Technology, health care companies lead USA stocks higher

Congress storm clouds

The euro eased 0.04 percent against the dollar to $1.1086. Cimarex Energy jumped 9.7%. -China trade dispute are fading and falling bond yields are reflecting fears of a potential economic downturn.

Benchmark 10-year notes last rose 21/32 in price to yield 1.4744 percent, from 1.544 percent late on Monday. But they soon turned lower as the inversion between long-term and short-term bond yields became more worrisome.

The expanding inverted yield curve has been largely viewed as a key precursor of an imminent recession, further stoking risk-off sentiment among global investors.

Dwyer also pointed to the importance of the recession signal the inverted yield curve has traditionally sent.

The spread on three-year T-bill rates over 10-year yields grew as wide as 52 basis points, a level not seen since March 2007, according to Refinitiv data.

The S&P 500 was up 0.5% as of 12:40 p.m.

For context, Yahoo Finance analysis shows American Express (AXP), Visa (V), Microsoft (MSFT), Nike (NKE) and Disney (DIS) are the only components of the Dow Jones Industrial Average (^DJI) that yielded a smaller percentage than the 10-year Treasury.

Spot silver added 0.6 percent to $18.27 an ounce after having hit $18.50, its highest level since April 2017. The design software company's stock fell 10.4% Wednesday after its outlook for third-quarter profits and sales fell short of analyst expectations (link).

Early on Tuesday the indexes appeared poised to extend the gains from Monday's rally.

Asian indexes were broadly lower, with China's Shanghai Composite down 0.3% and Hong Kong's Hang Seng down 0.2%.

Data showing a fall in US crude stockpiles lifted oil prices.

"What's still rattling investors is the reality that the trade war is dragging on and, despite discussions about an upcoming meeting, the market is losing confidence that perhaps that might take place", Heckman said. "That happened after the financial crisis, when the companies of the S&P 500 cut dividends by an aggregate of 25%".

"The price action reflects a variety of market participants' fears that their business model will be highly strained if rates fall to very low levels for an extended period", Michael Cloherty, head of US interest rate strategy at RBC Capital Markets, said of Wednesday's trading. On Tuesday, that pulled the yield of the 10-year Treasury below that of the two-year Treasury. Microsoft rose 1.9% and Apple added 1.6%. The two-year was at 1.50%, down from 1.52% a day earlier. While a USA recession has never begun without an inverted yield curve, the pattern has occurred in the past without leading to a downturn.

"You have a symptom in the inversion, but really the cause of that symptom is the tariffs and the trade war causing a global slowdown", said Dan Heckman, national investment consultant at U.S. Bank Wealth Management. That's helping to fuel the surge in demand for bonds and the ensuing drop in yields.

Still, much of the market's action has been a reaction in recent weeks to headlines on trade.

Stocks opened higher on Wall Street after US President Donald Trump said China had offered to resume trade talks, though uncertainty prevailed as Beijing declined to confirm Trump's assertion. China's foreign ministry, however, reiterated yesterday that it had not received any recent USA telephone calls on trade.

US and Chinese trade negotiators are due to meet next month in Washington, but neither side has given any indication of offering concessions to break a deadlock.

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