New York stocks fell across the board as investors expressed disappointment at a US-China summit that ended without an agreement on opening the Strait of Hormuz or any clear economic achievements.
The Dow Jones Industrial Average closed at 49,526.17 on Wednesday (local time), down 537.29 points, or 1.07%, from the previous session. The Standard & Poor's 500 Index fell 92.74 points, or 1.24%, to 7,408.50, while the Nasdaq Composite Index declined 410.08 points, or 1.54%, to 26,225.14.
Among top technology stocks by market capitalization, Nvidia fell 4.43%, while Amazon dropped 1.15%, Google parent Alphabet declined 1.05%, Broadcom fell 3.19%, Tesla declined 4.73%, Facebook parent Meta slipped 0.64%, and Micron tumbled 6.64%. Only Apple (0.68%) and Microsoft (3.05%) managed gains in the down market.
New York stocks opened lower on disappointment that President Donald Trump did not ask Chinese President Xi Jinping for anything regarding the opening of the Strait of Hormuz during the November 14-15 US-China summit. Concerns also spread that the war could resume as no breakthrough emerged on ending the Iran conflict. US Trade Representative Jamieson Greer drew a line in a Bloomberg TV interview that day, saying, "We did not discuss chip export controls at the summit." Trump said in a Fox News interview on November 14 that China had pledged to purchase 200 Boeing aircraft, but the market interpreted this not as an achievement but as falling short of previous expectations for the sale of 500 aircraft. Accordingly, Boeing, which plunged 4.73% on November 14, fell an additional 3.80% on Wednesday.
Financial markets were heavily shaken as April's Consumer Price Index (CPI) and Producer Price Index (PPI), released on November 12-13, came in higher than expected, and the likelihood that international oil price increases stemming from the Iran war would not abate grew. Global bond yields surged on Wednesday, the day Federal Reserve Chairman Jerome Powell stepped down. The yield on the 10-year US Treasury note, the global bond benchmark, rose 0.12 percentage point intraday to 4.58%. The yield on the 2-year US Treasury note, which is sensitive to monetary policy, also rose 0.09 percentage point intraday to 4.08%, while the yield on the 30-year long-term Treasury bond, which serves as a benchmark for US mortgages and prime corporate bonds, jumped 0.10 percentage point intraday to 5.12%. Since bond prices move inversely to yields, rising Treasury yields mean prices have fallen by the corresponding amount.
According to the CME FedWatch tool, the federal funds rate futures market on Wednesday raised the probability that the Federal Reserve would hold rates steady at the June 16-17 Federal Open Market Committee (FOMC) meeting to 99.2%. The probability of holding rates through year-end stood at 50.2%, with a 49.4% probability of a rate hike and a 0.4% probability of a rate cut.
International oil prices also rose in the wake of the US-China summit. On the ICE Futures Exchange in London, Brent crude futures for July delivery closed at $109.26 per barrel, up 3.4% from the previous session. On the New York Mercantile Exchange, US West Texas Intermediate (WTI) crude futures for June delivery rose 4.2% to settle at $105.42 per barrel.
