U.S. equities finished lower, trimming a three-day rally that has come courtesy of hopes of further stimulus measures from China, Germany and the U.S., along with a recent reprieve from the plunge in global bond rates. Treasury yields were lower amid another empty economic calendar, and as market participants appeared somewhat cautious ahead of Friday’s key speech from Federal Reserve Chairman Jerome Powell in Jackson Hole, Wyoming. The U.S. dollar lost ground and crude oil prices were mixed, while gold finished higher. Earnings from the retail sector dominated equity news, as Dow member Home Depot posted mixed quarterly results, while Kohl’s and TJX disappointed with their earnings reports.

The Dow Jones Industrial Average (DJIA) fell 173 points (0.7%) to 25,692, the S&P 500 Index decreased 23 points (0.8%) to 2,901 and the Nasdaq Composite declined 54 points (0.7%) to 7,949. In moderately-light volume, 703 million shares were traded on the NYSE and 1.6 billion shares changed hands on the Nasdaq. WTI crude oil shed $0.01 to $56.13 per barrel and wholesale gasoline was $0.02 higher at $1.68 per gallon. Elsewhere, the Bloomberg gold spot price rose $9.19 to $1,505.11 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—was 0.2% lower at 98.13.

Treasuries were higher as the yield on the 2-year note was down 3 basis points (bps) to 1.50%, and the yields on the10-year note and the 30-year bond fell 5 bps to 1.55% and 2.03%, respectively. Bond yields were back under pressure following a recent relative reprieve from a sharp drop that has come amid global growth concerns, U.S.-China trade uncertainty, and heightened geopolitical uneasiness, while global central banks are highly expected to deliver further accommodation. Amid ramped-up market volatility, last week a drop in bond rates fostered a brief inversion of the yields on the 2-year and 10-year U.S. Treasury notes and a fall in the 30-year bond rate below 2.0% for the first time in history, to unnerve the global markets and accompany deeper dives into negative rates globally—notably in Europe.

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