Another selloff on commodity markets on Wednesday pulled stocks lower to close out another session in the red. The Nasdaq was the only benchmark index to close with gains, thanks to another boost to Apple (AAPL) shares.
The S&P 500 was down 0.06%, and the Dow Jones Industrial Average fell 0.18%. The Nasdaq remained in the green, rising 0.36%. Benchmark indexes had all climbed earlier in the session.
Crude oil prices notched another 3% loss on Wednesday, despite data showing a decline in crude inventories in the past week. The Energy Information Administration reported a decline of 600,000 barrels in crude stocks over the past week, a welcome sign of diminishing supplies in the face of tepid demand. The American Petroleum Institute reported an increase in U.S. crude oil inventories of 1.4 million barrels overnight.
Crude sold off a day earlier after the International Energy Agency said global demand growth was slowing by more than previously thought. The energy watchdog predicted the slowdown would continue in 2017. Commodity traders are already nervous over ballooning international supply.
West Texas Intermediate crude oil closed 2.9% lower at $43.58 a barrel on Wednesday.
Markets have moved in a wide range over the past three days, as Federal Reserve chatter left investors uncertain which way officials will vote at next week's policy meeting. Chances of an increase in interest rates this month now sit at around 15%, according to CME Group's Fed funds futures. This comes after welcomed dovish remarks from Fed Gov. Lael Brainard at the beginning of the week. The December meeting has higher chances at 45%.
"The set of prevailing conditions do not support further rate hikes, but we do expect most policymakers to hold out hope that a hike could soon be warranted," Morgan Stanley analysts wrote in a note. "This lends itself to the [Federal Open Market Committee] delivering a fairly benign statement that leaves the door open to hiking this year, then lets the incoming data either support it, or push hopes into next year."
Import and export prices in August fell, with imports dragged lower by declining fuel and food costs. Import prices declined 0.2%, the first decline in six months and double the expected drop. Export prices fell 0.8%, far sharper than an anticipated 0.1% decline. Soft inflation has been one reason for the Fed's caution in raising rates.
Apple led the Dow for the second day in a row as confidence in the iPhone 7's preorder performance continued to boost investor sentiment. T-Mobile (TMUS) and Sprint (S) reported robust demand for the new smartphone models in just the three days since they were unveiled. Apple was up 3.6% on Wednesday.
The world's largest company pulled other tech names into the green, particularly its suppliers. Parts suppliers Cirrus Logic (CRUS) , Jabil Circuit (JBL) , Broadcom (AVGO) and Texas Instruments (TXN) each moved higher.
Boeing (BA) weighed on the Dow after warning that production of 777 jets could be reduced further if sales continue to fall short this year. Output cuts would add pressure to hitting profit margin targets.
Monsanto (MON) agreed to a $56 billion acquisition by Bayer (BAYRY) after months of negotiations. Bayer has offered $128 a share, a 21% premium to Monsanto's Tuesday close and 44% above its levels in May before the initial offer. The companies expect to receive regulatory approval by the end of next year and, in the case of rejection, Bayer will deliver a $2 billion reverse antitrust breakup fee.
Speculation over the outcome of next week's Fed meeting will be rife in the coming days with little in the way of new information on which to trade. No Fed members are left to speak this week, few companies of note are set to report, save Oracle (ORCL) on Thursday, and economic data such as producer and consumer prices and retail sales are crammed into a busy Thursday and Friday.
September is historically the worst-performing month for stocks, with seasonal factors such as light trading volume and a general wariness over historical trading patterns. The Dow has fallen an average 1.1% in September since the benchmark index was created in 1896, compared to an average gain of 0.8% over the remaining 11 months.