The stock market took a hit on Monday afternoon as the 10-year Treasury yield surpassed 4% for the first time since August. This jump in the yield led to a drop in major stock indices, with the Dow Jones Industrial Average falling 1.2%, the S&P 500 shedding more than 1%, and the Nasdaq Composite dropping over 1.1%.
One factor contributing to the decline was a judge’s ruling that ordered Alphabet, the parent company of Google, to open up its app store business, Google Play, to more competition. Shares of Alphabet fell more than 2% following the ruling.
On top of that, oil futures spiked more than 3.5% as traders speculated on Israel’s potential response to Iran’s recent attack. The upgrade of Hurricane Milton to Category 5 status also fueled higher crude prices, while insurance stocks took a hit as the storm headed towards Florida’s coastline.
Moreover, with a better-than-expected September jobs report dispelling concerns about the labor market, hopes for a significant rate cut from the Federal Reserve have diminished. As a result, traders have scaled back bets on a 0.50% rate cut in November and now anticipate a 0.25% move.
Looking ahead, the focus will be on key consumer inflation data scheduled to be released later in the week to provide insight into the Fed’s progress in managing price pressures. Additionally, the start of third-quarter earnings season will kick off, with big banks like JPMorgan, Wells Fargo, and BlackRock set to report their financial results.
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