The S&P 500 ticked lower for a third straight day, as Wall Street assessed the latest corporate earnings results and struggled to shake off pressure from rising bond yields.
The S&P 500 fell 0.25% to finish at 4,501.89, while the Dow Jones Industrial Average lost 66.63 points, or 0.19% to end at 35,215.89. The Nasdaq Composite inched down 0.1% to 13,959.72.
Yields popped, with the benchmark 10-year Treasury yield trading around 4.18% and near its highest level since November 2022. The rise in rates pressured the real estate sector, which dropped more than 1%, while the Cboe Volatility index spiked to its highest level since June. Utilities lost 2.3%.
“There’s an overhang,” said Bryce Doty, portfolio manager at Sit Investment Associates. “As yields are drifting higher, it’s putting pressure on stocks.”
Many on Wall Street have also noted that the market has been long overdue for a breather, or a slight correction, after hitting rally-mode for the better part of the year. Earlier in the week, both the S&P 500 and Nasdaq notched their fifth straight month of gains.
“Momentum has been quietly eroding over the last few weeks and was the motivation for our correction hunch a few weeks back,” said Chris Verrone, Strategas head of technical and macro research in a Thursday note. “Experience reminds us that such episodes usually work in a three-step process… break, tepid rally, break again,” although the longer-term trend is up.
The busy earnings week carried on, with chipmaker Qualcomm losing about 8.2%. A day earlier, the company missed on fiscal third-quarter adjusted revenue and posted disappointing guidance. PayPal shed 12.3% despite posting in-line results a day earlier, while Expedia plunged 16.4% as gross bookings fell short of expectations.
The market faces another major earnings test Thursday as tech bellwethers Apple and Amazon report results after the bell. Thus far, nearly 79% of S&P 500 companies have issued quarterly reports, with about 82% beating expectations, according to FactSet. Earnings are also expected to fall about 5% from a year ago.
In other news, the Bank of England on Thursday hiked interest rates by 25 basis points, in the latest move by a global central bank to tame inflation.
Wall Street also assessed the latest economic data, including in-line weekly jobless claims and second-quarter productivity data that showed an uptick.
