Equities tumble as Treasury yields climb again

Equities fell broadly yesterday as Treasury yields rose to their highest level in 16 years, leaving the S&P 500 Index and the Nasdaq Composite near two-week lows.  Earlier Wednesday, the yield on the 10-year Treasury note rose above 4.91%, the benchmark’s highest point since summer 2007.  The Dow Jones closed more than 330 points lower and the S&P 500 lost 1.3%.  The Nasdaq shed 1.6% led by significant losses from Nvidia, Tesla, and Amazon.com. Meantime, European shares also closed sharply lower yesterday with both the Dax 40 and the Euro Stoxx 50 losing more than 1%. 

Summary for 19.10.2023 

• Asian equity markets fell on Thursday, tracking a sharp selloff on Wall Street as Treasury yields surged to multi-year high and as an escalating turmoil in the Middle East dampened risk sentiment.  Investors also assessed key trade data in Japan and labour market figures in Australia.  Shares in Australia, Japan, South Korea, Hong Kong and China all declined. 
• European and US equity futures inched higher this morning as investors look ahead to Federal Chair Jerome Powell’s speech later in the day to guide the outlook on interest rates. 
• Oil prices fell this morning, giving back some gains from the previous session.  Oil prices rallied to two-week highs on Wednesday as an escalating turmoil in the Middle East stoked fears about disruptions to global supplies, and as the US reported a larger-than-expected inventory draw.  However, the market retreated slightly today as OPEC showed no signs of supporting Iran’s call of an oil embargo on Israel. 
• Netflix increased subscription prices in the US, Britain, and France, leading to a 13% jump in its shares in after-hours trading yesterday, as it added nearly 9 million subscribers globally, surpassing Wall Street’s expectations.  The price hikes, combined with strong international growth and a crackdown on password-sharing, contributed to the company’s robust financial performance in Q3. 
• In extended trading on Wednesday, Tesla plunged more than 4% on an earnings and revenue miss, as well as a pessimistic economic outlook from CEO Elon Musk. 
• ASML Holding fell 4.2% yesterday after the semiconductor-equipment maker’s quarterly net sales fell short of expectations. 
• Nvidia Corp fell 4% after Citi and Morgan Stanley both lowered price targets for the chipmaker.  Federal officials earlier this week announced new restrictions on the sale of advanced artificial intelligence chips to China. 
• Shares of United Airlines dropped nearly 10% after releasing a weaker-than-expected profit forecast for the current quarter, a reflection of higher jet fuel costs and a recent halt to Israel-bound flights. 
• Procter & Gamble shares rose 2.6% on Wednesday after the consumer products maker reported better-than-expected quarterly earnings and revenue. 
• US Bancorp was dragged down by weakness in other regional banks, ending 4.5% lower, despite reporting slightly stronger-than-expected quarterly results.