Wall Street stocks experienced a notable slump on Thursday as yields on US government bonds surged following a Treasury auction that fell short of investor expectations. Federal Reserve (Fed) Chair Jerome Powell’s hawkish-toned speech on inflation further exacerbated the market downturn.
The S&P 500 (^GSPC) witnessed a decline of 0.8 percent, following a day of gains, marking its longest winning streak in two years. The Dow Jones Industrial Average (^DJI) dropped by approximately 0.6 percent, while the Nasdaq Composite (^IXIC) also saw a 0.9 percent fall.
The 1 p.m. ET treasury auction saw yields spike, with the 10-year Treasury yield (^TNX) rising to 4.62 percent, an increase of 10 basis points. The 30-year Treasury yield (^TYX) reached 4.8 percent, a rise of 15 basis points.
Throughout the day, major corporations released their financial results for the prior quarter. Disney (DIS) experienced a surge in shares, propelled by their after-hours announcement of quarterly results that surpassed expectations. Additionally, a tentative deal between a Hollywood studio and striking actors contributed to the boost. The media sector as a whole also experienced a positive impact.
Conversely, Arm (ARM), a recent addition to the stock market, saw a decline in response to its first results since listing, coupled with a revealed $6.2 billion loss by its backer, SoftBank.
In the commodities market, oil rebounded from earlier losses, when it hit its lowest point in three months, raising concerns about global consumption. West Texas Intermediate crude futures (CL=F) and Brent crude futures (BZ=F) each saw an increase of around 0.3 percent, reaching approximately $75 per barrel and nearly $80 a barrel, respectively.
The outcome of the Treasury auction has sent ripples through Wall Street, prompting investors to carefully analyze their positions and adapt their strategies in response to the shifting economic landscape. By the end of the trading day, all major Wall Street indices had closed lower. However, attention now shifts to pending corporate reports as the earnings season approaches its conclusion.
Source: Yahoo Finance
