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Sunday, October 2, 2022

S&P 500 Falls as 10-Year Treasury Yield Briefly Tops 3% for First Time Since 2018

S&P 500 Falls as 10-Year Treasury Yield Briefly Tops 3% for First Time Since 2018
© Reuters

By Yasin Ebrahim

Investing.com – The S&P 500 fell Monday, as wild swings continued in technology stocks amid an ongoing rise in Treasury yields ahead of a widely expected Federal Reserve interest rate hike later this week.

The S&P 500 fell 0.4%, the Dow Jones Industrial Average slipped 0.54%, or 177 points, the Nasdaq rose 0.39%.

Fresh from a brutal selloff in April, tech stocks continued to trade wildly, swinging between positive and negative after the 10-year Treasury yield briefly breached 3% for first time since 2008 on bets of steeper Fed rate hikes ahead.

“We see the FOMC on course to deliver its second rate hike of the cycle – a 50bp hike – at its May meeting, while also announcing its plan to begin reducing the size of its balance sheet starting in June,” Morgan Stanley said in a note.

Gains from Microsoft (NASDAQ:MSFT), Alphabet (NASDAQ:GOOGL) and Meta (NASDAQ:FB) helped offset a decline in Amazon.com  (NASDAQ:AMZN) and Apple (NASDAQ:AAPL).

Communication services held above flatline, underpinned by gains in the Warner Bros Discovery (NASDAQ:WBD), Paramount (NASDAQ:PARA), and Activision Blizzard Inc (NASDAQ:ATVI). 

Activision Blizzard (NASDAQ:ATVI) was up more than 3% after famed-investor Warren Buffett said that Berkshire Hathaway (NYSE:BRKa) now owned a 9.5% stake in the video game giant.

Quarterly results from corporates, meanwhile, did little to support investor sentiment on stocks.   

Global Payments (NYSE:GPN) fell more than 9% despite reporting a beat on both the top and bottom lines and full-year guidance that met Wall Street expectations.
Moodys (NYSE:MCO) fell down 5%, after credit ratings company trimmed its full-year earnings guidance on jitters that market volatility is set to continue. 
On the economic front, U.S. manufacturing activity in April slowed to its lowest reading since September 2020, pressured by further supply chain woes following recent lockdowns in China.

“Supplier delivery times are lengthening again, probably in response to China lockdowns,” Jefferies said in a note.

Source: Investing.com

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