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Earnings Drive Nasdaq and S&P 500 Downwards

Drive, Earnings, Nasdaq

“As earnings take the wheel, Nasdaq and S&P 500 navigate a turbulent market, highlighting the crucial role of corporate performance in shaping investor sentiment.”

Stocks opened lower today as investors continue to digest the impact of disappointing Big Tech earnings reports and rising bond yields. The tech-heavy Nasdaq and S&P 500 dropped about 0.5% and 0.4%, respectively, while the Dow Jones Industrial Average remained flat. Tech stocks are still under pressure after experiencing their worst single-day performance in eight months on Wednesday.

Earnings reports are currently driving the market, with investors punishing megacaps whose third-quarter reports turned out to be more downbeat than expected. While Meta’s earnings beat expectations, its shares reversed initial gains after the company warned that geopolitical unrest could negatively affect its ad business. The flow of earnings resumes today, with Amazon, Intel, Ford, and Chipotle being the highlights on the docket.

There are growing concerns that valuations are too high in a world of surging Treasury yields. Despite the Federal Reserve’s higher for longer interest rate mantra, the US economy grew at its fastest pace in nearly two years, with the GDP growing at an annualized pace of 4.9% during the third quarter. Other central banks, such as the European Central Bank, are also beginning to shift their monetary policy, with the ECB holding interest rates steady for the first time in over a year.

In other news, Ford and the United Auto Workers (UAW) reached a tentative labor deal, indicating that the ongoing autos strike could be nearing an end. The UAW said the tentative agreement includes base wage increases and raises for workers, along with the reinstatement of COLA provisions and the end of wage tiers. The deal is still subject to approval by UAW’s Ford national council and ratification by UAW’s 57,000 Ford workers.

Overall, stocks opened lower today and futures point to a return to sell-off, with investors closely watching earnings releases and the impact of rising bond yields.

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