US stock market today: Wall Street drifts near all-time high; crude oil prices rise
US stock market today: Wall Street benchmarks traded in a narrow range on Monday, with the market remaining close to record levels, while crude oil prices rose amid continued uncertainty over when the Strait of Hormuz would reopen and allow the normal flow of global crude supplies to resume.The S&P 500 edged up 0.1%, fluctuating between modest gains and losses after closing at a record high on Friday. By 10:30 a.m. Eastern time, the Dow Jones Industrial Average had slipped 61 points, or 0.1%, while the Nasdaq composite was up 0.1%.
US stock market rally: Losing momentum?
The recent rally in equities has begun to lose momentum after being fuelled by a strong corporate earnings season in which large US companies reported sharply higher spring-quarter profits. According to FactSet, earnings per share for S&P 500 companies are on course to be 50% higher than a year ago, marking the strongest annual growth since the rebound that followed the COVID-induced economic downturn five years earlier.Among the latest companies to exceed market expectations was Berkshire Hathaway, according to an AP report.Over the weekend, the conglomerate founded by legendary investor Warren Buffett reported quarterly profit that topped analysts’ forecasts and disclosed that, under its new chief executive Greg Abel, it had deployed part of its sizeable cash reserves into equity investments.Berkshire Hathaway has long been known for acquiring stocks that it considers attractively valued, even as many investors argue that the broader US market appears expensive. Strong corporate earnings, however, help make elevated valuations appear more reasonable.Shares of Berkshire Hathaway gained 2.4%, with the company’s large market capitalisation making it one of the biggest contributors to gains in the S&P 500.MarineMax surged 45.9% after the retailer, marina operator and superyacht services provider announced an agreement to be acquired for about $1.5 billion in cash by a portfolio company of Blackstone.Varex Imaging soared 48.3% after Teledyne Technologies said it would acquire the X-ray imaging components manufacturer in an all-cash deal valued at $18.90 per share.Intel, meanwhile, weighed on the broader market, falling 4.2% after announcing plans that could involve selling $15 billion worth of stock. The company said the proceeds would likely be used to fund investments aimed at capitalising on the rapid expansion in artificial intelligence spending. Such a share sale would dilute the ownership of existing shareholders.
Oil prices rise
Brent crude prices continued to climb in the oil market, rising 2.8% to $85.86 a barrel. During the previous month, prices had fluctuated sharply between $72 and $102 as expectations repeatedly shifted over whether the US and Iran would reach an agreement that would allow oil tankers to resume unrestricted shipments from the Middle East to global markets.Investor optimism has since given way to greater caution, pushing Brent crude back to levels seen earlier this month, as well as during mid-July, mid-June and the opening week of the conflict in March.Rising crude prices add to inflationary pressures, making Wednesday’s inflation report the key event for Wall Street this week. Economists expect the data to show consumer inflation eased to 3.4% last month from 3.5% in June.A moderation in inflation would reduce pressure on the Federal Reserve to raise interest rates. Although higher borrowing costs help contain inflation, they also weigh on economic activity by making loans more expensive for US households and businesses, while also reducing the appeal of equities and other investment assets.Wall Street’s expectations for another interest rate increase eased after Friday’s employment report showed unexpectedly weak hiring across the US. Even so, CME Group data indicates that traders continue to assign a 46% probability to the Federal Reserve raising its benchmark interest rate at its September policy meeting.The yield on the benchmark 10-year US Treasury note climbed to 4.68%, compared with 4.65% at Friday’s close.Overseas equity markets delivered a mixed performance. European indexes traded unevenly after most Asian markets had advanced, with Japan’s Nikkei 225 posting one of the strongest gains globally after rising 2.1%.
