U.S. equities declined on Tuesday, weighed by a surge in crude prices and mounting concerns that the Federal Reserve may raise interest rates next week if incoming inflation data comes in hotter than expected.
The Dow Jones Industrial Average fell 1.18% to 52,786. The S&P 500 closed at 7,673, down 0.58%, while the Nasdaq finished at 26,421, slipping 0.32%. The Russell 2000 lost 0.52% to 2,960.
Brent crude closed at $99.32, up 2.39%, after Iranian-backed Houthi attacks on Saudi Arabia drove the benchmark toward the $99 level. West Texas Intermediate settled at $93.03, gaining 1.69%. Natural gas dropped 2% to $2.92.
The yield on the 30-year Treasury bond rose to 5.25%, up 3 basis points, while the 10-year note climbed 8 basis points to 4.79%. Gold retreated 1.14% to $4,354; Goldman Sachs reiterated its year-end target of $4,900. Silver fell 0.93% to $65.58.
Bitcoin slipped below $78,000 early in the session, touching a low of $77,603 before recovering to trade around $78,500. It had opened at $79,127 at 8:00 a.m. EDT. Ethereum quoted at $2,501.
Traders are bracing for two critical inflation prints this week: the producer price index on Thursday and the consumer price index on Friday. A rate increase at the Fed’s next governors’ meeting is on the table if those figures exceed forecasts.
On the research side, upgrades included M&T Bank, raised to Overweight from Equal Weight at Morgan Stanley with a $304 target; Martin Marietta Materials, bumped to Overweight from Equal Weight at Wells Fargo and lifted to a $609 target from $581; Thermo Fisher Scientific, upgraded to Buy from Neutral at UBS and boosted to $730 from $540; Figure Technology, raised to Neutral from Underperform at Bank of America with a $49 target; and Qualcomm, which earned a Strong Buy at CFRA without a price call.
Downgrades were led by Vulcan Materials, cut to Underweight from Equal Weight at Wells Fargo with its target lowered to $254 from $305; Eagle Materials, downgraded to Equal Weight from Overweight at Wells Fargo at a $196 target; Westlake Chemical Partners, reduced to Market Perform from Outperform at BMO Capital at $82; Klarna, lowered to Neutral from Buy at President’s Capital Management with a $16.30 target; and Patria Investments, sent to Underperform from Neutral at Bank of America at $10.
Initiations included Abercrombie & Fitch, started with an Outperform at BMO Capital targeting $170; Affirm Holdings, launched at Buy by Loop Capital with a $105 target; Oklo, given an Overweight at Piper Sandler at $55; Robinhood Markets, initiated with a Buy at StoneX targeting $170; and Ulta Beauty, opened at Market Perform by BMO Capital at $580.
