In the midday trading session on Tuesday, US equity indexes displayed a mixed performance amidst volatile trading conditions, primarily influenced by a decline in government bond yields and a significant selloff in crude oil prices. The Nasdaq Composite registered a modest increase of 0.4%, reaching 16,944.5, while the S&P 500 index barely moved with a rise of less than 0.1% to 5,474.8.
Conversely, the Dow Jones Industrial Average experienced a drop of 0.5%, landing at 40,621.3. Notably, sectors such as real estate and consumer discretionary emerged as the top gainers throughout the trading session, whereas energy and financial stocks faced the steepest declines. On the economic front, the National Federation of Independent Business (NFIB) reported a drop in its monthly Small Business Optimism Index to 91.2 in August, a significant reversal from July's reading of 93.7.
This figure also falls below the 91.3 recorded during the same month last year. NFIB Chief Economist Bill Dunkelberg pointed out that "Historically high inflation remains the top issue for owners as sales expectations plummet and cost pressures increase." He added, "Uncertainty among small business owners continues to rise as expectations for future business conditions worsen," indicating a troubling outlook for small enterprises grappling with ongoing economic challenges. In terms of treasury yields, there was a noticeable decrease, with the 10-year yield falling by 4.7 basis points to 3.65%.
The two-year rate also dipped by 6.5 basis points, settling at 3.6%. This downward trend reflects investor caution amid fluctuating economic signals. Moreover, another significant economic indicator emerged as Redbook US reported a 6.5% increase in same-store sales year-over-year for the week ending on September 7, following a 6.3% rise the week prior.
The increase in sales was largely attributed to Labor Day promotions, particularly over the weekend, coinciding with the peak of the back-to-school shopping season. In the commodities market, West Texas Intermediate crude oil experienced a sharp drop, plummeting 4.3% to $65.76 per barrel. This decline can be attributed to ongoing demand concerns, highlighted by August's economic data from China, the world's leading oil importer, which revealed signs of producer-price disinflation.
Adding to the supply constraints, Tropical Storm Francine forced the temporary closure of several oil platforms in the Gulf of Mexico, impacting supply levels. Noteworthy commentary from PVM Oil Associates indicated that China is currently struggling to incentivize consumer spending, with its report highlighting a 7% decrease in the purchase of foreign crude oil year-over-year. In political news, anticipation is building for the first debate between former President Donald Trump and Vice President Kamala Harris, set to commence at 9:00 p.m.
ET. Market analysts are keenly observing this event, as it may influence market sentiment moving forward. "Our base case remains for gridlock, with divided government or small majorities unable to pass large, catch-all bills," a research note from the Wells Fargo Investment Institute emphasized. It further noted, "Given this backdrop and other factors, we think the economy is much more likely to move markets than elections," underscoring the prevailing economic unpredictability. In the realm of corporate news, Oracle Corporation ($ORCL) saw its shares surge more than 12% during intraday trading, positioning it as the top performer on the S&P 500.
This surge followed multiple price target upgrades from analysts after the company reported its fiscal Q1 results, which exceeded average analyst expectations in terms of both non-GAAP earnings and revenue. Conversely, shares of Hewlett Packard Enterprise ($HPE) declined by 7.5% intraday, making it the worst performer on the S&P 500 following the announcement of a $1.35 billion offering of convertible preferred shares. In the precious metals market, gold prices rose 0.4% to $2,542.61 per ounce, while silver experienced a slight dip, declining by 0.1% to $28.61 per ounce.
This market behavior reflects ongoing investor interest in safe-haven assets amidst broader economic concerns..