The US equity markets experienced a mixed trading session as the Dow Jones Industrial Average surrendered earlier gains following a significant increase in government bond yields. In particular, the Nasdaq Composite ended the day up by 0.7%, closing at 18,539.7. Major tech giants including Apple, Microsoft, Alphabet, Amazon.com, and Meta Platforms are set to release their quarterly earnings results in the upcoming week, which may further influence market trends. On the other hand, the S&P 500 managed a slight uptick, reaching 5,811.3, while the Dow Jones Industrial Average decreased by 0.7%, ultimately settling at 42,067.4.
The sectors that provided support during the trading day included technology, communication services, and consumer discretionary, whereas the financial and utilities sectors were the primary laggards. Treasury yields in the United States saw a rise, with the yield on the 10-year note climbing by 1.4 basis points to 4.22%, approaching levels not seen since late July.
Similarly, the two-year rate increased by 1.3 basis points to 4.08%, remaining near its strongest points since mid-August. Throughout much of the session, most Treasury yields were stable or trending downward. Ryan Field, a Global Macro Strategist at Oxford Economics, provided insights on the current economic landscape.
He remarked, “Ongoing labor market softening suggests US monetary policy is restrictive at current levels. We believe that a Republican clean sweep in the upcoming US elections, which would likely lead to increased inflationary pressures, would merely delay Federal Reserve rate cuts rather than eliminate them entirely.” In the commodities market, gold experienced a modest increase of 0.1%, reaching $2,752.71 per ounce.
This upswing has contributed to a 27% rise in the precious metal's value since the start of the year. Likewise, silver saw a slight improvement, with a 0.1% gain that brought its trading price to $33.83, marking a 37% increase this year. Economic data released on Friday painted a mixed picture. The University of Michigan's consumer sentiment index was adjusted upward to 70.5 for October, surpassing the preliminary estimate of 68.9 and slightly exceeding the expected figure of 69.1 in a survey conducted by Bloomberg.
This increase places the index above the final reading of 70.1 from September, marking the highest value observed since April 2024. Additionally, new orders for durable goods in the United States experienced a decline of 0.8% in September, consistent with the previous month, and aligning with revised expectations of a 1% decrease noted in a Bloomberg survey.
Notably, excluding a 3.1% dip in transportation orders, new orders would have seen a rise of 0.4% in September, following a 0.6% increase in August, although expectations had been set for just a 0.1% decline. Bernard Yaros, the lead US economist at Oxford Economics, highlighted the resilience in core orders, stating, “Core orders, which are a clearer indication of future capital spending by companies, rose at a solid pace, defying our expectations for a moderate decline.” In corporate news, Tapestry announced its intention to contest a recent decision by a US federal court, which authorized the Federal Trade Commission’s move to block the company’s acquisition of Capri Holdings.
This development led to a robust gain for Tapestry’s shares, which rose 13% intraday, making it the top performer on the S&P 500. Conversely, the index's worst performer was Mohawk Industries, whose shares dropped 12% intraday after the company issued a disappointing adjusted earnings forecast for Q4, which fell short of analysts' averaged predictions from Capital IQ. In the energy sector, West Texas Intermediate crude oil gained 2.1%, reaching a price of $71.68 per barrel.
The trading day reflected ongoing adjustments across various sectors, heavily influenced by economic indicators and corporate performance..