The Nasdaq and S&P 500 pulled back from record highs on Wednesday as Treasury yields and oil prices rebounded, with investors awaiting the Federal Reserve's September meeting minutes. The Dow Jones Industrial Average fell 472.21 points, chip stocks were among the top decliners, and investors expect a largely positive third-quarter earnings season to underpin record-high stock markets.
Yields and oil pressure stocks
The Nasdaq and S&P 500 eased from record highs on Wednesday as Treasury yields and oil prices rebounded, keeping investors cautious ahead of the Federal Reserve's September meeting minutes. Brent crude moved back above $100 a barrel as Middle East supply concerns persisted.
According to Peter Cardillo, chief market economist at Spartan Capital Securities: "We're seeing a little bit of profit-taking today."
At 9:43 a.m. ET, the Dow Jones Industrial Average fell 472.21 points, or 0.92%, to 51,049.07, the S&P 500 lost 44.80 points, or 0.56%, to 7,775.04, and the Nasdaq Composite lost 235.16 points, or 0.85%, to 27,364.73.
The 30-year Treasury bond yield rose to its highest since 2002, last at 5.72%, ahead of the Fed minutes from the meeting where policymakers raised interest rates to combat inflation. Traders widely expect the Fed to hold rates steady in October, but a December hike remains on the cards, according to the CME FedWatch Tool.
Chip stocks and SpaceX among decliners
Micron Technology dropped 2.3%. Nvidia eased 0.7%. The Philadelphia chip index fell 2.3% as chip stocks were among the session's top decliners. Elon Musk's SpaceX lost 1.7% after a Financial Times report that the firm was seeking $40 billion in financing to fund purchases of Nvidia chips.
Eight of the 11 S&P 500 sectors traded lower, with materials and industrials leading losses. Energy and healthcare were higher, up 0.6% each. The S&P 500's equal-weighted counterpart stands more than 5% away from record highs. The Russell 2000 small-cap index is down more than 8% from its all-time high.
Markets brace for earnings season
Focus will likely shift to corporate earnings as the third-quarter earnings season kicks off next week, with several high-profile financial firms expected to report Tuesday. Analysts currently expect S&P 500 earnings growth of 30.6% for the July-to-September period, led by a projected 114.7% jump in energy earnings and a 66.5% surge in tech results, according to LSEG. That pace trails the second quarter, when S&P 500 companies posted a 54% jump in earnings.
Declining issues outnumbered advancers by a 3.74-to-1 ratio on the NYSE and 3.19-to-1 on the Nasdaq. The S&P 500 posted eight new 52-week highs and five new lows, while the Nasdaq Composite recorded eight new highs and 129 new lows.
Source: Investing.com
Trading involves risk.
Risk Disclaimer
