U.S. stocks fell for the third consecutive day. Wells Fargo, following JPMorgan, lowered its forecasts

Major U.S. stock indices closed lower on the first day of September. The broad-market S&P 500 index lost 0.7%, the tech-heavy Nasdaq Composite index fell 1%, and the blue-chip Dow Jones index dropped 0.8%.

U.S. stocks fell for the third consecutive day after renewed hostilities between the U.S. and Iran drove up oil prices, while global bond yields hit their highest levels since 2008, according to MarketWatch. In addition, the stock market was hit by another decline in chipmaker stocks, Bloomberg reports.

Yields on 30-year U.S. Treasury bonds have returned to the level they were at before the Treasury Department’s decision to increase the volume of buybacks, a move aimed at curbing the rise in yields, Bloomberg noted. For 30-year Treasuries, the yield reached 5.27% on Tuesday, while the yield on 10-year Treasuries—which are a key benchmark for all types of loans—stood at 4.8%, more than 10 basis points higher than the level prior to the Treasury’s intervention.

“Higher oil prices threaten to cause inflation to rise again, which increases the risk of tighter monetary policy. In addition, investors are concerned about the continued rise in global bond yields, which, to some extent, goes hand in hand with oil prices,” said Fawad Razaqzada, a market analyst at Forex.com, in a Bloomberg report.

On Tuesday, Wells Fargo joined the growing wave of cautious sentiment toward U.S. stocks this week, according to Bloomberg. Wells Fargo warned of “widespread caution” in the market in September, as investors are increasingly concerned about the sustainability of the AI boom: the bank’s team of analysts expects concerns about the capital costs of developing artificial intelligence to peak. However, Wells Fargo’s sentiment indicator remains more positive than negative following the sell-off in mid-August, Bloomberg added.

A day earlier, JPMorgan’s trading division abandoned its optimistic, “bullish” outlook on U.S. stocks and adopted a “tactically cautious” stance ahead of the Fed’s September 16 meeting. However, JPMorgan also acknowledged that the fundamentals for the stock market remain strong.

"The catalysts for growth are becoming less obvious at a time when the catalysts for a decline are becoming more numerous," wrote Scott Rubner, head of equity and derivatives strategy at Citadel Securities, on August 31.

This article was AI-translated and verified by a human editor