Stock Market Today: Dow turns negative for 2023 as surging yields sink stocks

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Investing.com -- The Dow fell Tuesday, and turned negative for the year as data showing surprise strength in the labor market, stoked further concerns about higher Federal Reserve interest rates, pushing Treasury yields to multi-year highs.

The Dow Jones Industrial Average fell 1.3%, 430 points, Nasdaq fell 1.9%, and the S&P 500 fell 1.3%.

Demand for labor unexpectedly rose in August

The U.S. Labor Department's latest Job Openings and Labor Turnover Survey (JOLTs) report, a measure of labor demand, showed job openings in August unexpectedly increased by about 9.6 million, confounding expectations for drop to 8.8M.

The signs of a still tight labor market added to fears that the Fed may need to hike again this year, pushing the 10-year Treasury yield and 30-year Treasury yields to their highest levels since 2007 in anticipation of a higher for longer rates. U.S. government bond prices, which trade inversely to yield, have also been pressured by a surge in the supply of Treasuries as the U.S. government stepped up the pace of borrowing amid growing deficit. 

The fresh surge in the Treasury yields comes even as Atlantic Fed President Raphael Bostic said there wasn’t “urgency” for the Fed to raise rates again.

Technology rebound proves fleeting as selling resumes

Tech, which staged a rebound a day earlier, was led lower by Microsoft Corporation (NASDAQ:MSFT) and Meta Platforms Inc (NASDAQ:META), with the latter coming under added pressure after media reports that it is mulling whether to charge a $14 monthly fee to users who want to access an ad-free version of Facebook or Instragram.

The moves comes as a European court ruling in July -- stating that under the EU’s data protection rules, Meta must seek user consent first before showing personalized ads – threatens the tech giant’s advertising revenue, a major source of revenue.

The broader malaise in tech, meanwhile, continued to be dominated by an ongoing rise in Treasury yields, which makes growth sectors of the market less attractive.

McCormic lifts guidance, but Q3 revenue falls short

McCormick & Company Incorporated (NYSE:MKC) fell more than 8% despite lifting its full-year earnings guidance, though the spice maker did report Q3 revenue that fell just short of analysts estimates.

The company said it expects special charges -- relating to to organizational and streamlining actions -- to reduce EPS by $0.16 in 2023. But excluding special charges, adjusted EPS was expected to be in the range of $2.62 to $2.67, up from prior to guidance of $2.60 to $2.65.

Energy stocks slip as oil prices rebound ahead of OPEC+ meeting

Energy stocks were less than 1% lower as a rise in oil prices following weakness a day earlier helped keep losses in check ahead of the meeting between Organization of the Petroleum Exporting Countries, or OPEC, and allies led by Russia, known as OPEC+, due Wednesday.

Valero Energy Corporation (NYSE:VLO), Phillips 66 (NYSE:PSX), and Marathon Petroleum Corp (NYSE:MPC) were among the biggest decliners.

“When OPEC’s JMMC meets this Wednesday, we do not anticipate any major shift in production policy despite a price increase of nearly 9% since the August monitoring meeting,” RBC said in a note.