Rising Yields and Middle East Tensions Weigh on Global Markets, Stocks Slide
US stock markets still on a decline on Tuesday as rising Treasury yields and mounting Middle East tensions impacted investor optimism.
US stock markets still on a decline on Tuesday as rising Treasury yields and mounting Middle East tensions impacted investor optimism.
Furthermore, the quick strengthening of Hurricane Milton raised new concerns for industries vulnerable to natural disasters. These factors contributed to a risk-off sentiment among traders, resulting in broad drops across key indexes.
At the time of writing, the Dow Jones Industrial Average is trading 41954.2, down 398.51 or -0.94%. The S&P 500 Index is at 5695.9, down 55.13 or -0.96% and the Nasdaq 100 Index is trading 19800.74, down 234.28 or -1.17%.
US stock indexes closed lower while Treasury yields rose, as traders reduced bets on Federal Reserve interest-rate easing and worried about the impact of the Middle East conflict on oil prices https://t.co/wOFe0Ylhvh pic.twitter.com/kYrGdcW7ES
— Reuters Business (@ReutersBiz) October 8, 2024
Several well-known constituents’ equities of S&P 500 were traded in the red on tuesday. Apple shares fell 2.25% after Jefferies downgraded the tech titan to hold from buy, citing lower-than-expected demand for its next iPhone models.
U.S. Treasury Yields Jump, Growth Stocks Under Pressure
For the first time in two months, the yield on the 10-year U.S. Treasury jumped above 4% as investors revised their expectations regarding the Federal Reserve’s interest rate strategy. Also, the two-year yield is s3.9%, suggesting mounting skepticism about the Fed’s upcoming actions.
Risen yields put pressure on megacap growth stocks that are sensitive to rates.
Tesla shares are on a decline today, being traded at 240.83 USD witha decrease of 3.70%.
Meta shares were also down today being traded at 584.78 USD with a decrease of 1.87% from yesterday. However, amid ongoing investors optimism around AI, unlike its others tech peers, Nividia is traded in green with an increase of 2.24% from yesterday. Amazon (AMZN) slumped 3.06 % after Wells Fargo downgraded its rating on the company amid worries over growth.
Other notable moves included the following: shares of power generator manufacturer Generac (GNRC) gained 8.52%, reaching a two-year high, as Hurricane Milton heightened on its way to the Florida Gulf Coast; shares of Pfizer (PFE) rose 2.17% after a report that activist investor Starboard Value has acquired a roughly $1 billion stake in the struggling drugmaker; and Super Micro Computer (SMCI) shares rose 15.79% today, leading S&P 500 gainers.
Global Market Turmoil: FTSE 100 Slips Amid Rising Yields
London stock prices declined after information revealed that the cost of borrowing in the UK has increased recently due to speculators selling gilts ahead of the budget.
UK yields are rising as part of a broader trend – hard to say this is just budget related #ukeconomy #ukmacro #budget25 #economy #macro
UK borrowing costs climb as chancellor Rachel Reeves walks ‘tightrope’ over spending plans https://t.co/qDTZn77FKI via @ft pic.twitter.com/u7Z2p1KycB
— Kallum Pickering (@KallumPickering) October 8, 2024
Tuesday’s losses in the US and Asia were followed by a decline in the FTSE 100 and European stocks, with the FTSE being pulled down 1.19% by a profit warning at housebuilder Vistry (VTY.L). After a week-long hiatus, mainland Chinese stocks returned, but were held back after the central bank failed to deliver a widely anticipated stimulus package.
Early trading saw the FTSE 100 (FTSE) down 1.1%, the German DAX down 0.28%, and the Paris CAC 40 (FCHI) down-0.83%. Also declining by 0.64% was the pan-European STOXX 600 (^STOXX).
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