Wall Street retreated on Thursday as a drop in oil prices weighed on energy shares and saw the S&P 500 snap a three-day winning streak, while the dollar marched higher.
The S&P 500 ended the day 0.3 per cent lower at 2,806.84 — with financials, the biggest gainer, posting a modest 0.3 per cent rise that was offset by a 2.2 per cent slide in energy and a 0.9 per cent drop in communication services. Energy shares were hit hard after US oil entered a bear market.
The Dow Jones Industrial Average was flat at 26,191.42, while the Nasdaq Composite declined 0.5 per cent to 7,530.89. The Russell 2000 index of small-cap stocks ended 0.4 per cent lower at 1,575.57.
The moves came as the Federal Reserve opted to leave interest rates unchanged and signalled it is on course for further rises in short-term rates, with the next move expected in December. While the statement was broadly as expected, economists called attention to the Fed’s failure to mention October’s sell-off.
“We’re slightly surprised the Fed didn’t mention the drop in stocks, though the rally over the past week means that the net impact on financial conditions since the market’s peak is very small,” said Ian Shepherdson, economist at Pantheon Macroeconomics.
Thursday’s modest drop follows Wednesday’s rally that saw the S&P 500 nab its best performance around US midterm elections since 1982.
Meanwhile, the yield on the US 10-year Treasury note was up 0.4 basis points to 3.239 per cent, while that on the two-year was up 1.7 basis points to 2.973 per cent. Yields move inversely to prices.
The dollar index, a gauge of the buck against a weighted basket of peers, rose 0.7 per cent to 96.74.