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S&P 500 in Wild Swings as Yields Jump on Hawkish Fed Speak, Geopolitical Tensions

Stock Markets Aug 02, 2022 02:14PM ET
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© Reuters

By Yasin Ebrahim

Investing.com -- The S&P 500 swung between gains and losses Tuesday, on rising geopolitical tensions and a surge in U.S. Treasury yields as Federal Reserve members talked down the prospect of a pause on rate hikes.

The S&P 500 fell 0.16%, the Dow Jones Industrial Average fell 0.68%, or 224 points, the Nasdaq was up 0.20%.

Geopolitical tensions thatched up a notch in intraday after Chinese battery giant CATL reportedly said it would pause plans to invest billions of dollars in a new U.S. battery plant because of House Speaker Nancy Pelosi’s trip to Taiwan.

The House Speaker arrived in Taiwan despite Beijing warning of retaliation over the visit.

Big tech, meanwhile, traded mixed after Treasury yields surged following remarks from Fed members playing down the prospect of the Fed pausing or cutting rates next year.

Cleveland Fed President Loretta J. Mester said it would “take a while to get inflation back to that 2 percent,” and shrugged off worries about the slowing economy, stressing that a slowdown is “necessary.”

The comments arrived just hours after San Francisco Fed President Mary Daly said the Fed’s job to bring inflation down was “far from done.”

Losses in consumer stocks were kept in check by a jump in Tesla and a jump in cruise stocks.

Tesla (NASDAQ:TSLA) cut losses to climb more than 1% - adding to its more than 30% gain seen in July - ahead of the electric automaker’s shareholder meeting on Thursday.

The meeting, which will include a vote on the company’s 3-for-1 stock split proposal, will also be closely watched for any updates on Cybertruck, Tesla’s all-electric pickup truck.

Healthcare stocks were helped by a rally in Intuitive Surgical (NASDAQ:ISRG), DexCom (NASDAQ:DXCM) and Zimmer Biomet Holdings (NYSE:ZBH), with the latter up more than 5% after the medical device company raised its outlook on revenue following better-than-expected quarterly results.

Energy stocks, meanwhile, were flat despite an intraday rebound in oil prices amid uncertainty about whether major oil producers will decide to lift production at a meeting on Wednesday.

Commerzbank said that while the outcome of the OPEC+ meeting is “impossible to predict...there is more to suggest that the current production volume will be left unchanged, which should help prices to stabilize.”

On the earnings front, investors digested mostly positive quarterly results, with Uber the standout performer.

Uber Technologies (NYSE:UBER) reported its maiden positive cash flow and a revenue that topped expectations offsetting a wider than expected loss to send the share price up more than 17%.

Caterpillar (NYSE:CAT), however, reported a miss on revenue as the impact of its exit from Russia, higher costs and a stronger dollar weighed on performance. Its shares fell more than 4%.

Pinterest (NYSE:PINS) jumped more than 12% despite quarterly results falling short of Wall Street estimates as activist investor Elliott Management confirmed that it had become the company’s largest shareholder as it looks to forward to helping the company realize its “full potential."

In other news, Cowen Group (NASDAQ:COWN) climbed nearly 8% after the financial services firm reportedly agreed to be acquired by TD Bank for $1.3 billion.

S&P 500 in Wild Swings as Yields Jump on Hawkish Fed Speak, Geopolitical Tensions
 

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Comments (6)
Buy And Sell
Buy And Sell Aug 02, 2022 4:27PM ET
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Crash is coming to wall street real soon...
Louisa Emma
Louisa Emma Aug 02, 2022 4:27PM ET
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crazy world
James Gomez
James Gomez Aug 02, 2022 4:10PM ET
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We are and have been on the technical path. It's doing what's expected based off technicals and trend lines based off inflation and a technical recession and everything else that comes with it. The economy won't be right anytime soon and indices are hitting resistance based off trendline. Time for selling at this point since buying as hit it's peak. No reason to keep buying and holding anyhow at this time.
carlos guo
carlos guo Aug 02, 2022 4:07PM ET
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Brandon drones Mus.li.m in Middle East to stir up tension, Pelosi visits Taiwan despite China warning to help her insider stock trading, democrats send tens of billions US taxpayer dollars to actor in Ukraine to fund proxy war, CDC trying to scare people about monkeypox by doing everything except telling the group who is sp.read.ing it to stop spre.ad.ing it....democrats doing everything they can to try and distract from their destruction of the economy and reckless government spending since Brandon took office
Mitchel Pioneer
Mitchel Pioneer Aug 02, 2022 4:03PM ET
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Wonder how much they spent today alone to shore up the criminally inflated NASDAQ.
Dominic Mazoch
Dominic Mazoch Aug 02, 2022 2:58PM ET
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FED members should not be allowed to talk about the markets outside official FED and Congressional events.
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First Last
First Last Aug 02, 2022 2:58PM ET
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Trump tried to hide his philandering and general swampiness with NDAs.  Didn't work.
Jeremy Johnson
Jeremy Johnson Aug 02, 2022 2:58PM ET
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I can see your point because their words have moved markets in the recent past on many occasions, but this would also have to apply to the current administration and others who've moved markets on words alone, e.g. Elon Musk.
Jeremy Johnson
Jeremy Johnson Aug 02, 2022 2:58PM ET
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And yet, no amount of negative words, e.g. rate hike, recession, Pelosi visiting Taiwan, etc. seems to be fazing these drunk Bulls.
Samantha
Samantha Aug 02, 2022 2:58PM ET
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I honestly don't know. I have mixed feelings if they should say something or not when market analysts speculate pauses in rate adjustments.
Dominic Mazoch
Dominic Mazoch Aug 02, 2022 2:58PM ET
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And the FED does not have their meetings live streamed. Yet a member can have a press conference on his/her own.
jason xx
jason xx Aug 02, 2022 2:44PM ET
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Idk why China is making drama over Pelosi going to Tiawan anyway? Who gives a chit. You want to start a war over it? really?
First Last
First Last Aug 02, 2022 2:44PM ET
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The CCP has always been obsessed w/ controlling where people go.
Joseph Chikeke
Joseph Chikeke Aug 02, 2022 2:44PM ET
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If you don't know the geopolitics concerned it's better to refrain from commenting
First Last
First Last Aug 02, 2022 2:44PM ET
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Joseph Chikeke   Also need to understand how the Chinese culture has devolved under the CCP.
 
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