Stock Market News Oct: Treasury Yields Ease After Auction
U.S. stocks ended lower after Treasury yields climbed to multi-year highs, reviving concerns over inflation, government debt and interest rates. Yields later…
U.S. stocks fell on Wednesday as long-term Treasury yields climbed to multi-year highs, reviving concerns about inflation, government debt and interest rates. Yields later pulled back after investors responded well to a $39 billion auction of 10-year notes, easing some pressure on equities.
The S&P 500 and Dow Jones Industrial Average snapped four-session winning streaks, while the Nasdaq Composite recorded its first decline in six sessions. The moves came as investors weighed Federal Reserve minutes, oil prices and corporate earnings prospects.
The S&P 500 fell 0.2%, the Dow lost 0.7% and the Nasdaq slipped 0.2%. U.S. stock futures were little changed on Wednesday evening after Wall Street retreated from record highs.
Long-term yields had resumed climbing before the auction. The 10-year Treasury yield reached 5.36%, its highest level since 2002, while the 30-year yield briefly touched 5.70%, a 24-year high. Both later eased.
The pullback offered some relief to stock investors, but the session left the market facing competing pressures: elevated borrowing costs and oil prices on one side, and corporate earnings and demand for artificial-intelligence infrastructure on the other.
Fed minutes shift rate expectations
Minutes from the Federal Reserve’s September meeting showed policymakers broadly viewed the latest rate increase as a measure to contain persistent inflation, rather than the beginning of an aggressive cycle of hikes.
Markets reduced expectations for an October rate increase after the minutes were released. Traders were pricing in about an 18% probability of a hike at the Fed’s October meeting, according to CME FedWatch.
That reading did not remove concern about rates. Rising Treasury yields can add pressure to equities, while investors continue to assess whether inflation will remain persistent. The retreat in yields after the auction eased immediate pressure, but the earlier climb had already helped drive the day’s losses.
Oil and chip demand in focus
Oil added to inflation concerns. Brent crude remained above $100 a barrel as investors assessed supply disruptions linked to the Iran conflict and attacks by Yemen’s Iran-backed Houthis on Saudi Arabia.
Investors also tracked the global artificial-intelligence investment cycle. Samsung Electronics said on Thursday that its third-quarter operating profit was expected to jump nearly eightfold to a record 107.4 trillion won ($80.1 billion), supported by strong AI-driven demand for memory chips.
The forecast fell short of a Bloomberg estimate of 108.67 trillion won. Samsung shares nevertheless fell in Seoul as investors focused on lofty expectations. The company’s outlook provided fresh evidence of strong demand for advanced memory used in AI infrastructure, benefiting chipmakers including Micron and SK Hynix.
U.S. chip stocks weakened during Wednesday’s session, with the semiconductor index falling 1.2%. SpaceX also declined after reports it was seeking $40 billion in financing to fund purchases of Nvidia chips.
Third-quarter earnings season is the next focus for investors. Strong corporate results could support stocks, while elevated Treasury yields and oil prices remain risks to the market’s record-setting rally.
Source: sg.finance.yahoo.com
