US stock indexes are sagging as rising Treasury yields impact rate-sensitive sectors, while investors evaluate earnings to assess the health of American companies.
Verizon was the biggest decliner on the blue-chip Dow after the telecom giant missed estimates for third-quarter revenue with a 4.9 per cent loss.
Adding to losses, Dow heavyweight 3M slipped 0.6 per cent, reversing its premarket gains, despite raising the lower end of its full-year adjusted profit forecast.
The Dow Jones Industrial Average fell 153.09 points, or 0.36 per cent, to 42,778.51, the S&P 500 lost 22.04 points, or 0.38 per cent, to 5,831.94, and the Nasdaq Composite lost 52.19 points, or 0.28 per cent, to 18,487.82.
Pressuring equities, US Treasury yields rose as investors assessed the impact of the upcoming presidential election on fiscal policy. They also waited to gauge the effect of a robust economy on the Federal Reserve’s policy trajectory.
The yield on the benchmark 10-year note rose as high as 4.222 per cent, continuing a steady climb since early October, after a bumper jobs report led investors to dial back expectations for the central bank to ease interest rates through the year.
Rate-sensitive megacap stocks slipped, with Apple falling 1.2 per cent and Nvidia down 0.5 per cent, weighing on the broader tech sector, which lost 0.3 per cent.
Consumer Discretionary shares were bogged down by a one per cent and 0.6% decline in Tesla and Amazon.com, respectively.
Stocks retreated from record highs on Monday as investors took a breather following six consecutive weeks of advances for major indexes, even as gains in Nvidia helped the Nasdaq edge higher.
“We set all these new highs with a sense of nervousness. That’s for three primary reasons: a lot of conflicts around the world at the moment, the Fed and what they’re going to do next and the election… (have) people a bit more unsure of what’s next,” said JJ Kinahan, CEO, IG Group North America.
The next few weeks are likely to be volatile for equity markets, as investors scrutinise company earnings, fresh economic data and the results of the US election, followed by a central bank meeting.
Traders are pricing in an 89.6 per cent chance of a 25-basis-point interest-rate cut in November, according to CME’s FedWatch.
GE Aerospace fell 6.3 per cent despite raising its profit forecast for 2024, as persistent supply constraints impacted its revenue, highlighting the difficulty some companies may face in trying to impress investors this year.
It pulled the broader Industrials index one per cent lower.
General Motors gained 7.3 per cent after the legacy carmaker’s third-quarter results beat Wall Street estimates, while Lockheed Martin dipped four per cent after results.
Baker Hughes and Texas Instruments are scheduled to report earnings after the bell.
Estimated third-quarter year-over-year earnings growth for the S&P 500 is 6.5 per cent, excluding the Energy sector, and four per cent overall, according to LSEG data.
The economically sensitive small-cap Russell 2000 lost 0.4 per cent.
Declining issues outnumbered advancers by a 1.81-to-1 ratio on the NYSE, and by a 1.6-to-1 ratio on the Nasdaq.
The S&P 500 posted five new 52-week highs and two new lows, while the Nasdaq Composite recorded 25 new highs and 25 new lows.
https://thewest.com.au/business/markets/wall-street-tumbles-as-yields-jump-verizon-slides-c-16485588
