On Monday, the 30-stock Dow shed 0.2%, while the tech-heavy Nasdaq increased by 0.7% and the benchmark S&P inched only marginally higher. All three ended September and the third quarter lower., which jumped to its highest level since 2007 after data showed that American factory activity contracted by its smallest amount in about a year. Yields typically increase as prices fall. The 10-year reached 4.758%.
The numbers pointed to resilience in the world's largest economy, supporting some predictions that the Federal Reserve could choose to keep interest rates higher for a longer period of time. A hawkish stance from the Fed last week has persuaded many investors to recalibrate their rate expectations, with futures markets now betting that borrowing costs will stand at 4.7% by the end of next year -- implying fewer cuts than previously anticipated from the current range of 5.25% to 5.50%.
The U.S. manufacturing data on Monday fueled projections that the Fed may choose to keep rates higher for longer, pushing the U.S. dollar up against a basket of other currencies. The prospect of both higher borrowing costs and a stronger U.S. dollar could make oil more expensive for buyers holding other currencies, potentially hitting demand.
Further weighing on prices was an announcement from Turkey's energy minister that the country would restart operations on a pipeline from Iraq this week that had been suspended for nearly half a year. This somewhat muddled the outlook for supply, which has been recently driven by a decision by Saudi Arabia and Russia to extend production cuts until the end of 2023.We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other.
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