(Bloomberg) — Stocks fell as traders trimmed their bets on Federal Reserve rate cuts, sending Treasury 10-year yields above 4%. Oil rallied as the market waited to see if Israel will retaliate against Tehran for a missile attack last week.
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Without much on the economic calendar on Monday, Wall Street awaited a raft of Fed speakers and key inflation data later this week. In the wake of surprisingly strong job growth for September, expectations for a continued slowdown in inflation reinforced speculation that policymakers will opt for a smaller rate reduction next month.
Money markets no longer see another half-point cut this year, while a quarter-point reduction in November that was seen as certain is now priced at a 86% probability.
“Friday’s strong jobs report not only appeared to kill any chance of a 50-basis-point rate cut in November, it kickstarted chatter about the Fed leaving rates unchanged if economic data continues to come in hotter than expected,” said Chris Larkin at E*Trade from Morgan Stanley. “But as last week showed, geopolitics can’t be ignored — any escalation of the situation in the Middle East has the potential to ramp up volatility.”
The S&P 500 fell to around 5,730. Treasury 10-year yields rose six basis points to 4.02%. West Texas Intermediate crude climbed 1.5% to $75.46 a barrel.
Corporate Highlights:
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Chevron Corp. agreed to sell stakes in oil sands and shale assets in Western Canada to Canadian Natural Resources Ltd. for $6.5 billion.
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Activist investor Starboard Value has taken a stake of about $1 billion in Pfizer Inc. and is seeking to spur a turnaround of the struggling pharmaceuticals giant, according to a person familiar with the matter.
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Amazon.com Inc. fell as Wells Fargo & Co. cut the recommendation on the e-commerce and cloud computing giant to equal-weight from overweight, saying the company faces multiple headwinds.
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Casino stocks gained after Wynn Resorts Ltd. received a commercial gaming operator’s license in the United Arab Emirates.
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Air Products and Chemicals Inc. climbed after the Wall Street Journal reported activist investor Mantle Ridge has a more than $1 billion stake in the company, citing people familiar with the matter.
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Apollo Global Management Inc. agreed to buy Barnes Group Inc. in an all-cash transaction that values the technology and aerospace manufacturer at about $3.6 billion.
Key events this week:
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Fed speakers include Raphael Bostic, Susan Collins, Philip Jefferson and Adriana Kugler, Tuesday
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Fed minutes, Wednesday
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Fed speakers include Lorie Logan, Raphael Bostic, Austan Goolsbee and Mary Daly, Wednesday
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US initial jobless claims, CPI, Thursday
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Fed speakers include John Williams and Thomas Barkin, Thursday
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US PPI, University of Michigan consumer sentiment, Friday
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JPMorgan, Wells Fargo kick off earnings season for the big Wall Street banks, Friday
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Fed speakers include Lorie Logan, Austan Goolsbee and Michelle Bowman, Friday
Some of the main moves in markets:
Stocks
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The S&P 500 fell 0.2% as of 9:30 a.m. New York time
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The Nasdaq 100 fell 0.4%
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The Dow Jones Industrial Average fell 0.3%
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The Stoxx Europe 600 rose 0.3%
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The MSCI World Index was little changed
Currencies
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The Bloomberg Dollar Spot Index was little changed
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The euro was unchanged at $1.0974
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The British pound fell 0.3% to $1.3080
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The Japanese yen rose 0.4% to 148.12 per dollar
Cryptocurrencies
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Bitcoin rose 0.8% to $63,120.38
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Ether rose 1.4% to $2,473.91
Bonds
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The yield on 10-year Treasuries advanced six basis points to 4.02%
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Germany’s 10-year yield advanced three basis points to 2.24%
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Britain’s 10-year yield advanced seven basis points to 4.20%
Commodities
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West Texas Intermediate crude rose 1.5% to $75.46 a barrel
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Spot gold fell 0.3% to $2,646.92 an ounce
This story was produced with the assistance of Bloomberg Automation.
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