Global stocks remained unchanged amid fluctuating trading on Thursday, as U.S. Treasury yields and strong corporate earnings alleviated concerns regarding the forthcoming U.S. elections and potential rate cuts.
Tesla surged by 19% after CEO Elon Musk shared a positive forecast on Wednesday regarding substantial car sales growth anticipated for next year, which reassured investors.
The benchmark S&P 500 and the Nasdaq experienced slight increases, bolstered by gains in consumer discretionary shares, while materials and industrials stocks faced losses.
The Dow Jones Industrial Average decreased by 0.48% to 42,310.36, the S&P 500 advanced 0.11% to 5,803.54, and the Nasdaq Composite climbed 0.55% to 18,377.64.
European stocks rose by 0.03%, breaking a three-day streak of losses, driven by positive earnings reports from companies such as Renault, Unilever, and Hermes. MSCI’s global stock index dipped 0.02% to 844.16.
“Markets have seen declines over the past three or four days, serving as a bit of a breather after a substantial rally, with most equity indexes still hovering near their all-time peaks,” remarked Michael Farr, president and CEO of Farr, Miller & Washington.
“It could be that the Fed is not going to reduce rates as much and as fast as (investors) would like. Nonetheless, the essential point is that the economy is doing alright, and earnings season is approaching with expected reasonable growth,” added Farr.
Traders are factoring in a nearly 92% likelihood of a 25-basis-point cut at the Federal Reserve’s meeting in November, as per the CME Group’s FedWatch Tool. The benchmark 10-year note yields recently fell by 4.4 basis points to 4.045% after hitting 4.26% on Wednesday, marking the highest level since July 26.
The U.S. dollar weakened following data that reinforced expectations for a more gradual pace of rate cuts by the Fed. Claims for unemployment aid unexpectedly dropped to 227,000 last week, indicating a more robust labor market.
The greenback declined by 0.62% against the Japanese yen, reaching 151.8. The euro increased by 0.2% to $1.0802, while the pound rose by 0.27% to $1.2958.
The dollar index, which gauges the greenback against a basket of currencies, including the yen and euro, dropped by 0.25% to 104.18.
Gold prices climbed to near-record levels due to safe-haven demand amid ongoing geopolitical tensions and investors looking for security ahead of the close U.S. elections on Nov. 5.
Spot gold increased by 0.44% to $2,729.58 per ounce. U.S. gold futures rose by 0.54% to $2,729.00 per ounce.
Oil prices decreased by about 1% in uneven trading amid concerns that sluggish economic growth in Europe could dampen energy demand.
Brent futures fell by 0.79% to $74.38 a barrel, while U.S. West Texas Intermediate crude lowered by 0.88% to $70.16.
“The fluctuations caused by factors such as elections and global geopolitical events tend to amplify market volatility; however, they generally do not have a substantial long-term impact on share prices,” Farr stated.
