Skip to main content

Stocks End Down, Nasdaq Drops and Oil Prices Rally

Stocks end lower on Wednesday, with the Nasdaq Composite giving up 2% and oil prices rebounding.

Stocks finished lower on Wednesday as bond yields steadied and oil prices rebounded after the Suez Canal was blocked by a huge container ship that ran aground.

The Dow Jones Industrial Average finished barely changed, off 3 points at 32,420. The S&P 500 gave up 0.55%, and the Nasdaq slipped 2.01% as tech shares underperformed.

Intel  (INTC)  finished down 2.3% after the chipmaker said it was investing $20 billion in two new factories in Arizona as it looks to create a foundry business to provide chips for other companies.

Besides Intel, Nike  (NKE)  and Salesforce  (CRM)  pushed down the Dow industrials. Leading winners were Chevron  (CVX)  and Dow.  (DOW)

Rotation, Rebalancing and COVID Worries Roil the Market

Stocks had finished lower on Tuesday. Bond yields retreated and oil prices plunged on worries that a resurgence of the coronavirus could delay a reopening of the global economy. The Nasdaq dropped 1.12%.

On Wednesday, bond yields declined. Federal Reserve Chairman Jerome Powell,  testifying before a congressional committee, said he expected inflation to move higher this year but added that the Fed's "best view is that the effect on inflation will be neither particularly large nor persistent.”

Powell told the Senate Banking Committee that prices could rise amid pent-up spending and supply-chain bottlenecks.

The central bank previously predicted that inflation, as measured by personal consumption expenditures, would rise 2.4% this year and then slow next year to 2%.

The 10-year U.S. Treasury yield was at 1.619% on Wednesday. The benchmark yield hit 1.754% last week, a 14-month high.

Demand at a Wednesday auction of five-year Treasury notes increased.

Oil prices in the U.S. rose 5.21% to $60.77 a barrel, rebounding from Tuesday's drop of as much as 6% on renewed lockdowns in Europe.

Prices soared Wednesday after the Suez Canal was blocked by a Taiwanese tanker that blew off course, creating a bottleneck that could slow the delivery of more than 13 million barrels of crude through one of the world's busiest waterways. 

Bitcoin rose 1.52% to $54,843 Wednesday after Tesla  (TSLA)  CEO Elon Musk said on Wednesday that the electric vehicle company would begin accepting the world's largest cryptocurrency as payment for its cars.

Tesla and Bitcoin: Jim Cramer Says Elon Musk Is a 'Pioneer'