US Stocks Slide as Earnings Disappoint; Bonds Rise: Markets Wrap

US equities declined and Treasuries rose as investors scrutinized a flood of earnings reports for clues on the outlook for corporate profits amid high interest rates and slowing economic growth.

(Bloomberg) — US equities declined and Treasuries rose as investors scrutinized a flood of earnings reports for clues on the outlook for corporate profits amid high interest rates and slowing economic growth.

The S&P 500 slipped 0.8% as consumer confidence dipped to lowest since July and US home-price gains cooled. Meanwhile, First Republic Bank plunged 28% after a worse-than-expected drop in deposits reignited concerns about a regional banking crisis. 

In a busy week of corporate earnings, results so far have been mixed. General Motors Co. and PepsiCo Inc. beat expectations. United Parcel Service Inc. sank 9.2% after guidance disappointed, and UBS Group AG fell in New York after results fell short. 

Tech majors Microsoft Corp. and Alphabet will report after the bell.

The yield on 10-year Treasuries continued its slide to 3.42%, decidedly dipping below the 200-day moving average. The market is now pricing the peak for US interest rates in June, and then a decline to end the year below 4.5%. 

Speculation is swelling a recession is near amid signs of a credit crunch, especially after results from First Republic and UBS, wrote Matt Maley, chief market strategist at Miller Tabak + Co, in a morning note.

“When was the last time a material contraction in credit did not result in a recession? The answer: Never!” he said. “Investors need to spend a little more time using common sense … and adjust their portfolios to the reality that a soft landing in the economy this year is a pipe dream.”

Cracks are also apparent in the collective consumer mood, wrote Jim Baird, chief investment officer at Plante Moran Financial Advisors.

“A potential recession is coming into view,” he said. “A growing number of households believe that business conditions will deteriorate further and that employment conditions will soften as a result. Inflation worries remain, with very little progress being made in terms of expectations for a softening in the pace of price increases in the months ahead.”

A Bloomberg gauge of the dollar climbed. Government bonds across Europe rallied, with the German 10-year yield falling as much as eight basis points. And the Stoxx Europe 600 index dropped 0.4%. 

Among other US companies reporting earnings Tuesday:

  • Spotify Technology SA rose 5.9% after adding subscribers
  • 3M Co. was little changed after announcing a restructuring push
  • General Electric Co. was little changed after raising forecasts
  • McDonald’s Corp. was little changed after beating sales estimates
  • Danaher Corp. dropped 6.2% after lowering full-year guidance

Elsewhere, oil fell, gold was little changed, iron ore extended a losing streak to a fifth day and Bitcoin slid for a third day.

Key events this week:

  • Australia CPI, Wednesday
  • Sweden rate decision, Wednesday
  • Eurozone economic, consumer confidence, Thursday
  • US initial jobless claims, GDP, Thursday
  • Bank of Japan meets on interest rates, Friday
  • Euro-area GDP, Friday
  • US personal income, Friday

Earnings highlights:

  • Wednesday: Boeing, Meta, Hilton
  • Thursday: Amazon, American Airlines, Intel, Mastercard, Southwest Airlines, Hershey, Honeywell, Barclays

Some of the main moves in markets:


  • The S&P 500 fell 0.8% as of 11:33 a.m. New York time
  • The Nasdaq 100 fell 0.9%
  • The Dow Jones Industrial Average fell 0.4%
  • The Stoxx Europe 600 fell 0.4%
  • The MSCI World index was little changed


  • The Bloomberg Dollar Spot Index rose 0.4%
  • The euro fell 0.6% to $1.0982
  • The British pound fell 0.7% to $1.2401
  • The Japanese yen rose 0.2% to 133.93 per dollar


  • Bitcoin fell 0.4% to $27,348.24
  • Ether fell 1.3% to $1,816.24


  • The yield on 10-year Treasuries declined seven basis points to 3.42%
  • Germany’s 10-year yield declined 13 basis points to 2.38%
  • Britain’s 10-year yield declined nine basis points to 3.69%


  • West Texas Intermediate crude fell 2.3% to $76.96 a barrel
  • Gold futures were little changed

This story was produced with the assistance of Bloomberg Automation.

–With assistance from Robert Brand, Tassia Sipahutar, Sujata Rao and Subrat Patnaik.

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