Stocks wavered amid corporate earnings as traders monitored the latest developments in the Middle East and awaited Jerome Powell’s speech for clues on the Federal Reserve outlook.
(Bloomberg) — Stocks wavered amid corporate earnings as traders monitored the latest developments in the Middle East and awaited Jerome Powell’s speech for clues on the Federal Reserve outlook.
The S&P 500 hovered near 4,300. Tesla Inc. slumped 9% after missing both earnings and sales estimates for the quarter. Netflix Inc. surged as much as 18% after posting its best quarter for subscriber growth in years. Treasury 10-year yields pushed away from the 5% zone. Wall Street also kept a close eye on the latest geopolitical events, with Israel saying it responded to the source of fire after 20 rocket and missile launches from Lebanon.
Powell is set to deliver his remarks 12 p.m. at the Economic Club of New York, leading a busy schedule of Fed speakers Thursday. Regional presidents Austan Goolsbee (Chicago), Raphael Bostic (Atlanta), Patrick Harker (Philadelphia) and Lorie Logan (Dallas) were also due to speak at different events.
“We suspect investors will be reluctant to press the trade in either direction until Powell delivers his comments,” said Ben Jeffery, a US rates strategist at BMO Capital Markets. “We continue to monitor 5% in 10-year yields.”
Read: The Fed Is Losing Control Over Bond Market’s Moves: Surveillance
Powell is expected to suggest that the recent Treasury yield increase means the Fed probably won’t have to raise rates when it meets on Oct. 31-Nov. 1. But with inflation still well above the Fed’s 2% goal, he’s likely to hold out the possibility of an increase at its final meeting of the year, in December.
“With little question about what the Fed will do at its Nov. 1 meeting, we expect he will be intentionally vague about the path of future policy,” said Will Compernolle, macro strategist at FHN Financial.
Thursday’s economic reports were mixed. Applications for US unemployment benefits dropped to the lowest level since January as the labor market kept powering ahead. Sales of previously owned US homes fell to the lowest level since 2010 as affordability worsened even further.
- American Airlines Group Inc. topped expectations for profit even as its forecast for the rest of the year fell short.
- Union Pacific Corp. reported profit that topped analysts’ estimates, which had been adjusted down in the last month, as the railroad leaned on efficiency to make up for lower carloads and higher labor costs.
- AT&T Inc. raised its free cash flow guidance for the full year after posting mobile subscriber gains and profit that beat analysts’ estimates.
- Lam Research Corp.’s revenue fell for a third straight quarter, a sign demand for chipmaking equipment remains sluggish.
- Blackstone Inc., grappling with higher interest rates and stung by a pullback in dealmaking, reported a 12% decline in quarterly profit available to shareholders.
- Las Vegas Sands Corp. authorized its first share buyback program since 2020, signaling management’s confidence in the business after years of pandemic-related hardship.
- Equifax Inc. tumbled after the credit-reporting agency cut its adjusted earnings-per-share guidance for the full year, with analysts pointing to a knock-on impact from a softer mortgage market in the US.
- VMWare Inc. slid after the Financial Times reported Chinese regulators may hold up its $61 billion acquisition by Broadcom Inc., the latest chip deal to get snarled in Beijing.
Key events this week:
- Japan CPI, Friday
- China loan prime rates, Friday
- Philadelphia Fed President Patrick Harker speaks, Friday
Some of the main moves in markets:
- The S&P 500 was little changed as of 11:39 a.m. New York time
- The Nasdaq 100 was little changed
- The Dow Jones Industrial Average was little changed
- The Stoxx Europe 600 fell 1.2%
- The MSCI World index fell 0.5%
- The Bloomberg Dollar Spot Index was little changed
- The euro rose 0.4% to $1.0577
- The British pound was little changed at $1.2148
- The Japanese yen was little changed at 149.87 per dollar
- Bitcoin rose 1.4% to $28,669.75
- Ether fell 0.1% to $1,560.38
- The yield on 10-year Treasuries advanced one basis point to 4.93%
- Germany’s 10-year yield was little changed at 2.92%
- Britain’s 10-year yield advanced one basis point to 4.67%
- West Texas Intermediate crude rose 0.1% to $88.44 a barrel
- Gold futures rose 0.1% to $1,971.20 an ounce
This story was produced with the assistance of Bloomberg Automation.
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