US equity indexes experienced a decline intraday Wednesday, continuing a downward trend as government bond yields surged amid rising concerns that inflation might escalate following an expansionary fiscal approach in the wake of the presidential elections. The S&P 500 dropped 1.1%, settling at 5,787.2, while the Dow Jones Industrial Average fell 1.8% to 42,473.4, and the Nasdaq Composite saw a decrease of 1.8%, closing at 18,247.8.
The only sectors not in negative territory were utilities and real estate, underscoring the widespread selloff across the market. Among the massive capitalized companies delivering quarterly results this week are Tesla (TSLA), IBM (IBM), United Parcel Service (UPS), and Colgate-Palmolive (CL). As the US presidential election looms with less than two weeks until the polls, the uncertainty remains palpable, and inflation has emerged as the foremost concern from both Republican and Democratic policy platforms.
Current projections from Oxford Economics reveal that while the upcoming presidential race appears to be a "coin flip," the risks skew towards a more favorable outcome for growth and inflation than initially anticipated during the upcoming presidential term. In the bond market, most US Treasury yields showed an uptick intraday, with the 10-year yield climbing 4.4 basis points to reach 4.25%, marking its highest level since late July.
The two-year yield similarly increased, up 4.3 basis points to 4.08%, achieving its strongest value since mid-August. Furthermore, the Federal Reserve's likelihood of keeping interest rates unchanged during the upcoming policy meeting on November 7 increased to 11%, a notable rise from 7.5% just a day prior.
This stands in stark contrast to the zero probability of a Fed pause observed a month ago, while market expectations currently favor an 89% chance of a 25 basis point rate cut. Investor hesitation about the Fed potentially adopting a less dovish stance than anticipated has contributed to rising Treasury yields, leading market participants to brace for another round of earnings releases to gauge the US economic landscape, as indicated in D.A.
Davidson's commentary. In commodities, gold prices retreated by 1%, settling at $2,733.11 per ounce after reaching a record high of $2,772.6 earlier in the trading session. Silver fared worse, plummeting 3.5% to $33.82, with both precious metals initially hitting fresh intraday peaks earlier this week. On the economic front, US existing-home sales saw a decrease, falling 1% to a seasonally adjusted annual rate of 3.84 million units in September, down from 3.88 million in August, according to data from the National Association of Realtors released Wednesday.
This figure failed to meet the average forecast of 3.88 million from a Bloomberg survey, marking a total sales drop of 3.5% compared to the same period last year. In the sphere of corporate developments, shares of Enphase Energy ($ENPH) plummeted by over 15% intraday, making it the worst performer in the S&P 500 after reporting a year-over-year decline in Q3 non-GAAP earnings and revenue. CoStar Group ($CSGP) similarly reported decreased Q3 non-GAAP earnings, coupled with sales growth that fell short of market expectations.
Subsequently, the firm adjusted its full-year revenue guidance downward, leading to shares sinking over 6% intraday, the sharpest decline on the Nasdaq. Additionally, McDonald's ($MCD) saw a 5.2% fall in its share prices, making it the most significant laggard on the Dow, following a report from the US Centers for Disease Control and Prevention linking an E.
coli outbreak across 10 states to the company's Quarter Pounder burgers. Meanwhile, West Texas Intermediate crude oil experienced a 1.6% decline, settling at $70.59 per barrel. On the inventory side, US commercial crude oil stocks, excluding those held in the Strategic Petroleum Reserve, bounced back by 5.5 million barrels for the week ending October 18, reversing a previous decline of 2.2 million barrels and surpassing the one million barrel increase anticipated in a Bloomberg survey..