U.S. Markets closed

US Indexes Close Lower Wednesday With Inverted Yield Curve Concerns

The Dow Jones Industrial Average closed at 25,479.42 on Wednesday with a loss of 800.49 points or -3.05%. The Dow Jones reported its worst daily loss of 2019. The S&P 500 closed at 2,840.60 for a loss of 85.72 points or -2.93%. The Nasdaq Composite closed at 7,773.94 for a loss of 242.42 points or -3.02%. The VIX Volatility Index was higher at 22.18 for a gain of 4.66 points or 26.60%.

Wednesday's market movers

Stocks couldn't hang on to gains induced by Tuesday's tariff reprieve as market's faced a new uncertainty in the inverted yield curve on Wednesday. Tuesday's data showed a rise in the Consumer Price Index, which, coupled along with reports of lower U.S. gross domestic product and global growth expectations, sent investors into Treasuries. As a result, the 10-year Treasury yield fell below the two-year for a short time during the trading day, which is typically a recession signal. The spread ended at approximately 0.01%.

Economic reports affecting market trading included the following:

  • The MBA Mortgage Applications Index increased 21.7% following an increase of 5.3%. The MBA's average 30-year mortgage rate decreased to 3.93% from 4.01%.
  • Export and import prices were released. Export prices increased 0.2% in July following a decrease of 0.6%. Year over year, export prices were down 0.9% following a decrease of 1.6%. Import prices increased 0.2% in July following a decrease of 1.1% . Year over year, import prices decreased 1.8% following a decrease of 2%.
  • The EIA's Weekly Petroleum Status report showed crude oil inventory up 1.58 million barrels following an increase of 2.385 million barrels.

In the S&P 500, the energy, financial and consumer discretionary sectors led losses. In the Dow Jones Industrial Average, the following stocks led losses:

  • Dow Inc. (NYSE:DOW) -5.61%
  • Walgreens Boots Alliance (NASDAQ:WBA) -4.62%
  • JPMorgan (NYSE:JPM) -3.93%

Small-cap stocks

In small caps, the Russell 2000 closed at 1,470.65 for a loss of 39.92 points or -2.63%. The S&P 600 closed at 902.75 for a loss of 27.14 points or -2.92%. The Dow Jones U.S. Small-Cap Growth Index closed at 9,505.15 for a loss of 284.95 points or -2.91%. The Dow Jones U.S. Small-Cap Value Index closed at 8,898.41 for a loss of 256.28 points or -2.80%.

Other notable indexes

Other notable index closes included the S&P 400 Mid-Cap Index at 1,837.80 for a loss of 55.71 points or -2.94%; the S&P 100 at 1,255.07 for a loss of 37.54 points or -2.90%; the Nasdaq 100 at 7,490.13 for a loss of 238.02 points or -3.08%; the Russell 3000 at 1,667.56 for a loss of 50.17 points or -2.92%; the Russell 1000 at 1,572.54 for a loss of 47.39 points or -2.93%; the Wilshire 5000 at 29,077.24 for a loss of 872.10 points or -2.91%; and the Dow Jones U.S. Select Dividend Index at 677.79 for a loss of 18.10 points or -2.60%.

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This article first appeared on GuruFocus.