Stock Market Today: Dow Falls as Energy Stocks Weigh; Big Tech Earnings Eyed
Dow Falls as Treasury Yields Retreat
The stock market experienced a decline today as the Dow fell by 0.6% or 190 points. This reversal was primarily due to weakness in the energy and financial sectors, despite a rally in the tech industry. Treasury yields also retreated from their recent multi-year highs, with the yield on the 10-year Treasury falling to 4.854% after reaching a 16-year high of 5.025%. These fluctuations in yields have been influenced by various factors, including stronger-than-expected economic growth, persistent inflation, and increased borrowing by the U.S. Treasury. The Federal Reserve is expected to maintain interest rates next month during their two-day meeting.
Tech Stocks in Focus Ahead of Earnings
Tech stocks started the week on a positive note as investors eagerly anticipate the upcoming earnings reports from big tech companies. Microsoft Corporation and Alphabet are set to release their September quarter results on Tuesday. Despite facing fresh regulatory concerns, Alphabet’s stock climbed higher. Regulatory authorities in Japan have launched an investigation into alleged antitrust violations related to the company’s ad-revenue sharing practices with android phone makers. Other tech giants such as Meta Platforms, International Business Machines, Amazon, and Intel are scheduled to report their earnings later in the week.
Energy Sector Struggles as Chevron Makes $53B Deal
Chevron Corp’s announcement of a $53 billion deal to acquire Hess Corporation took a toll on the broader energy sector, resulting in a more than 3% decline in Chevron’s stock price. The deal is expected to enhance Chevron’s assets in Guyana and boost its overall oil and gas output. Additionally, falling oil prices and concerns about possible supply disruptions due to the Israel-Hamas conflict further dampened sentiment in the energy sector.
Bitcoin Rally Boosts Crypto Stocks
Bitcoin experienced a significant rally of over 5%, surpassing the $31,000 mark. This surge in price is attributed to growing optimism surrounding the potential approval of a spot-Bitcoin exchange traded fund (ETF). Various firms, including Blackrock, Grayscale, and Fidelity, have filed applications for a spot-Bitcoin ETF. The possibility of such an ETF gained traction after a judge ruled that the U.S. Securities and Exchange Commission had no legal grounds to reject Grayscale’s plan to convert its GBTC bitcoin fund into an ETF. As a result, stocks of companies like Marathon Digital Holdings Inc, Riot Platforms, and MicroStrategy Incorporated experienced gains.
Despite a reversal in Treasury yields and weakness in the energy sector, tech stocks and Bitcoin provided some positive momentum in the stock market today. Investors will closely watch the upcoming earnings reports from major tech companies to gauge the health of the industry. Meanwhile, the energy sector faces challenges amidst Chevron’s acquisition deal and falling oil prices. The crypto market, particularly Bitcoin, continues to generate interest as the possibility of a spot-Bitcoin ETF draws nearer.
