- Treasury rates reached their highest points.
- Higher rates, Wall Street profits, and the Israel-Hamas crisis all contributed to the decline in stocks.
- Retail sales increased 0.7% in September over the prior month, more than doubling Wall Street’s forecast for a 0.3% uptick.
Following a stronger-than-expected 0.7% gain in retail sales in September over August, Treasury rates reached their highest points. Also rising to above 4.8% was the yield on the benchmark 10-year bond.
Higher rates, Wall Street profits, and the Israel-Hamas crisis all contributed to the decline in stocks. While Johnson & Johnson increased its sales outlook and Lockheed Martin anticipates growth in sales, Goldman Sachs and Bank of America exceeded consensus estimates for Q3 earnings and revenue.
Stocks open lower
Tuesday’s opening stock price decline came despite strong retail sales data that exceeded forecasts and the start of earnings season.
The Dow Jones Industrial Average (DJI), which had finished Monday with gains, dropped by approximately 0.4%, or 130 points. Contracts on the tech-heavy Nasdaq 100 (NDX) and benchmark S&P 500 (GSPC) fell 1.1% and 0.8%, respectively.
The yield on the 10-year Treasury increased by 12 basis points to be trading at 4.83%. On October 6, the 10-year yield reached a 16-year high of 4.89%.
According to the most recent data released on Tuesday, retail sales increased 0.7% in September over the prior month, more than doubling Wall Street’s forecast for a 0.3% uptick.The unexpected number shows that American consumers are still resilient in the face of downturn forecasts.
Following the excellent performance of peers last week, Bank of America (BAC) announced a 10% increase in profit. United Airlines (UAL), Johnson & Johnson (JNJ), and Lockheed Martin (LMT) are among the companies scheduled to release third-quarter earnings on Tuesday, along with Goldman Sachs (GS).
While earnings season is still early, there are already positive indications that the recent profit slump in corporate America may be coming to an end. On Wednesday, the tech sector’s results were led by Tesla (TSLA) and Netflix (NFLX), providing additional context for the impact of rising borrowing expenses.
