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U.S. stocks are muted as the 10-year Treasury yield shoots above 5%

Published 10/22/2023, 07:56 PM
Updated 10/23/2023, 11:00 AM
© Reuters

Investing.com -- U.S. stocks were muted on Monday as Treasury yields shot higher, and as investors awaited big tech earnings reports this week.

At 10:57 ET (14:57 GMT), the Dow Jones Industrial Average was down 38 points or 0.1%, while the S&P 500 was down flat and the NASDAQ Composite was up 0.2%. All three indexes started out the day lower.

10-year U.S. Treasury yields climbs past 5%

The main indexes on Wall Street suffered last week, with rising Treasury yields weighing heavily. The broad-based S&P dropped 2.4%, its first losing week in three, while the tech-heavy Nasdaq fell 3.2% and the blue chip Dow fell 1.6%. 

The benchmark 10-year Treasury yield climbed to 5% on Friday, its highest level since the financial crisis in 2007, before slipping slightly. 

However, yields have shot up once more Monday, with the 10-yield reaching 5.025%, as investors have become very wary about the potential for rates staying high for longer, particularly after Fed Chair Jerome Powell mentioned the possibility of more monetary tightening in a speech last week.

Earnings from tech giants due

Investors are also on edge ahead of this week’s corporate results, with earnings due from a group of tech stocks whose gains have propelled the S&P 500 higher this year.

Microsoft (NASDAQ:MSFT) and Alphabet (NASDAQ:GOOGL) are due to report on Tuesday, Meta (NASDAQ:META) is to report on Wednesday and Amazon (NASDAQ:AMZN) reports on Thursday.

Those stocks, together with Apple (NASDAQ:AAPL), Nvidia (NASDAQ:NVDA) and Tesla (NASDAQ:TSLA) have accounted for the bulk of the S&P 500's 10% year-to-date gain, so any disappointing results could result in widespread fallout.

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Chevron set to buy Hess for $53 billion

Elsewhere, the oil market is once more the center of major M&A, as Chevron (NYSE:CVX) announced plans to buy smaller rival Hess (NYSE:HES) in a $53-billion all-stock deal, implying a premium of about 4.9% to the share's last close. Chevron shares fell 2.4%, while Hess shares fell 0.4%.

The deal comes weeks after rival Exxon (NYSE:XOM) made a $60 billion offer for Pioneer Natural Resources (NYSE:PXD) that would make it the biggest producer in the largest U.S. oilfield.

Apple traded lower 1.5% after Foxconn (TW:2354), a major supplier of Apple's iPhones, faces a tax probe in China, according to a report in Sunday’s state-backed Global Times newspaper.

Oil falls on escalated Gaza diplomacy

Crude prices fell Monday as diplomatic efforts to contain the situation in Gaza escalated, but geopolitical tensions remained high as Israel continued to bombard the enclave.

Israel has so far held off launching a ground assault on the region, likely providing time to negotiate a release of more hostages as well as providing a window for diplomacy. 

Hamas released two U.S. hostages from Gaza late last week. 

President Joe Biden visited Israel last week, and the leaders of France and the Netherlands will visit this week in search of a solution for the conflict.

That said, Israel has amassed forces around Gaza for a planned ground invasion, which is widely seen as a potential trigger for widening the Israel-Hamas conflict.

(Oliver Gray contributed to this item.)

Latest comments

cutting the rate till zero, gradually? it makes a whole lot of sense.
now, the 10-y T yield is falling like a rock. probably Powell wants another term of Fed chair. if so, he would need Demcrat Potus's support. rate cuts might come sooner.
powell is spending like 60 billion in finance charges as banks hold capital in the reverse repo market, paying 5.5%... banks holding 1.2 trillion in it last report yesterday.. misinformation news we get... yields going up cause of the lack of demand.. has nothing to do with stock market...
aaaand just like that we are roaring 1pcnt higher cause algos , your true overlords, said so
Stocks will be negatively affected once the US strike force in the Mediterranean is ready to attack.
Powerful and strong
us stock market is biggest joke of the world.
Another miraculous "recovery" in the BIGGEST INVESTMENT JOKE IN THE WORLD.
I like the title "were" falling...
This article desperately seeks a reason, but none exsist!! Popcorn is out its kack of buyers and will keep going up
yawn, will end up green as usual
😊
who cares lack of demand of treasury notes is causing the pricing yields up... it ain't that 5% causing Markey crash, it's a hope investors buy it... that's why it's going up, a lack of demand... when media is lying to us with much misinformation
You get it!! All lies
each and every fxcking day our lying news misinforms us... cause national riots in our cities... and the ignorant ones fall for this bs... when market loses 20% these past 3 months, they aren't taking their 20 (out of 100) billion buying treasuries.. and I still see the same 1.1 trillion of banks money setting in the federal reserve reverse rop market earning the 5.5% profit, versus tax free 5%... which cares more rate? the tax free 5% or the 21% corporate taxed 5.5% (thus 4.5% post taxes)?
tff
Yep, manipulation for sure.
It's a conspiracy!!!
Easy.....the manipulative sock puppet analysts can just lowered the earnings forecast for the tech companies to beat the earnings estimate and spew a rosy bullish AI 🐂💩 news while deceptive IBs will upgrades them with fortune telling predictions.....
Market collapses for sure
Credit Card debt now over 1 trillion...keep partying 'Merica!
Elon, dont follow me please i dont want trouble
But i want discussion of payment a contract money before i do anything i cant get my hand on my money
If i am i work ill make it a beautiful thing
7 tech stocks support the whole SP500. What happens when those 7 stocks eventually miss earnings? To the depths of hell we go. I’m wearing my shorts since 4400.
Will tech liftStocks
for how long is the issue I think
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