U.S. equities were decidedly lower in a shortened market session, with low volume, as a limited government shutdown continues into the holiday after a bill that addresses both parties’ concerns could not be passed, while trade worries and European political uncertainty remained. Reports on Treasury officials confirming market liquidity with major bank CEOs were mixed. Treasury yields were lower, gold was higher, and the U.S. dollar was down. Crude oil prices declined sharply as global economy concerns persisted.
The Dow Jones Industrial Average (DJIA) tumbled 653 points (2.9%) to 21,792, the S&P 500 Index dropped 66 points (2.7%) to 2,351, and the NASDAQ Composite fell 140 points (2.2%) to 6,193. In low volume, 657 million shares were traded on the NYSE and 1.6 billion shares changed hands on the NASDAQ. WTI crude oil declined $2.08 to $43.51 per barrel and wholesale gasoline was little changed at $1.32 per gallon. Elsewhere, the Bloomberg gold spot price gained $12.05 to $1,268.99 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—decreased 0.5% to 96.49.
Treasuries were higher, while the economic calendar was void of any major releases today, with the yield on the 2-year note dropping 5 basis points (bps) to 2.59%, the yield on the 10-year note decreasing 4 bps to 2.75% and the yield on the 30-year bond dipping 3 bps to 3.00%. The recent flattening of the yield curve and inversion of some short term yields compared to the 5-year have been a source of uneasiness.
The Fed’s fourth-rate hike of the year and less-dovish statement than some had hoped for last week, given the shaky global sentiment, appeared to exacerbated concern over a possible Fed mistake.
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