Stock market today: Wall Street falls from its records as oil prices jump

NEW YORK — (AP) — U.S. stocks are falling from their records Tuesday ahead of a couple reports later in the morning that could show how well the economy is holding up.

The S&P 500 was down 0.9% in morning trading a day after setting an all-time high for the 43rd time this year. The Dow Jones Industrial Average was down 259 points, or 0.6%, after coming off its own record. The Nasdaq composite was 1.3% lower, as of 9:55 a.m. Eastern time.

Oil prices jumped as worries ratcheted higher about the potential for increased violence in the Middle East and for disruptions to the flow of crude from the region. A barrel of benchmark U.S. crude rose 2.7% to top $70.

The worries helped drive prices lower for stocks and higher for Treasury bonds and other investments that are seen as safer. That in turn drove down Treasury yields, which had already been easing following an encouraging update on inflation from Europe. The slowdown in inflation could give the European Central Bank leeway to cut interest rates more quickly.

In the United States, stocks have jumped to records on hopes the U.S. economy can continue to grow despite its recent slowdown, as the Federal Reserve cuts interest rates to give it more juice. The Fed last month lowered its main interest rate for the first time in more than four years, and it's indicated more cuts through next year.

It's a sharp turnaround for the Fed, which had earlier kept the federal funds rate at a two-decade high in hopes of slowing the economy enough to stamp out high inflation. Such high rates helped to bring inflation down sharply from its peak more than two years ago, but they have also pushed U.S. employers to pare back on their hiring.

Later on Tuesday, the U.S. government will offer an update on how many job openings U.S. employers were advertising at the end of August. Economists are expecting a similar number to July’s 7.7 million.

Another update will show how well, or poorly, the U.S. manufacturing industry is doing. It’s been one of the hardest-hit areas of the economy and has been shrinking under the weight of high rates. Economists expect Tuesday’s report to show another month of contraction in September, though not quite as steep as August’s.

Another threat to the economy could lie in the strike by dockworkers at 36 ports across the eastern United States, which could threaten to snarl supply chains and drive up inflation.

The workers are asking for a labor contract that doesn’t allow automation to take their jobs, among other things. So far, financial markets have been taking the strike in stride. Supply chain experts say consumers won’t see an immediate impact from the strike because most retailers stocked up on goods, moving ahead shipments of holiday gift items.

In the bond market, the yield on the 10-year Treasury eased to 3.71% from 3.79% late Monday. Yields fell even more for bonds in Europe following the inflation data there.

In stock markets abroad, European indexes swung from modest gains to losses following the report showing inflation among the 20 countries that use the euro currency came in below 2% in September for the first time in more than three years. Indexes slipped 0.5% in France and 0.1% in Germany.

Farther east, a quarterly "tankan" survey by the Bank of Japan showed more large manufacturers are still feeling optimistic about business conditions than pessimistic. Japan also reported that its unemployment rate for August fell to 2.5% from 2.7% in July, in line with market expectations.

Japan’s benchmark Nikkei 225 rallied 1.9% to claw back some of its steep 4.8% loss from the day before.

Markets in China and South Korea were shut for holidays. Mainland Chinese markets, which had their best day since 2008 on Monday, will remain closed until Oct. 7 for the National Day break.

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AP Writers Matt Ott and Zimo Zhong contributed.

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