US open: Stocks head south amid concerns about rising rates and the debt ceiling

Wall Street stocks were in the red at the open on Wednesday amid ongoing fears regarding rising rates, higher inflation, global reopening, and the debt limit.

As of 1535 BST, the Dow Jones Industrial Average was down 0.66% at 34,087.41, while the S&P 500 was 0.49% weaker at 4,324.35 and the Nasdaq Composite came out the gate 0.23% softer at 14,407.34.

The Dow opened 227.26 points lower on Wednesday, taking a huge bite out of gains recorded in the previous session.

At the open on Wednesday, reopening plays like American Airlines and JetBlue both traded lower due to downgrades from analysts at Goldman Sachs, citing higher fuel prices and slower near-term demand.

Boeing, General Electric and Carnival were also in the red due to fears regarding the global economic recovery, while shares in tech giants such as Apple, Facebook, Electronic Arts and Seagate took a hit amid heightened rates as the yield on the benchmark 10-year Treasury note remained elevated at above 1.51%, after topping 1.56% last week.

Oil prices, which hit their highest level since 2014 on Tuesday, slipped early on Wednesday, with West Texas Intermediate crude oil falling 1.76% to $77.54.0 a barrel.

Comments from Janet Yellen on Tuesday were also weighing on sentiment, with the Treasury Secretary warning that the US would fall into a recession if Congress did not raise the debt ceiling before the 18 October deadline.

On the macro front, mortgage applications fell 6.9% in the week ended 1 October as higher rates weighed on the market in the, according to the Mortgage Bankers Association, with activity in both purchases and refinancing sliding.

Elsewhere, ADP employment change figures revealed that private jobs rose by 568,000 in September, better than estimates for a print of 425,000 as the leisure and hospitality sector led job creation with 226,000 hires.

In terms of earnings, Levi Strauss & Co will report its third-quarter results later in the day.