US equity indexes experienced mixed results in midday trading on Wednesday as a slew of quarterly earnings reports were released and crude oil futures continued their downward trend. Reports indicated that Israel assured the US that its retaliatory strikes on Iran would be limited to military targets. The Nasdaq Composite experienced a slight dip of less than 0.1%, settling at 18,315.1, while the S&P 500 managed to rise by 0.2% to 5,827.6.
Conversely, the Dow Jones Industrial Average saw a climb of 0.6%, reaching 42,987.4. Among the sectors that faced declines during the trading session were communication services, consumer staples, and technology. Shares of ASML, a Netherlands-based leader in the manufacturing of equipment for chip production, fell by 6.1% during the day—marking the most significant decline on the Nasdaq.
This decline continued from Tuesday when the company unintentionally published their fiscal Q3 results a day early, revealing that their full-year 2025 outlook was below market expectations. This disappointing guidance negatively impacted other technology stocks, further influencing investor sentiment into Wednesday afternoon. In contrast, United Airlines ($UAL) reported its Q3 adjusted earnings late Tuesday, which surpassed market predictions, supported by an increase in sales compared to the previous year.
The airline operator announced a stock repurchase program amounting to up to $1.5 billion, which caused its shares to surge nearly 12% intraday, making it the top gainer on the S&P 500. Shares of Morgan Stanley ($MS) also saw a notable increase, climbing 7.2% intraday, placing them among the leading gainers on the S&P 500 after the company disclosed higher Q3 earnings alongside increased net revenue. Meanwhile, almost all US Treasury yields experienced a decline during the session, with the yield on the 10-year note falling by 2.6 points, now at 4.01%, and the two-year yield decreased by 2.1 basis points to 3.94%. The slump in yields aligns with rising expectations, where the likelihood of a 25 basis-point interest rate cut next month has intensified to 93% as of Wednesday afternoon, up from 80% just a week prior, according to the CME Group's FedWatch Tool.
Following the Fed's most recent policy meeting in September, when a rate cut of 50 basis points was made—bringing the target range down to 4.75% to 5%—the central bank suggested that its focus was shifting more towards the labor market rather than inflation. Although the jobs data released since the last Fed meeting has introduced some challenges to this overarching view, the market continues to anticipate further rate cuts by the end of the year. In remarks given at an event in Atlanta, Atlanta Fed President Raphael Bostic projected that US growth would slow down for the remainder of the year but remain robust, predicting that the Fed would lower the benchmark rate to a range of 3% to 3.5% in the long run.
"I do not have a recession in my outlook… we should be somewhere in the 2% growth level," he stated. Turning to US economic indicators, the New York Federal Reserve's services index has dropped to minus 2.2 in October from a previous reading of 0.5 in September. This initial figure for the services sector in October suggests a contraction. Additionally, US import prices fell by 0.4% in September, which was greater than the anticipated 0.3% decrease reported in a Bloomberg survey, following a 0.2% drop in August.
Export prices also fell, decreasing by 0.7% in September, compared to expectations for a 0.4% decline and a 0.9% decrease in August. In the commodities market, West Texas Intermediate crude oil prices declined by 0.1%, settling at $70.51 per barrel. Reports indicate that Israel's response plan regarding this month's Iranian attack is ready, as cited by CNN from a source close to the situation.
Israeli officials, including Prime Minister Benjamin Netanyahu, have assured that the planned counterstrikes would target military installations rather than oil or nuclear facilities. The CBOE Volatility Index, often referred to as the fear gauge for investors, fell by 2.7% to 20.08. In the precious metals market, gold prices edged up by 0.2% to $2,684.52 per ounce, while silver gained 0.3%, rising to $31.85..