Nasdaq 100 falls over 2%; Treasury Gains: Market Wrap

The tech-heavy Nasdaq 100 dropped more than 2%, while the S&P 500 also fell. Sentiment was subdued after earnings from megacap companies, including Microsoft Corp and Google parent Alphabet Inc., highlighted how the Fed’s tightening, and consequently a rising dollar, is affecting the economy. Meta Platforms Inc., Amazon.com Inc. and Apple Inc. Those are among the major companies still reporting this week.

Treasury yields declined, with the 10-year rate falling to about 4.05%. A gauge of the dollar fell for the second day to its lowest level in three weeks.

Shares have risen mostly on solid earnings in recent days and speculation that the Federal Reserve may curb the pace of rate hikes. Nearly a quarter of S&P 500 companies have reported third-quarter results, with more than two-thirds beating analysts’ estimates despite big-tech shocks. But investors are still concerned that the reduction in production will affect corporate profits in the coming months.

“Yes, we are seeing earnings at the moment,” Mike Ingram, a senior market strategist at ActiveTrades, said on Bloomberg TV. Next year is still looking a little punchy.”

Goldman Sachs Group Inc. US equities are yet to see trough conditions, said U.S. strategists, as the asset class does not fully reflect the latest growth in real yields and the possibility of a slowdown. In the event of a severe economic downturn, the Goldman team said it expects the S&P 500 index to drop to 2,888, meaning a 25% drop from Tuesday’s close.

Meanwhile, the British pound held an advance after the government said a much-awaited financial statement would be delayed until November. Sterling had earlier rallied after new Prime Minister Rishi Sunak named a veteran cabinet to lead the UK in what he called a “profound economic crisis”.

Oil fell as an industry report saw US crude stockpiles rise and investors worried about weak demand amid slowing growth. Gold rose on support for the precious metal from lower Treasury yields. Bitcoin climbed for the second day.

Major events of this week

• Earnings this week include: Apple, Exxon Mobil, Ford Motor, Credit Suisse, Airbus, Amazon, Bank of China, Boeing, Caterpillar, Cnooc, Intel, McDonald’s, Merck, Samsung Electronics, Shell, Vale, Volkswagen
• ECB rate decision, Thursday
• US GDP, durable goods orders, early jobless claims, Thursday
• Bank of Japan Policy Decision, Friday
• US personal income, personal spending, pending home sales, University of Michigan consumer sentiment, Friday

Some key moves in the markets

shares

• The S&P 500 fell 0.9% as of 9:30 a.m. New York time
• Nasdaq 100 fell 2.2%
• The Dow Jones Industrial Average fell 0.1%
• Stoxx Europe 600 fell 0.4%
• MSCI World Index up 1.6%

currencies

• Bloomberg Dollar Spot Index down 0.5%
• The euro rose 0.4% to $1.0010 . done
• The British Pound rose 0.7% to $1.1556
• The Japanese yen rose 0.5% to 147.15 per dollar

cryptocurrency

• Bitcoin up 1.3% to $20,461.5. done
• Ether up 3.2% to $1,521.19

bond

• Yield on 10-year Treasury fell six basis points to 4.04%
• Germany’s 10-year yield was little changed at 2.16%
• Britain’s 10-year yield fell by two basis points to 3.61%

Goods

• West Texas Intermediate crude rose 0.8% to $86.01 a barrel
• Gold futures rose 0.5% to $1,667.10 an ounce

This story has been published without modification in text from a wire agency feed.