- US stocks finished lower after a late-session dive as investors weighed new recession warnings.
- The spread between the yields on the 10-year and 2-year Treasurys inverted to their deepest point since 2007.
- Oil prices sank, with Brent crude following West Texas Intermediate below $100 per barrel.
US stocks finished lower after a late-session dive as investors weighed new recession warnings while fresh COVID-19 restrictions in China dimmed prospects for growth.
The spread between the yields on the 10-year and 2-year Treasury notes inverted to their deepest point since before the 2008 financial crisis. The widely followed recession indicator inverted briefly earlier this year as well. Meanwhile, several cities in China have implemented new restrictions to tamp down increases in coronavirus cases.
Markets could get another jolt early Wednesday, when the Labor Department releases the June consumer price index. Analyst expect year-over-year inflation will accelerate to 8.8% from 8.6% in May, keeping pressure on the Federal Reserve to continue its aggressive pace of policy tightening.
Here's where US indexes stood shortly after the 4 p.m. closing bell on Tuesday:
- S&P 500: 3,818.80, down 0.92%
- Dow Jones Industrial Average: 30,981.33, down 0.62% (192.51 points)
- Nasdaq Composite: 11,264.73, down 0.95%
With earnings season under way, analysts at Bank of America said investors should brace for disappointing results, as companies struggle against low demand and growing fears of a recession. Early Tuesday, PepsiCo beat quarterly views and raised its full-year outlook. Delta Air Lines, JPMorgan Chase, Morgan Stanley and Citigroup report later this week.
Shares of Chinese electric car giant BYD fell Tuesday on fears that Warren Buffet's Berkshire Hathaway could potentially sell its position. About 225 million shares appeared in the Hong Kong stock exchange clearing system, matching the size of Buffett's BYD holdings, which represent a 20.5% stake.
The euro briefly hit exactly $1 for the first time in 20 years on Tuesday, after business sentiment in Germany hit a 10-year low. The euro has lost around 12% in value against the dollar already this year.
Oil prices could jump about 40% to $140 a barrel if Russian crude doesn't get hit with a proposed price cap, a senior US Treasury official said Tuesday
Oil prices fell as fears of a recession accelerated. West Texas Intermediate crude sank 7.9% to $$95.84 per barrel. Brent crude, the international benchmark, lost 7.4% to $99.17.
Gold slipped 0.4% to $1,724.80 per ounce. The 10-year Treasury yield dropped 3.3 basis points 2.958%.
Bitcoin fell 5.3% to $19,383.