Stock market today: Wall Street drifts as pressure from the bond market stays high

By STAN CHOE
AP Business Writer

NEW YORK (AP) — Wall Street is drifting Thursday, as pressure from the bond market remains high due to worries about a too-hot U.S. job market. Offering some relief, meanwhile, was another sharp drop for oil prices.

The S&P 500 was 0.3% lower in early trading, the latest stumble in what’s been a dismal run since the start of August. The Dow Jones Industrial Average was down 67 points, or 0.2%, as of 9:45 a.m. Eastern time, and the Nasdaq composite was 0.3% lower.

Stocks have struggled since the summer under the weight of soaring Treasury yields in the bond market, which undercut stock prices and crimp corporate profits. Yields have leaped as traders acquiesce to a new normal where the Federal Reserve is likely to keep its main interest rate at a high level for a long time, as it tries to extinguish high inflation.

Treasury yields bounced up and down Thursday after a report showed fewer U.S. workers applied for unemployment benefits last week than economists expected. That’s a sign fewer workers are getting laid off than expected, which is normally a good sign.

But the worry now is that too strong of a job market could put more upward pressure on inflation. That’s why the Fed has raised its main interest rate to the highest level since 2001, to intentionally slow down the job market.

“Even as the Fed has taken aggressive action to soften labor market conditions, businesses continue to hold on to workers,” said Rubeela Farooqi, chief U.S. economist at High Frequency Economics.

A more comprehensive report on the overall U.S. job market is due Friday, and economists expect it to show hiring slowed to a pace of 163,000 jobs in September from 187,000 in August. Perhaps just as importantly, economists are forecasting the report will show average wages rose 4.3% for workers in September, similar to August’s raise.

After initially jumping following the release of the jobless claims report, the yield on the 10-year Treasury pulled back as oil prices deepened their sharp slide. The 10-year yield was at 4.71%, down from 4.73% late Wednesday. Earlier this week, it hit its highest level since 2007.

The weeklong pullback in the price of oil has offered some relief on the inflation front. After charging from $70 in the summer to more than $93 last week, the price of a barrel of benchmark U.S. crude has slumped sharply. It fell another 1.4% to $83.01, a day after tumbling more than $5 for its worst drop in more than a year.

Brent crude, the international standard, lost 0.8% to $85.10 per barrel.

That meant more hits for stock prices of oil-and-gas companies, and Exxon Mobil fell 1.4%.

Lower oil prices, though, also mean savings for airlines, cruise ship operators and others that count fuel costs among their biggest expenses.

Carnival rose 2.1% for one of the larger gains in the S&P 500, and American Airlines gained 1.3%.

Clorox fell 6.3% after the company described how big a loss it expects to take for its latest quarter because of its previously disclosed cybersecurity attack. The company said its shipments had been in line with its expectations before the attack caused widespread disruptions.

Rivian Automotive sank 14.2% after the electric vehicle maker said it will raise $1.5 billion by selling debt that could later convert into stock.

In stock markets abroad, indexes were moving only modestly in Europe and much of Asia. Japan’s Nikkei 225 was an outlier and jumped 1.8%. It’s been one of the world’s better stock markets this year.

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AP Business Writers Yuri Kageyama and Matt Ott contributed.