Wall Street under pressure as rates uptrend weighs
Dow off ~0.5%, S&P 500 dips, Nasdaq edges red
Industrials weakest S&P sector; Staples lead gainers
Euro STOXX 600 index down ~0.3%
Dollar ~flat; gold rises; crude up >1.5%; bitcoin off ~0.6%
U.S. 10-Year Treasury yield edges up to ~4.19%
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WALL STREET UNDER PRESSURE AS RATES UPTREND WEIGHS
Shares on Wall Street are slipping early on Tuesday, undermined by the rising trend in U.S. Treasury yields, with rate-sensitive stocks like the tech sector getting hit.
The benchmark 10-year yield US10YT=RR is currently down at 4.174%, but since the Federal Reserve slashed interest rates by 50 basis points (bps) on September 18, the yield has surged nearly 60 bps.
Some analysts say the rise in yields reflects, among other things, the expectation that the U.S. economy will likely avoid recession, or if it does experience one, it will be mild.
So far this year, the S&P 500 .SPX has gained 22% and some analysts say this is out of line with earnings growth of about 6%.
"But this is no bubble, correct?," writes Dave Rosenberg, founder and president of Rosenberg Associates, in a research note. "We have had a 4.5 point P/E multiple expansion over the past year, to over 22x — something that has happened just 2% of the time in the past, representing a 2 standard deviation event."
Tuesday is light in terms of economic data this week, but it's packed in terms of U.S. earnings, with 100 S&P 500 companies expected to report. Baker Hughes BKR.O and Texas Instruments TXN.O are scheduled to report results after the bell.
Rosenberg notes that while most companies are beating estimates, "the gap is far smaller than it has been in the past and consensus forecasts for Q4 and for 2025 as a whole continue to be trimmed."
Here's an early market snapshot:
(Gertrude Chavez-Dreyfuss)
*****
FOR TUESDAY'S EARLIER LIVE MARKETS POSTS:
BENCHMARK TREASURY YIELD: CAN THE CLIMB CLEAR THE CLOUD? - CLICK HERE
CAUTION! S&P POSITIONING HAS BECOME 'STRETCHED' - CLICK HERE
BETTING ON M&A? HERE'S WHAT TO OWN - CLICK HERE
WEAK START FOR STOXX, TECH CAPS FURTHER LOSSES - CLICK HERE
EUROPEAN BEFORE THE BELL: UNCERTAINTY OFFSETS POSITIVE EARNINGS - CLICK HERE
BONDS AND GOLD BEGIN COUNTDOWN TO US ELECTION DAY - CLICK HERE
US early market snapshot https://tmsnrt.rs/3A4sX9b
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