Stock Market Today: Dow futures slide after poorly-received Meta and Microsoft earnings

U.S. stocks closed lower on Thursday, with the Dow and S&P 500 cementing their first monthly loss since April as tech stocks sold off sharply and bond yields remained elevated.

The Nasdaq slid 2.8% on Thursday, leading the other two major indexes lower.

For October:

The surprise in October has been that stocks finally took a breather from a multi-month string of gains.

The blue-chip Dow and S&P 500 index were on pace for losses of 1% and 0.6%, respectively, in October, and for the biggest month of losses since April 2024, according to Dow Jones Market Data.

They each scored a five-month winning streak in September, while the Nasdaq Composite rose in August and September. October was shaping up to the the Nasdaq’s worst month since July, according to Dow Jones Market Data.

Thursday’s session ended with Treasury yields seeing their biggest monthly jumps in more than a year, as investors and traders focused on the outlook for the U.S. deficit.

The 2-year rate climbed 51.4 basis points during October, the most for a single month since February 2023, according to Dow Jones Market Data. Ten- and 30-year yields respectively rose 48.4 basis points and 34.2 basis points, which were the biggest monthly jumps since this past April.

Oil futures finished higher on Thursday and U.S. prices extended those gains to top $70 a barrel in electronic trading, as traders weighed the growing risk of an Iranian attack on Israel that would further fuel tensions in the oil-rich Middle East.

Iran is reportedly preparing an attack in response to Israel’s recent strike on Iran, with Axios reporting that it could come within days.

“People may be meaningfully underappreciating the supply disruption risks if there is continued escalation,” said Matthew Polyak, managing partner at Hummingbird Capital. While the major producers known as OPEC+ do have “spare capacity to backfill disruptions, it’s not something that happens instantly,” he said, estimating that it would take at least six months to offset potential supply disruptions that could pose sharp upside risk to crude oil prices.

West Texas Intermediate crude for December delivery rose 65 cents, or about 1%, to $69.26 a barrel on the New York Mercantile Exchange. It ended the month up 1.6% and extended its gains into Thursday’s electronic session to top $70. On its expiration day, December Brent crude added 61 cents, or 0.8%, to end at $73.16 on ICE Futures Europe, up 1.9%.

Pressure on the tech sector, on the back of climbing bond yields, put the Nasdaq Composite index on pace for its worst day in two months, according to Dow Jones Market Data.

“When investors are anticipating higher yields, it pushes you away from the Nasdaq,” said Roosevelt Bowman, senior investment strategist at Bernstein Private Wealth Management.

While the 10-year Treasury yield was pulling back slightly Thursday afternoon to 4.27%, it has still climbed dramatically since mid-September, as economic data came in better than expected and markets looked to hedge a potential election win next week by former President Donald Trump.

Bowman said his team expects tighter monetary policy to lead to slower economic growth and lower yields eventually, which should favor the stock market’s continued broadening out beyond a small group of tech giants.

Gold has been rising month after month, said Peter Spina, president and founder of GoldSeek.com. Whether today’s pullback in prices is a “minor dent in this huge rally” that’s set to reverse over the coming days or a “deeper, multiweek consolidation” is a difficult question to answer, he said. There’s “a lot in the air.”

The main focus at the moment, however, is next week’s political uncertainties, with the U.S. presidential election potentially creating some volatility, Spina said. Overall, it has been a “net positive for gold” so far as fears around this uncertain outcome are bringing in some safe-have buying.

On Thursday, gold for December delivery fell $51.50, or 1.8%, to settle at $2,749.30 an ounce on Comex. Based on the most active contract, it marked the biggest daily percentage decline since late July, according to Dow Jones Market Data. Gold futures ended the month with a 3.4% gain.

How big has the tech sector’s Halloween slump been?

The S&P 500’s information-technology sector was down 3.4% on Thursday, on pace for its biggest one-day drop in about two months, according to FactSet data.

Mixed reception to a big earnings week from megacap tech stocks were partially blamed for the selloff, as well as the sharp jump in benchmark Treasury rates since mid-September.

Intel’s stock was dropping 3.2% in recent trading, and has shed 5.8% amid a three-day losing streak, as investors adjust positions ahead of the chip maker’s third-quarter results due after the close.

The stock has now dropped 4.9% this week, and was also headed for a third-straight weekly decline.

It’s not such a surprise for there to be selling ahead of earnings, as the stock has tumbled by an average 15.7% the day after the past three earnings reports.

And the day after the past 17 earnings reports, the stock has fallen 13 times, including a nine-quarter streak from the second quarter of 2020 through the second-quarter of 2022.

So much for that six-month winning streak.

U.S. stocks were on track to finish October in the red on Thursday as a Halloween selloff threatened to wipe out all gains from earlier in the month.

The S&P 500, Dow Jones Industrial Average and Russell 2000 were poised for solid monthly losses in afternoon trading on Thursday. The Nasdaq Composite, meanwhile, was roughly unchanged for the month, meaning the index could still go either way.

Finishing October in the red would snap a five-month winning streak for the S&P 500 and the Dow. The Russell 2000 also tallied monthly losses in June and August, while the Nasdaq saw a pullback in July.

Here is where things stood in recent trade:

The rapid rise in U.S. government bond yields has started to pressure equities, said Jimmy Chang, chief investment officer of the Rockefeller Global Family Office.

While earnings guidance has been “somewhat mixed” in the third quarter, prompting some selling in tech, the bigger drivers of markets on Thursday appeared to be the U.S. election and Treasury yields, Chang told MarketWatch on Thursday.

He’s bracing for volatility around the election given how close polling looks, but should the 10-year Treasury yield spike to 4.5%, he sees potential for “more of a near-term pullback” in stocks. The 10-year yield was close to 4.28% Thursday.