Major stock indexes in Wall Street fell more than a percent on the background of the collapse of the energy sector stocks due to lower oil prices.
On the trading dynamics also affect underestimated prospects of higher interest rates in the near future. Recall, on the eve of comments voiced by the Federal Reserve Board of Governors member Lyell Breynar strengthened the confidence of market participants that at the September meeting of the regulator of any change in monetary policy will not be amended. The chances of a rate hike at the meeting in September were down after the publication of a number of macroeconomic reports, unrealistic expectations. These include, first of all, data on employment, as well as statistics on the ISM index and some other indicators. But despite published at the beginning of the month data, uncertainty about further Fed action was sufficiently high, the chances of a rate hike, according to the dynamics of futures on the federal funds, equal to about 30%. Statements Brainard substantially clarified the Fed’s intentions, is now the probability of a rate hike next week is estimated at only 15%.
Oil prices have fallen by about 3% after the report of the International Energy Agency, which added to concerns about global oversupply. In addition, yesterday in its monthly report, OPEC reported that in 2016, production in the United States, Russia, Norway and several other countries will be approximately 190,000 barrels per day higher than expected. This factor may indicate that oil production outside OPEC was stable, despite low oil prices.
Most DOW components of the index closed in negative territory (29 of 30). More rest rose stocks Apple Inc. (AAPL, + 2.55%). Outsider were shares of Chevron Corporation (CVX, -2.75%).
All business sectors S & P index showed a decline. Most of the basic materials sector fell (-3.4%).
At the close:
Dow -1.41% 18,066.89 -258.18
Nasdaq -1.09% 5,155.26 -56.63
S & P -1.48% 2,127.04 -32.00
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