US stock bounce slows as oil price decline hits energy businesses

• S&P 500 index surrendered early gains to turn negative in the final 30 minutes of the New York trade.
• Oil companies, notably Marathon Oil and ConocoPhillips, fell as Brent crude decreased by 2.5%.
• US consumer price inflation reached a 40-year high in May.

A fledgling rise in US stocks waned on Wednesday evening, as a decline in oil price weighed on energy sectors and drove down market indices.

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The S&P 500 index surrendered early gains to turn negative in the final 30 minutes of the New York trade, closing the day 0.1% worse. Oil companies, notably Marathon Oil and ConocoPhillips, fell substantially as Brent crude settled at $111.74 per barrel, a decrease of 2.5%.

The technology-heavy Nasdaq Composite share index also declined 0.1% and is now down over 30% for the year.

The dips put an end to a two-day surge for the S&P 500, which has entered a bear market this year due to fears that the Federal Reserve’s efforts to raise interest rates could create an economic slowdown.

Fed Chair Jay Powell told the Senate Banking Committee on Wednesday that “the American economy is very strong and well-positioned to handle tighter monetary policy.” However, he also warned of other inflationary surprises. He stated that a recession was “certainly a possibility.”

After US consumer price inflation reached a 40-year high in May, the Fed raised its benchmark interest rate by 0.75 percentage points, the largest since 1994. oil price

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Investors are concerned that the combination of rising inflation and increased borrowing costs will endanger company profitability and economic growth. Money markets predict that the Fed will raise its main funds’ rate to approximately 3.5% this year.