US Stocks Ease As Oil Price Spikes To 10-Month High, Dollar Gains: What's Driving Markets Tuesday?

The U.S. stock market resumed trading Tuesday following the Labor Day holiday, and investor confidence appears subdued due to concerns stemming from a significant surge in oil prices resulting from the announcement of prolonged production cuts by Russia and Saudi Arabia.

The major U.S. stock indices traded largely flat on the day, while the energy sector significantly outperformed other sectors, with utilities and industrials facing notable declines.

Simultaneously, the U.S. dollar exhibited strength due to growing concerns about a slowdown in economic momentum in Europe, and despite remarks from Fed officials indicating a cautious approach and hinting at a preference for maintaining interest rates at their current levels in September.

Fed futures indicate a nearly 95% probability of rates remaining unchanged this month.

Tesla Inc. (NASDAQ:TSLA) experienced a notable surge of 4.3%, nearly recovering its losses from the previous session, driven by production rebound at the Shanghai’s factory.

Cues From Tuesday’s Trading

The S&P 500 and the Dow Jones Industrial Average both registered a decline of 0.15%. In contrast, the Nasdaq 100 showed a modest 0.2% gain, while small-cap stocks in the Russell 2000 index experienced a notable drop of 1.6%.

US Index Performance On Tuesday

Thursday’s Trading In Major US Equity ETFs

• The SPDR S&P 500 ETF Trust (NYSE:SPY) was 0.2% lower to $540.59.
• The SPDR Dow Jones Industrial Average ETF (NYSE:DIA) fell 0.2% to $348.41.
• The Invesco QQQ Trust (NASDAQ:QQQ) gained 0.3% to $378.84, according to Benzinga Pro data.

Looking at S&P 500 sectors:

• The Energy Select Sector SPDR Fund (NYSE:XLE) rose the most, up nearly 1.5%, sharply outperforming the others.
• The Utilities Select Sector SPDR Fund (NYSE:XLU) was the laggard, down 1.8%, followed by the Industrials Select Sector SPDR Fund (NYSE:XLI), down 1.3%.

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Stocks In Focus:

Airbnb Inc. (NASDAQ:ABNB) soared 8% after the announcement the company will be included in the S&P 500 Index.

Vail Resorts Inc. (NYSE:MTN) rose over 5%, after the company was upgraded to Buy at Stifel ahead of the new ski season.

Occidental Petroleum Corp. (NYSE:OXY) rose over 3%, marking the best performance among oil-related stocks.

Illumina Inc. (NASDAQ:ILMN) experienced a drop of more than 4% after announcing Jacob Thaysen as its next CEO, nearly three months after the previous CEO left amid a proxy battle with activist investor Carl Icahn.

Commodities, Bonds, Other Global Equity Markets:

Crude oil soared 1.8%, with a barrel of WTI-grade crude trading at $87. The United States Oil Fund ETF (NYSE:USO) was 1.8% higher to $78.  

Treasury yields were steady, with the 10-year yield at 4.19% and the two-year yield at 4.88%. The iShares 20+ Year Treasury Bond ETF (NYSE:TLT) was 1% lower for the day. 

The dollar rose, with the U.S. dollar index, which is tracked by the Invesco DB USD Index Bullish Fund ETF (NYSE:UUP), up 0.5%. The EUR/USD pair, which is tracked by the Invesco CurrecyShares Euro Currency Trust (NYSE:FXE), was 0.5% lower to 1.0730.

European equity indices had a negative session. The SPDR DJ Euro STOXX 50 ETF  (NYSE:FEZ) fell 0.9%. 

Gold edged 0.5% lower to $1,927/oz, while silver fell 1.5% to $23.56. Bitcoin (CRYPTO: BTC) was 0.3% lower to $25,753.

Staff writer Piero Cingari updated this report midday Monday. 

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