In a volatile trading session on Tuesday, U.S. equity indexes experienced declines, largely influenced by a reduction in government bond yields and a significant sell-off in crude oil prices. The Nasdaq Composite witnessed a drop of 0.3%, closing at 16,832.7, while the S&P 500 index fell by 0.4%, settling at 5,449.6.
The Dow Jones Industrial Average faced a more pronounced decrease of 0.9%, finishing at 40,474.7. Earlier in the trading session, both the S&P 500 and the Nasdaq had shown positive momentum, but this quickly reversed. Except for real estate, utilities, and consumer discretionary sectors, all other sectors experienced intraday losses. On the economic front, the Redbook report highlighted a year-over-year increase in same-store sales by 6.5% for the week ending September 7, slightly up from the previous week’s increase of 6.3%.
The report attributed this uptick in sales partially to Labor Day promotions over the weekend, coinciding with the peak of the back-to-school shopping season. Conversely, the National Federation of Independent Business's monthly Small Business Optimism Index revealed a decline, dipping to 91.2 in August, which more than offset the previous month's rise to 93.7 in July.
This figure was also lower than the 91.3 reported in the same month last year, indicating growing concerns among small business owners. On the bond market side, Treasury yields experienced a decrease, with the 10-year yield declining by 4 basis points to 3.66%, while the two-year rate dropped by 4.8 basis points, now standing at 3.62%.
This trend suggests a shift in investor sentiment, often seen as a reaction to market volatility. In the commodities market, West Texas Intermediate crude oil took a substantial hit, plunging by 4.3% to $65.75 a barrel. This notable decline reflects an oversupply in the market and waning demand expectations, contributing further to the equity market's struggles. Turning to individual company performances, Oracle Corporation ($ORCL) shares surged more than 12% in intraday trading, making it the standout performer on the S&P 500.
This remarkable increase followed multiple analysts upgrading their price targets after the company's fiscal Q1 results were announced. Oracle reported higher-than-expected non-GAAP earnings and revenue figures, surpassing average analyst estimates from Capital IQ, which played a significant role in the stock's climb. In contrast, Hewlett Packard Enterprise ($HPE) shares faced a decline of 7.7% during the session, marking the worst performance on the S&P 500.
The drop was attributed to the company's announcement of a $1.35 billion offering of convertible preferred shares, a move that raised concerns among investors about potential dilution and the company’s financing strategy. The contrasting fortunes of these two tech giants underscore the complexity of market dynamics, where investor sentiment can change rapidly based on corporate news and economic indicators..