Stocks Show Mixed Responses Ahead of Powell’s Address: Market Overview
Stocks showed mixed reactions as investors reviewed corporate earnings and awaited Jerome Powell’s speech for insights on the Federal Reserve’s stance. The S&P 500 remained stable, while Netflix Inc. saw a surge due to strong quarterly subscriber growth and Tesla Inc. faced a dip due to earnings and sales shortfalls. The 10-year US government bond rates inched closer to 5%.
Jerome Powell is scheduled to speak at the Economic Club of New York, followed by other Fed speakers during the day. Applications for US unemployment benefits reached their lowest since January, indicating a strong labor market. Powell might hint that the recent yield increase might keep the Fed from raising rates in the upcoming meeting, but a rate increase in December is still a possibility due to persisting inflation.
On the geopolitical front, efforts to address the Israel-Hamas conflict are underway. UK Prime Minister Rishi Sunak, United Nations Secretary-General Antonio Guterres, and Germany’s top diplomat are visiting the region. US President Joe Biden highlighted readiness to send aid to Gaza.
Corporate Highlights:
- American Airlines Group Inc. (AAL) reported strong profits but gave a subdued forecast for the year.
- Union Pacific Corp.(UPC) reported higher-than-expected profits.
- AT&T Inc. (T) raised its free cash flow guidance after reporting positive results.
- Lam Research Corp. (LRCX) saw a decline in revenue for the third consecutive quarter.
- Blackstone Inc. (BX) reported a 12% drop in quarterly profit.
- Las Vegas Sands Corp. (LVS) initiated its first share buyback program since 2020.
- Equifax Inc. (EFX) reduced its adjusted earnings-per-share guidance for the year.
- VMWare Inc. (VMW) may face regulatory challenges in China for its acquisition by Broadcom Inc.
Market Movements:
- The S&P 500 increased by 0.1%.
- Nasdaq 100 rose by 0.4%.
- Dow Jones Industrial Average showed little change.
- In the currency market, the euro and Bitcoin showed modest gains, while Ether faced a slight drop.
- The yield on 10-year Treasuries increased to 4.94%.
- In commodities, West Texas Intermediate crude dropped to $87.20 a barrel and Gold futures decreased to $1,963.30 an ounce.
