US stocks close lower for the third consecutive day as oil and yields rise

The major U.S. stock indices are closing lower for the third consecutive trading day, pressured by rising oil prices, higher Treasury yields and continued concerns about inflation. Tomorrow, we get a piece of the inflation with the PPI data in the US that will be released at 8:30 AM. On Friday the more important CPI data will be released. The combination will have analysts piecing together the PCE inflation data which is the Fed favored measure of inflation.Brent crude moved above $100 per barrel ($101.64 was the intraday high) as escalating tensions in the Middle East increased concerns about disruptions to global energy supplies. WTI crude also moved sharply higher toward $97. Higher energy prices can feed into inflation, complicating the outlook for the Federal Reserve ahead of this week’s U.S. inflation data. Treasury yields also moved higher after the Treasury announced a $6 billion bond-buyback operation. Although that was above the previous $2 billion amount, some investors had hoped for a more aggressive response. The 10-year yield moved as high as 4.85%, increasing another headwind for equities. The closing levels show: Dow industrial average fell 405.04 points, or -0.77%, to 52,386.25 S&P 500 fell 37.16 points, or -0.48%, to 7,636.37 Nasdaq Composite fell 168.07 points, or -0.64%, to 26,253.34 Russell 2000 fell 38.97 points, or -1.32%, to 2,921.23 Nasdaq 100 fell 86.15 points, or -0.29%, to 29,421.55The Russell 2000 was the weakest of the major indices. Smaller companies tend to be more sensitive to rising borrowing costs, so the move higher in yields weighed more heavily on that index.The Nasdaq 100 held up better than the broader market, helped by a 6.55% rise in Meta following the launch of its Muse AI agent. The agent is designed to be more than just a chatbot. Instead of simply telling you how to complete a task, Muse can actually do the work for you. For example, you could ask it to plan a vacation, search for flights, make reservations and add the trip to your calendar. It can also send emails, shop online, complete forms and monitor things such as ticket availability—even after you close the app. The benefit is that it can save users time, but it also requires access to personal information and other apps. As a result, users will need to understand what permissions they are giving Muse and remain in control—especially before it sends information or spends moneyHowever, that strength was not enough to prevent the index from closing lower.Apple held its annual product event today, highlighted by the launch of the iPhone Duo, the company’s first foldable phone. The device opens to a 7.6-inch display, starts at $1,999 and will be available in October. Apple also introduced the iPhone 18 Pro and Pro Max, featuring improved cameras, longer battery life and expanded Apple Intelligence capabilities. Other announcements included the Apple Watch Series 12 and Ultra 4, with enhanced health and AI features, along with AirPods 5, which offer improved noise cancellation and real-time translation. The event also marked the first major product presentation led by new CEO John Ternus, who succeeded Tim Cook.  Shares of Apple were little changed at -0.28%.Despite the technology news,  the combination of oil above $100, Treasury yields near multi-year highs and three consecutive days of stock-market declines is a warning sign. The next major catalysts will be the U.S. Producer Price Index on Thursday and the Consumer Price Index on Friday. Stronger inflation readings could keep upward pressure on yields and maintain the more defensive tone in equities. Conversely, lower inflation could take pressure off the Fed to tighten in September.   This article was written by Greg Michalowski at investinglive.com.