Stocks Turn Volatile as Fed Signals More Interest Rate Hikes
2:26 pm Thursday, November 03rd, 2022
The stock market was trading with a mixed disposition after yesterday’s late afternoon retreat, but things have improved from earlier levels when the Dow, Nasdaq, and S&P 500 were down 1.2%, 1.9%, and 1.6%, respectively, and Treasury yields were moving up quickly.
The S&P 500 found support at the 3,700 level and Treasury yields pulled back from overnight highs, which offered some needed support for the stock market.
As participants digested Fed Chair Powell’s comments indicating that the Fed’s terminal rate is apt to be higher than previously expected, the 2-yr note yield and the 10-yr note yield hit 4.75% and 4.21%, respectively. Now, the 2-yr note yield is at 4.72% and the 10-yr note yield is at 4.15%.
Some negative earnings news from Qualcomm (QCOM), Roku (ROKU), and Fortinet (FTNT) also weighed on investor sentiment.
Mega cap stocks are another sticking point for the market today. The Vanguard Mega Cap Growth ETF (MGK) is down 1.2% versus a 0.4% loss in the S&P 500.
Roughly half of the 11 S&P 500 sectors trade in negative territory. Information technology (-1.7%) shows the steepest loss while energy (+2.5%) sits atop the leaderboard.
The information technology sector is weighed down by earnings-driven losses in Fidelity Nat’l Info (FIS) and Fortinet (FTNT). Meanwhile, positive earnings news from ConocoPhillips (COP), Marathon Oil (MRO), and Apa Corp (APA) is boosting the energy sector.
