Wall Street stocks fall ahead of new round of corporate earnings

Wall Street stocks fell on Monday as investors braced for the start of another US corporate earnings season, amid an increasingly bleak economic backdrop.

The broad S&P 500 index steadied after the opening bell, while the tech-heavy Nasdaq Composite fell 0.3%. In Europe, the regional Stoxx 600 index added 0.1%.

Those moves followed a sell-off on Wall Street on Friday, with the S&P index closing down 2.8% after a labor market report showed employment remained strong.

Such data has been scrutinized in recent months for clues about how aggressively the US Federal Reserve will raise interest rates, with signs of continued resilience across the board. The labor market spurred expectations of tighter monetary policy.

Monday’s quiet performance in the stock market also preceded a flurry of third-quarter corporate earnings announcements, with Wall Street banks poised to lead the charge.

Investors will analyze companies’ financial statements for evidence of stress from high inflation and rising borrowing costs, with fears growing this year that central banks will raise interest rates into a recession – leaving businesses in many sectors even more stressed.

New US inflation data on Thursday will also shed light on the effectiveness of the Fed’s tightening efforts so far, after the central bank raised interest rates by a huge 0.75 percentage points in three meetings. consecutive meetings. A Reuters poll put the consumer price index of the world’s largest economy at 8.1 percent in September annually, compared with 8.3 percent in August.

The US Treasury market was closed on Monday for a holiday. UK government bonds are under renewed pressure at all maturities, even after the Bank of England Measures to be disclosed to ease the strain on UK pension funds, including increasing purchase limits under the country’s emergency gilding purchase scheme.

The central bank has stepped in to ease trading uncertainty for holders after the government’s “small” Budget last month caused historic price swings in debt instruments – especially for debt instruments. with bonds with a longer maturity. The initiative will end on Friday.

The 10-year UK government bond yield added 0.16 percentage points to 4.4% on Monday, while the 30-year yield added 0.17 percentage point to 4.56%. Two-year yields also edged higher, rising 0.28 percentage points to 4.34%. Bond yields increase as their prices fall.

“There is a lot of focus on the fact that the gold-plated buying will actually end this weekend,” said Antoine Bouvet, price strategist at ING. “The underlying fear is that the facility hasn’t been used much by the pension fund – there are concerns that there could be more sales when the sale closes.”

Trading in Asia was sparse as Japan, South Korea and Taiwan were closed for public holidays. But Hong Kong’s Hang Seng lost nearly 3% and China’s CSI 300 index fell 2.2%, dragging down chipmakers.

Last week, Washington debuted new export control to limit Beijing’s technological self-sufficiency plans by restricting the sale of semiconductors made with U.S. technology, unless suppliers obtain export licenses. US chipmakers also came under pressure in Friday’s trading session after industry giant Advanced Micro Devices cut its revenue estimates.

Additional reporting by Hudson Lockett in Hong Kong


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