Markets in 5Wednesday, October 21
Stocks rally broadens as megacap tech lags
Broad gains on Tuesday as the Dow and small caps led, Treasury yields eased after weak housing data, and Wednesday's overnight tone was firmer.
Stocks
Dow and small caps lead as Nasdaq stalls
The Dow Jones Industrial Average closed up 1.02% at 52,495.88 on Tuesday, a gain of 529.85 points led by 3M, which rose 5.78%. The S&P 500 rose 0.28% to 7,712.57, while the Nasdaq Composite slipped 0.02% to 26,424.82 as megacap technology lagged. Breadth was strong, with 1,614 NYSE advancers against 559 decliners, and the equal-weight S&P 500 ETF rose 1.15%. Small caps had their strongest day in more than two months.
Rates
Treasury yields ease as housing data weakens
The 10-year Treasury yield closed at 5.12% on October 20, down 3 basis points from 5.15% the previous day. The 2-year yield was 4.79%, leaving the 2s10s spread at 33 basis points. Yields edged lower after a string of weaker-than-expected housing reports highlighted the strain of elevated mortgage rates. A year earlier, on October 20, 2025, the 10-year yield stood at 4.00%.
Economy
Housing activity weakens across September reports
Pending home sales fell 7.3% from August in September, against an expected 0.4% decline, and were down 11.3% from a year earlier. Housing starts dropped 5.2% to a 1.221 million annual pace, with single-family starts at 859,000. Building permits fell 0.2%, where a 2% gain had been expected. Completed existing-home sales rose 1.5% to a 3.99 million annual rate.
Earnings
GM falls despite earnings beat and buyback
General Motors fell about 7% on Tuesday despite beating estimates and announcing a $20 billion share buyback, as its chief executive warned of intensifying challenges. The company's cash flow remains strong even with softening sales, according to Bloomberg's reporting. 3M rose nearly 6% after an earnings beat, a raised outlook and an expanded data-center partnership with Amazon.
Global
Nikkei closes higher while stock futures point up
Japan's Nikkei 225 closed up 0.85% at 64,621.24 in the overnight session. Early Wednesday, U.S. stock futures were higher as traders weighed the latest round of earnings reports, and Nasdaq 100 futures were up 0.7% in one Asia wrap. In Europe, Stoxx 50 futures were up about 0.3% to 0.4%. UK annual inflation rose to its highest level in a year.