US stocks fall as energy prices raise margin and interest-rate risks

  • US equities declined as higher energy prices pressured margins and raised interest-rate concerns.
  • S&P 500 and Nasdaq 100 each fell 0.4%, while the Dow dropped nearly 1%.
  • Microsoft, Alphabet and Amazon fell 1%; Oracle gained 5% before earnings this week.

US equities declined on Tuesday as higher energy prices weakened the outlook for corporate margins and increased concerns about further interest-rate pressure. The S&P 500 and Nasdaq 100 each fell 0.4%, while the Dow dropped nearly 1%. New strikes between the US and Iran extended expectations that fuel exports from the Persian Gulf would remain suspended, while Houthi attacks damaged Saudi energy infrastructure and reduced its capacity. US corporate borrowing costs also rose amid hawkish signals from the Bank of Japan and expectations that Japan could sell US Treasury securities to support the yen. Credit-sensitive hyperscalers (large-scale cloud computing companies) declined, with Microsoft and Alphabet each losing 1% and Amazon falling 1% ahead of its sterling bond offer. AI companies have increasingly borrowed in foreign currencies as dollar bond markets face a growing supply of AI-related debt. Oracle gained 5% ahead of its earnings report this week.

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