Markets in 5Friday, October 30
Alphabet slide weighs on stocks as rate-hike bets persist
Alphabet's slide dragged the Nasdaq lower Thursday, Treasury yields eased after the Fed and ECB holds, and oil rose in early Friday trade.
Stocks
Alphabet slide drags Nasdaq as S&P 500 slips
The S&P 500 closed at 7,720.39 on Thursday, down 0.30% and ending a three-day win streak. The Nasdaq Composite fell 1.38% to 26,184.72, led lower by Alphabet, whose Class A shares dropped 12.6% in their worst day since they began trading more than 20 years ago. The Dow closed at 52,342.56, down 0.25%, while the Russell 2000 gained 1.01% to 2,859.22. Four in five S&P 500 stocks rose.
Rates
Treasury 10-year yield eases to 4.98%
The 10-year Treasury yield closed at 4.98% on Thursday, down 7 basis points from 5.05% the day before, according to official Treasury par yield data. The 2-year ended at 4.61%, leaving the 2s10s spread at 37 basis points. The 30-year eased to 5.32% from 5.37%, and yields fell after the Fed and ECB kept rates unchanged.
The Fed
Fed holds at 3.75% to 4% with two hike dissents
The Federal Reserve kept its target range at 3.75% to 4% on Wednesday, with Governor Lisa Cook and Cleveland's Beth Hammack dissenting in favor of a quarter-point increase. Chair Kevin Warsh said the Fed will hold fewer rate-setting meetings in future years and that the discussion focused mainly on price stability. The CME FedWatch Tool put the odds of a hike this week at 9% and of a December hike at 84%, figures that predate Thursday's data.
Economy
Third-quarter GDP beats estimates as September inflation firms
Advance estimates put third-quarter GDP growth at a 3.4% annualized pace, above the 3.1% estimate and up from 2.2% in the second quarter. September PCE prices rose 0.5% from August and 3.6% from a year earlier, while core PCE rose 0.3% monthly and 3.1% annually. Consumer spending rose 0.5%, below the 0.6% forecast, and real disposable income fell 0.3%.
Commodities
Oil rises while gold holds near $4,000 overnight
In early trade on Friday, Brent was about $112.65 a barrel, up 1.7%, and WTI about $102.91, up 0.9%, after Brent moved toward $114 on Thursday as diplomacy hopes emerged. Reports of possible US strikes on Iran after the midterms and Houthi threats to Saudi oil facilities lifted crude. Gold was near $4,000 an ounce, down about 0.5%, as traders priced in a possible US rate increase.