On Friday, global stock markets, including those in the US and Europe, experienced declines due to rising US treasury yields reaching a 16-year high and the potential escalation of the Israel-Hamas conflict. The MSCI global stocks gauge fell by 0.89%, while emerging market stocks saw a 1.23% loss, according to the final summary published on October 20, 2023.
Federal Reserve Chairman Jerome Powell’s comments on Thursday regarding possible interest rate hikes, attributed to a robust economy and tight labor market, heightened trader risk aversion. This led to losses in Wall Street indices such as the S&P 500, Nasdaq Composite, and Dow Jones Industrial Average.
In Europe, poor corporate earnings resulted in a two-week low for STOXX 600, with declines also seen in Germany’s DAX, France’s CAC 40, and Britain’s FTSE 100. Asian markets including Hong Kong’s Hang Seng index, China’s Shanghai Composite, Japan’s Nikkei 225, Australia’s S&P/ASX 200 index, and New Zealand’s S&P/NZX 50 index also ended lower.
On the commodities front, energy prices saw mixed trends with rises in US crude oil and Brent crude but a fall in natural gas. Gold prices increased while silver decreased.
On Thursday, October 19, U.S. equities took a downturn due to Powell’s remarks suggesting an economic slowdown for inflation control and potential future interest rate hikes. This resulted in a nearly 5% yield on the 10-year Treasury note.
Various companies experienced significant shifts in share prices. Tesla (NASDAQ:TSLA) saw a 9.3% drop due to missed earnings and revenue forecasts following price cuts aimed at stimulating demand. In contrast, Netflix (NASDAQ:NFLX) surged by 16.1% after adding nearly 9 million Q3 subscribers and announcing a price hike.
Genuine Parts was the day’s weakest S&P 500 performer, with shares plunging by 12.5% due to below-expected revenues and flat same-store sales. Discover Financial Services (NYSE:DFS) saw a 7.9% decrease in shares as profits plunged due to increased delinquencies. AT&T (NYSE:T)’s shares rose by 6.6% driven by subscriber growth, while Union Pacific (NYSE:UNP) saw a 2.1% jump in shares after surpassing profit forecasts. American Airlines (NASDAQ:AAL) shares rose by 0.8%, buoyed by positive profit expectations and an optimistic outlook for the upcoming holiday travel season.
