Oil Drops by $5 a Barrel, Easing Inflation Pressure

Markets close higher after reports suggest economy is cooling
By Newser Editors and Wire Services
Posted Oct 4, 2023 3:45 PM CDT
Oil Drops by $5 a Barrel, Easing Inflation Pressure
Pump jacks work in a field near Lovington, New Mexico.   (AP Photo/Charlie Riedel, File)

Wall Street closed higher Wednesday as the bond market loosened its vise on the stock market.

  • The S&P 500 rose 34.30 points, or 0.8%, to 4,263.75, coming off a 1.4% tumble that sent it to its lowest level in four months.
  • The Dow Jones Industrial Average rose 127.17 points, or 0.4%, to 33,129.55, a day after wiping out its gains for the year.
  • The Nasdaq composite rose 176.54 points, or 1.4%, to 13,236.01.
Treasury yields eased to give the stock market some more oxygen after reports suggested the US economy may be cooling. Oil prices also tumbled by $5 per barrel to take some pressure off inflation and the threat of rates staying very high, the AP reports.

Wednesday's report from ADP suggested private employers added 89,000 jobs last month, a much sharper slowdown in hiring than the 140,000 that economists expected. On Wall Street, that's currently good news because the hope is a cooling job market would mean less upward pressure on inflation. That in turn could convince the Federal Reserve to take it easier on interest rates. A second report on the economy said that growth for businesses in the US services industry slowed in September by a touch more than economists expected.

Benchmark US crude fell $5.01 to settle at $84.22 per barrel, the worst drop in just over a year. It's been pulling back since topping $93 last week. Brent crude, the international standard, lost $5.11 to $85.81. Big oil-and-gas companies fell with the price of crude. Exxon Mobil dropped 3.7%, Chevron lost 2.3% and ConocoPhillips slid 3.7%. Cal-Maine tumbled 7.3% after the egg producer reported a sharp drop in profit for its latest quarter from a year earlier.

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On the winning side of Wall Street, Big Tech stocks were helping to support the market after leading it lower a day earlier. They tend to move more sharply with expectations for rates because high-growth stocks are seen as some of the biggest victims of high yields. Tesla jumped 5.9%, and Microsoft rose 1.8% to be two of the strongest forces pushing upward on the S&P 500 because of their massive size. Alphabet rose 2.1%.

(More stock market stories.)

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