Wall Street erases losses, ASX set to dip
Overall, the S&P 500 fell 3.38 points to 6,734.11 points. The Dow Jones Industrial Average fell 309.74 to 47,147.48, and the Nasdaq composite index rose 30.23 to 22,900.59.
One way companies can quell criticism of too high stock prices is to deliver solid growth in profits. That raises the stakes for Nvidia’s earnings report on Wednesday, when it will reveal how much it earned over the summer months.
If it falls below analysts’ expectations, there may be a further decline. This will have a huge impact on the market because Nvidia has become Wall Street’s largest stock by value. This allows Nvidia’s stock movements to have a larger impact on the S&P 500 than others, and it can almost single-handedly steer the index’s direction on any given day.
Another way that stock prices appear cheaper overall is when interest rates fall. This is because bonds that pay less interest may make investors willing to pay higher prices for stocks and other types of investments.
Treasury yields have fallen for much of this year due to expectations that the Fed will cut its key interest rate several times. And the Fed has already cut twice in hopes of supporting a slowing job market.
But questions are growing about whether a third rate cut will actually happen after the Fed’s next meeting in December; This was something investors had previously seen as very likely. The downside of low interest rates is that they can worsen inflation, which remains stubbornly above the Fed’s 2 percent target.
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Fed officials pointed out that the US government shutdown delayed the release of job market updates and other signals about the economy. With less information and less certainty about how things are going, some Fed officials have suggested it might be better to wait until December to get more clarity.
In the bond market, the yield on the 10-year Treasury note rose from 4.11 percent to 4.14 percent at the end of Thursday.
Bitcoin is one of the investments that can receive support from low interest rates. It fell below $95,000, returning to its level in May. In October alone, it was close to $125,000.
Meanwhile, the price of gold fell by 2.4 percent. It set records throughout the year as investors sought protection from high inflation and huge debt burdens built up by the U.S. and other governments around the world. However, if interest rates remain high, it may harm gold, which earns nothing in the way of interest or dividends for its investors.
In foreign stock markets, indices across Europe and Asia fell. South Korea’s Kospi index suffered one of the world’s biggest losses, losing 3.8 percent.
In London, the FTSE 100 Index lost 1.1 percent amid speculation that the UK government may abandon plans to raise income taxes, which could help reduce its debt.
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The Market Summary newsletter is a summary of the day’s transactions. Let’s each take ittoday afternoon.
