The Dow and S&P 500 see slight declines amid rising interest rate concerns and recent earnings reports
The S&P 500 and Dow Jones Industrial Average closed slightly lower on Tuesday as investors remained cautious due to concerns over rising interest rates and the latest earnings reports, as reported by CNBC.
The S&P 500 dropped by 0.05 percent, closing at 5,851.20, marking its first consecutive losses since early September.
The Dow fell by 6.71 points, or 0.02 percent, ending at 42,924.89, also posting its second straight losing session. Meanwhile, the Nasdaq Composite saw a small increase of 0.18 percent, closing at 18,573.13.
Earlier in the day, the yield on the US 10-year Treasury note climbed above 4.2 percent for the first time in about three months before retreating slightly.
Commentary from Federal Reserve officials indicating caution on the future path of interest rate cuts contributed to the rise in yields.
Despite a half-point rate cut last month, yields have continued to rise, partly due to improving economic data and growing uncertainty about the Fed’s next moves.
Traders see a 91 percent chance of a quarter-point rate cut at the Fed’s meeting on November 7, according to the CME’s FedWatch Tool.
Homebuilding stocks took a hit, with Lennar and D.R. Horton each falling more than 3 percent, driven by concerns over the persistence of higher interest rates.
LPL Financial chief global strategist Quincy Krosby explained, “The market had moved into overbought territory, making it vulnerable to anything it perceives as negative... It’s now worried that the Fed has not declared victory on inflation, and not to mention, the concerns post-election.”
Investors are also paying close attention to a series of upcoming earnings reports, including Tesla and Coca-Cola on Wednesday, and Honeywell on Thursday. General Motors surged nearly 10 percent on Tuesday after surpassing Wall Street’s third-quarter expectations and raising its full-year guidance.
Philip Morris also saw a significant increase of around 10 percent after the company raised its annual profit forecast.
However, Verizon dropped by 5 percent as its total revenue fell short of analyst predictions, and Lockheed Martin shares declined 6 percent following lower-than-expected quarterly sales.
So far, around one-fifth of the companies in the S&P 500 have reported their earnings, with most exceeding expectations, according to FactSet.
The S&P 500 has been on a strong run in October, reaching record highs and extending its year-to-date gain to more than 22 percent.
