Dow Heads Higher While Crude Oil Slumps in Midday Trading

US equity indexes rose with government bond yields, while crude oil slumped after midday on Monday.

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The Nasdaq Composite climbed 0.8% to 13,360.2, with the S&P 500 up 0.3% to 4,313.6 and the Dow Jones Industrial Average 0.1% higher at 33,924.1. Technology and consumer discretionary led the gainers, while financials and real estate were among the steepest decliners intraday.

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The Consumer Price Index is expected to increase 0.2% in May from 0.4% in April, a survey compiled by Bloomberg showed. The core CPI, excluding the more volatile food and energy prices, will rise by 0.4%, unchanged from the previous month. The forecast for the year-over-year rate is 4.1% in May compared with 4.9% in April and 5.3% versus 5.5% core, respectively.

The US two-year Treasury yield rose one basis point to 4.61%, and the 10-year rate rose 3.1 basis points to 3.78% intraday.

The probability that the Federal Open Market Committee will leave interest rates unchanged in its 5% to 5.25% target range is 75%, according to the CME FedWatch Tool. The remaining is for an increase of 25 basis points. The FOMC will announce its policy decision on Wednesday when its two-day meeting ends.

West Texas Intermediate crude oil sank 3% to $68.08 per barrel.

Goldman Sachs lowered its forecast for year-end oil prices as supply remains abundant despite production cuts from OPEC+ and Saudi Arabia’s independent move to cut its July exports by one million barrels per day. The investment bank reduced its December price forecast for Brent crude to $86 per barrel from $95, while it sees West Texas Intermediate prices closing out the year at $77, down from its prior estimate of $82.

In company news, Nasdaq (NDAQ) will purchase software company Adenza from investment firm Thoma Bravo in a roughly $10.5 billion cash-and-stock deal as part of the exchange operator’s efforts to become a more technology-centric company within the financial industry. Nasdaq’s shares slumped 13% intraday, the worst performer on the S&P 500.

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