Stock Market Today: Dow Falls as Rising Yields Squeeze Stocks
The stock market took a hit today as the Dow closed lower due to rising Treasury yields. Early-day optimism was quickly pierced by inflation data that surprised on the upside and signs of ongoing strength in the labor market. The Dow fell 0.6% or 173 points, the S&P 500 fell 0.6%, and the Nasdaq slipped 0.6%.
Inflation on the Rise, Labor Market Shows Strength
Inflation is expected to have risen to 0.4% in September, pushing the annual rate to 3.7%. This is slightly above expectations, which predicted a rise of 0.3% and an annual rate of 3.6%. The core measure, which excludes food and energy, remained steady at 0.3%. However, the pace of improvement in this measure remains “uncomfortably slow” according to Stifel. On the other hand, the labor market continues to surprise on the upside, with jobless claims falling short of expectations. Jefferies notes that the claims data does not show any evidence of increased layoff activity. Despite these factors, the odds for a rate hike next month remain low at 12%.
Delta Air Lines and Ford Face Challenges
Delta Air Lines reported better-than-expected third-quarter results but cut its full-year revenue outlook, causing its shares to drop more than 2%. The airline attributed the weaker guidance to a rise in fuel costs. Ford Motor Company also faced challenges as the United Auto Workers Union called a surprise strike at its most profitable plant in Kentucky. This disruption led to a 2% fall in Ford’s stock. Stellantis, down 2%, is hoping to avoid further strikes as it holds talks with the union.
Birkenstock and Disney in the News
Birkenstock Holding experienced a 6.6% fall following a disappointing stock market debut. The German sandal maker ended the day below its initial public offering price. In other news, Walt Disney and Comcast are in the process of valuing streaming site Hulu. Investment banks Morgan Stanley and JPMorgan have been hired to assess the site’s worth before the November 1 deadline, which will determine whether Disney will buy the remaining 33% stake in Hulu from Comcast. This deal was established in 2019 with a guaranteed sale price of $27.5 billion for Comcast’s stake.
Overall, the stock market faced challenges today due to rising Treasury yields. Inflation data and labor market strength played a significant role in the market’s performance. Delta Air Lines, Ford, and Birkenstock all faced their own obstacles, while Disney and Comcast continue to negotiate their stakes in Hulu. As investors navigate these challenges, the stock market remains unpredictable.
