Stock Market Update: Dow Falls 300 Points While Nvidia and Apple Set New Records
Date: October 21, 2024
By: Karen Friar and Ines Ferré
The U.S. stock market experienced a turbulent session on Monday, with significant fluctuations leading to a mixed close for major indexes. Contributing factors included rising interest rates, as reflected in the increasing yield of the 10-year Treasury bond, and anticipation of an upcoming earnings season packed with pivotal corporate reports.
Dow Jones Industrial Average Takes a Hit
The Dow Jones Industrial Average (DJI) plummeted over 300 points, concluding the day approximately 1.33% lower. This decline halted a three-day winning streak and highlighted investor caution amidst uncertainties regarding upcoming corporate performances. The broader S&P 500 (GSPC) also slipped nearly 0.2%, stepping back from a recent all-time high, although it still managed to end a historic sixth consecutive week of gains.
Tech Sectors in Focus
Contrasting with the Dow’s performance, the tech-heavy Nasdaq Composite Index (IXIC) recorded a modest increase, up 0.2%. Key players in the technology sector demonstrated resilience despite market volatility. Nvidia (NVDA), a leader in AI chip manufacturing, surged over 4% to reach its highest closing price ever. Similarly, multinational technology company Apple (AAPL) managed to eke out a record close, contributing to the overall mixed sentiment in the market.
Interest Rates on the Rise
The day was marked by a notable rise in the 10-year Treasury yield, which climbed 10 basis points to reach 4.18%. This represents its highest level since July and typically impacts investor sentiment, particularly concerning interest rate-sensitive stocks such as those in the real estate sector. The potential for higher borrowing costs has led to a cautious approach among investors, who are weighing the implications for business profitability.
Upcoming Earnings Season
Looking ahead, the earnings season is poised to take center stage as over 100 S&P 500 companies are set to report in the coming days. Notably, approximately 80% of the third-quarter updates released thus far exceeded analyst expectations, hinting at strong underlying business performance.
Investors are keenly anticipating results from Tesla (TSLA), which are scheduled for Wednesday. The company recently faced scrutiny over its robotaxi unveiling, which did not meet market expectations. This has bolstered concerns about Big Tech’s performance, even following the strong opening performance from Netflix (NFLX).
Among other high-profile companies releasing earnings this week are General Motors (GM), Coca-Cola (KO), American Airlines (AAL), and UPS (UPS). Additionally, Boeing (BA) is expected to announce its earnings on Wednesday, coinciding with a union vote on a tentative agreement aimed at ending a five-week strike by its workers. Boeing’s shares increased over 3% in anticipation of these developments.
Conclusion
As investors navigate the mixed signals from the market, all eyes are on the upcoming earnings reports. The performance of major corporations could play a critical role in determining market trends as the financial landscape begins to take shape heading into the end of the year.
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