New York (CNN Business)March is looking a lot like January and February on Wall Street. That’s not good news for investors.
The Dow fell nearly 600 points Tuesday, or 1.8%, one day after stocks capped off their second straight month of declines to start the year. The Dow managed to finish off its lows of the day though.
The Nasdaq and S&P 500 were also hit hard, with each index falling about 1.6%.
Rising oil prices, which spiked nearly 10% Tuesday to above $104 a barrel for the first time in more than seven years, are hurting sentiment. So is the rapid drop in long-term bond yields. The 10-year Treasury rate fell to about 1.7%, the lowest level since early January.
Lower bond rates are bad news for financial firms, which tend to make more money from lending operations and other businesses when rates are higher. American Express (AXP), JPMorgan Chase (JPM), Visa (V) and Goldman Sachs (GS) were among the bigger losers in the Dow Tuesday.
Investors are now betting that rates will remain pretty low for awhile as well. According to futures contracts on the CME, traders are even pricing in a 2% chance that the Federal Reserve will keep rates at zero at its next meeting on March 16.
The Fed is still widely expected to raise rates, but now by just a quarter-point. A week ago, the market was split between whether the Fed would hike rates by a quarter-point or a half-point.
Fed chair Jerome Powell may talk more about where rates are headed during his semiannual congressional testimony this week. He speaks in front of the House Committee on Financial Services Wednesday and the Senate Banking Committee Thursday.
Chevron (CVX) was the Dow’s biggest gainer Tuesday, rising nearly 4%. The energy giant is benefiting from higher oil prices and the company also raised its target for stock buybacks this year.
Retail stocks were also among the market’s winners Tuesday. Target and Kohl’s both reported stronger than expected earnings and solid outlooks for 2022. Target (TGT) shares surged 10% on the news.
Kohl’s (KSS) stock was up 2% and Dow components Walmart (WMT) and Home Depot (HD) rallied as well.
CNN’s Matt Egan contributed to this story.
