On Wednesday (October 25) in the US market, as the stock price of Alphabet, the parent company of Google, fell, the Nasdaq Composite Index and the Standard&Poor's 500 Index fell, and the rebound in the yield of 10-year treasury bond bonds also put pressure on related stocks.
As of press release, the Nasdaq Composite Index fell 1.61% and the S&P 500 Index fell 0.82%. The Dow Jones Industrial Average rose 0.25%. The S&P 500 index fell by about 2% in October.
Due to Google's parent company Alphabet's cloud business not meeting analyst expectations, the company's stock price fell by more than 8%, masking its strong revenue and profit growth. The decline in Alphabet stock is the most severe since October 2022. The communication services sector of the S&P 500 Index fell nearly 5%, with Alphabet being the largest component of the sector, expected to record its worst day since October 2022.
Meanwhile, stocks of technology giants and Apple and Amazon fell 0.3% and 3.3% respectively. Amazon will announce its third quarter results after the close of trading on Thursday.
Although corporate profits remain the focus of investors' attention this week, investors are also closely monitoring returns as they hover around multi-year highs. The yield of benchmark 10-year treasury bond rose 7 basis points to more than 4.90%. Earlier this week, trading prices exceeded 5%, which made investors feel uneasy and hit technology stocks.
Ed Moya, a senior market analyst at Oanda, said, "This has made headlines and I cannot shift my gaze away from the bond market. Since 1982, we have not seen such a surge in yields, which should cause trouble for the stock market
Driven by the ongoing conflict in the Middle East, safe haven gold rose on Wednesday, while investors were looking for key US economic data to further understand the Fed's policy path.
As of press release, spot gold rose 0.56% to $1982.10 per ounce. In the first two trading days, gold prices fell and were trading below the five month high hit last week.
Bob Haberkorn, senior market strategist at RJO Futures, stated that geopolitical concerns will not disappear in the short term, which will continue to support gold.
In response to the international community's call for a ceasefire in fighting, the Israeli military intensified its bombing campaign in southern Gaza overnight.
The US dollar index and the yield of benchmark US 10-year treasury bond bonds rose slightly, limiting the increase of gold price.
Investors' attention has shifted to the US Q3 GDP data released on Thursday and the US PCE price index released on Friday, which may affect the Federal Reserve's interest rate outlook.
Higher interest rates increase the opportunity cost of holding non yielding gold.
According to the Chishang Exchange's FedWatch tool, the market generally expects the Federal Reserve to maintain interest rates unchanged at next month's policy meeting.
Haberkorn added that if the data shows an economic slowdown, it will give the Federal Reserve more reasons not to raise interest rates, which should be very beneficial for gold and bring the price back above $2000.
Tuesday's survey showed that US business activity increased in October, while eurozone output unexpectedly deteriorated, highlighting the divergent paths of central bank governors in the two regions.
