Wall Street extends losses, dragged down by energy and tech

WTI settles in the red for the fourth straight day.
Tax plan uncertainty continues to weigh on the sentiment.
Tech shares underperform in the risk-off environment.

Eren Sengezer FXStreet

Major equity indexes in the U.S. started the fifth straight session lower on Wednesday and struggled to make a meaningful recovery as investors stayed away from risk-sensitive assets amid the unclarity about the details of the tax bill.

The weekly oil report released by the EIA on Wednesday showed that commercial crude oil inventories in the U.S. increased by 1.9 million barrels for the week ending November 10. The barrel of WTI, which was already under pressure since the start of the week on rising production in the U.S. and forecasts of softer global demand, closed the fourth day in a row lower. Following a 1.5% drop on Tuesday, the S&P 500 Energy Sector (SPNY) lost another 1.2% today.

Meanwhile, the S&P 500 Information Technology Sector (SPLRCT), which generally reacts sharply to changing risk-appetite, closed the day 0.85% lower. Commenting on the weak performance of the sector, "after a very strong run this year, perhaps some people are taking profits," Peter Jankovskis, co-chief investment officer at OakBrook Investments LLC in Lisle, Illinois, told Reuters.

Today's data from the U.S. showed that the annual CPI eased to 2% in October from 2.2% while retail sales rose by 0.2% on a monthly basis. Neither of these data changed the expectations regarding a December rate hike. In fact, the CME Group FedWatch Tool's probability remained above the 90% mark following the data.

The Dow Jones Industrial Average lost 135.07 points, or 0.58%, to 23,274.40, the S&P 500 dropped 13.91 points, or 0.54%, to 2,564.96 and the Nasdaq Composite fell 30.85 points, or 0.46%, to 6,707.03.

Headlines from the NA session

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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