Overview
On Monday, U.S. stocks retreated from record highs as rising Treasury yields weighed on investor sentiment. Both the Dow Jones Industrial Average and the S&P 500 closed lower, ending their six-week streak of gains. While the Nasdaq Composite managed to post a modest gain, driven by a sharp rise in Nvidia stocks, many rate-sensitive sectors, including real estate, faced pressure. Investors remained cautious ahead of a busy earnings week, with major companies like Tesla, Coca-Cola, and Texas Instruments set to report.
- Dow Jones Industrial Average: Fell 0.80% to 42,931.60
- S&P 500: Lost 0.18% to 5,853.98
- Nasdaq Composite: Gained 0.27% to 18,540.01
Fear & Greed Index
Neutral – Market sentiment remains balanced between optimism over strong earnings and concerns about rising Treasury yields and stretched valuations.
Sector Performance
- Winners:
- Technology: Nvidia rose 4.14% to a record high, buoying the tech-heavy Nasdaq Composite.
- Aerospace: Boeing gained 3.1% after reaching a potential deal to end a costly strike.
- Losers:
- Real Estate: The rate-sensitive real estate sector dropped 2.08%, weighed down by rising Treasury yields.
- Small-Caps: The Russell 2000 fell 1.61% as economically sensitive small-cap stocks faced pressure from rising interest rates.
- Healthcare: Humana fell 2.46% amid reports of resumed merger talks with Cigna, which also slipped 4.69%.
Key Movers
- Nvidia (NVDA): Surged 4.14% to a record high, leading gains in the tech sector.
- Boeing (BA): Rose 3.1% after reports of a new labor deal to end a strike.
- Spirit Airlines (SAVE): Soared 53.06% after reaching a debt refinancing agreement.
- Humana (HUM): Dropped 2.46% following merger discussions with Cigna, which also fell 4.69%.
Economic Data
- Treasury Yields: The yield on the 10-year Treasury note jumped to 4.17%, its highest level in 12 weeks, causing concerns about prolonged high interest rates.
- Earnings: Investors are closely watching earnings reports, with 114 S&P 500 companies expected to release results this week. So far, 83.1% of companies have beaten earnings estimates.
Outlook
Looking ahead, investors will focus on earnings reports from major companies, as well as key economic data, including home sales, durable goods orders, and the Federal Reserve’s Beige Book. Rising Treasury yields and election-related uncertainties could lead to increased volatility in the market. Despite the pullback, the tech sector, particularly Nvidia, remains a bright spot, while sectors sensitive to rising interest rates, like real estate, may continue to face pressure.