New York, US, Oct 31 (EFE). – Wall Street is experiencing its third consecutive month of losses, weighed down by the rise in US bond yields to levels not seen in 16 years and the fear of a prolonged environment of high interest rates.
The worst hit is the Nasdaq index, which is down 2.8% in its worst October since 2018, in part dragged down by the quarterly results of major technology companies, which in several cases disappointed and were followed by stock sell-offs.
The S&P 500 fell 2.2% and the Dow Jones Industrial Average fell 1.4%, in both cases marking their worst October since 2020.
The yield on the benchmark 10-year Treasury note rose above 5% this month for the first time since 2007, which analysts attribute to the prospect of the Federal Reserve (Fed) keeping interest rates high for longer.
This was suggested by the central bank’s president, Jerome Powell, in his last public intervention before the monetary policy meeting.
The meeting begins on Wednesday and is expected to last until Thursday, with rates remaining unchanged.
According to Chris Iggo, Chief Investment Officer of Axa Investment Managers and President of the AXA IM Investment Institute, “what will be important for the markets will be expectations of the next moves in the Fed’s path, which remains hawkish.
The latest data on the US economy continue to point to its resilience, with better-than-expected GDP growth of 4.9% in the third quarter, but inflation stagnating at 3.7% in September.
At the corporate level, several of the “big tech” companies have reported earnings, continuing to post multi-million dollar profits, but their latest quarter was poor.
Meanwhile, geopolitical tensions were a major concern, with the war in Ukraine being joined by an escalation in the Middle East following the October 7 attack by the Islamist group Hamas on Israel and the subsequent Israeli offensive on Gaza.
This conflict has particularly affected crude oil prices, which have been volatile and in the case of the Texas barrel, lost 11% of its value in October to $81.02.
October is usually a weak month for the markets, but November is not, analysts expect a better performance, taking into account that the days of greatest consumption of the year are ahead, including Black Friday. EFE