and inflation slowed in most parts of the country.

Dollar hits six-month high, oil prices rise

The dollar index rose to a fresh six-month high of 105.03 and was last at 104.85, up 0.1%, with the euro up 0.03% to $1.0723. Oil prices reversed early declines to end higher, as traders anticipated further draws on U.S. crude oil inventory. Brent crude futures settled up 56 cents at $90.60 a barrel while U.S. crude futures settled up 85 cents at $87.54.


In summary, major U.S. stock indexes ended lower, oil prices ended higher, and Apple shares fell after a report on a China ban. The U.S. Treasury yield rose, and the U.S. dollar hit a six-month high. The non-manufacturing PMI rose, raising concerns about interest rates. The Fed Bank of Boston President urged caution in monetary policy steps. Stock indexes declined, with the Nasdaq leading the way. European and global stocks also declined. Manufacturing activity declined in Europe, and the Fed’s “Beige Book” showed modest economic growth. The dollar hit a six-month high, and oil prices rose.

Reporting by Caroline Valetkevitch; additional reporting by Gertrude Chavez-Dreyfuss in New York and Nell Mackenzie in London and Kane Wu; Editing by Edmund Klamann, Sam Holmes, Will Dunham, and Sharon Singleton

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