- US stocks fell on Wednesday, dragged down by a sharp sell-off in mega-cap technology stocks.
- Alphabet stock fell 10% after it reported a slowdown in revenue growth for its cloud division.
- Interest rates jumped with the 10-Year US Treasury yield approaching 5% after a weak auction.
A sharp decline in mega-cap tech stocks dragged the broader stock market lower on Wednesday.
Alphabet fell 10% after its third-quarter earnings results revealed a marked slowdown in the revenue growth for its Cloud unit. That cloud weakness helped drag Amazon lower by more than 5%. Microsoft was the only mega-cap tech stock in the green, rising about 3% after it reported an impressive earnings beat.
The sell-off in stocks was exacerbated by a rise in bond yields on Wednesday, with the 10-year US Treasury yield rebounding about 12 basis points to 4.95%.
The sharp rise in yields came after an auction for five-year Treasury notes revealed weak demand from potential buyers. The Treasury department is set to announce auction size increases next week, which could be adding to the anxiety as investors worry about an oversupply of Treasury issuances.
Meanwhile, the US House of Representatives elected Mike Johnson to be House Speaker after three weeks of Republican infighting following the motion to vacate Kevin McCarthy as speaker. Now the question is whether Johnson can pass a bill to keep the government open ahead of the mid-November shutdown deadline.
"Markets, particularly Treasury markets, needed to see the gears of government reengaged and functioning. Now, all eyes are on November 17 to keep the government open," Harris Financial Group's managing partner Jamie Cox told Insider.
Here's where US indexes stood at the 4:00 p.m. closing bell on Wednesday:
- S&P 500: 4,186.75, down 60.93%
- Dow Jones Industrial Average: 33,036.00, down 0.32% (-105.12 points)
- Nasdaq Composite: 12,821.22, down 2.43%
Here's what else happened today:
- Wall Street titans Ray Dalio, Larry Fink, and Steve Schwarzman all issued grim economic outlooks at an event in Saudi Arabia on this week.
- Reports of China's campaign to undermine the dollar by dumping US Treasurys are overblown, according to a report from Lloyds Bank.
- The sharp rise in bond yields over the past year can have a big impact on the livelihoods of ordinary people, from buying a house to holding onto a job.
- The US's $33 trillion debt mountain is bound to grow even larger – and policymakers can't rely on the economy simply growing its way out of its debt problems.
- Chinese real estate developer Country Garden has been officially declared in default after failing to meet obligations on a dollar bond.
In commodities, bonds, and crypto:
- West Texas Intermediate crude oil rose 1.87% to $85.31 a barrel. Brent crude, the international benchmark, climbed 2.23% to $90.05 a barrel.
- Gold edged up 0.37% to $1,993.10 per ounce.
- The 10-year Treasury yield jumped 11 basis points to 4.94%.
- Bitcoin rose 2.07% to $34,625.