Global Stock Markets Falter Amid Rising US Treasury Yields and Potential Rate Hikes By

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On Friday, global stock markets, including those in the US and Europe, experienced declines due to rising US treasury yields reaching a 16-year high and the potential escalation of the Israel-Hamas conflict. The MSCI global stocks gauge fell by 0.89%, while emerging market stocks saw a 1.23% loss, according to the final summary published on October 20, 2023.

Federal Reserve Chairman Jerome Powell’s comments on Thursday regarding possible interest rate hikes, attributed to a robust economy and tight labor market, heightened trader risk aversion. This led to losses in Wall Street indices such as the , , and .

In Europe, poor corporate earnings resulted in a two-week low for , with declines also seen in Germany’s , France’s , and 100. Asian markets including Hong Kong’s , China’s , 225, Australia’s , and New Zealand’s S&P/NZX 50 index also ended lower.

On the commodities front, energy prices saw mixed trends with rises in US and but a fall in . Gold prices increased while silver decreased.

On Thursday, October 19, U.S. equities took a downturn due to Powell’s remarks suggesting an economic slowdown for inflation control and potential future interest rate hikes. This resulted in a nearly 5% yield on the 10-year Treasury note.

Various companies experienced significant shifts in share prices. Tesla (NASDAQ:) saw a 9.3% drop due to missed earnings and revenue forecasts following price cuts aimed at stimulating demand. In contrast, Netflix (NASDAQ:) surged by 16.1% after adding nearly 9 million Q3 subscribers and announcing a price hike.

Genuine Parts was the day’s weakest S&P 500 performer, with shares plunging by 12.5% due to below-expected revenues and flat same-store sales. Discover Financial Services (NYSE:) saw a 7.9% decrease in shares as profits plunged due to increased delinquencies. AT&T (NYSE:)’s shares rose by 6.6% driven by subscriber growth, while Union Pacific (NYSE:) saw a 2.1% jump in shares after surpassing profit forecasts. American Airlines (NASDAQ:) shares rose by 0.8%, buoyed by positive profit expectations and an optimistic outlook for the upcoming holiday travel season.

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