Stocks Shrug Off ‘Big Bank Gloom’ as Tech Rallies: Markets Wrap

(Bloomberg) — A rally in the world’s biggest technology companies lifted stocks, countering a slew of cautious comments from bank executives that sent financial shares tumbling.

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In a session of many twists and turns, the S&P 500 wiped out losses. Tesla Inc. led gains in megacaps after a bullish analyst call. Oracle Corp. hit an all-time high. Bank of America Corp. said results for investment banking will come in lower than some on Wall Street expected. JPMorgan Chase & Co. also tempered its earnings optimism. Earlier this week, Goldman Sachs Group Inc. signaled its trading unit is on course to drop 10% from the prior year.

Traders also weighed election risks ahead of the first debate between former President Donald Trump and Vice President Kamala Harris. The match-up promises more clarity for investors who’ve already spent months parsing campaign-trail language around tax proposals, tariff projections, government spending plans and policies on energy, electric vehicles, health care and more.

In the run-up to the consumer price index, a 22V Research survey showed that 56% of respondents believe that its core measure is on a Fed-friendly glide path. Meantime, the share of investors expecting a recession has stayed elevated. Roughly 48% of investors surveyed expect the market reaction to CPI to be “mixed/negligible,” 32% said “risk-on” and only 20% “risk-off.”

“Given the market’s aggressive expectations for Fed rate cuts, a hotter reading should lead to downside volatility,” said Sameer Samana at Wells Fargo Investment Institute. “A cooler print has more two-way risk as it creates more room for the Fed to cut, but may also indicate the economy is slowing faster than anticipated.”

The S&P 500 rose 0.4%. The Nasdaq 100 added 0.8%. The Dow Jones Industrial Average slid 0.2%. A Bloomberg gauge of the “Magnificent Seven” megacaps climbed 1.4%. The Russell 2000 of small firms retreated 0.2%. The KBW Bank Index sank 1.8%.

Treasury 10-year yields dropped six basis points to 3.64%. Brent futures dropped below $70 as oversupply fears deepened.

Key events this week:

• US CPI, Wednesday

• Japan PPI, Thursday

• ECB rate decision, Thursday

• US initial jobless claims, PPI, Thursday

• Eurozone industrial production, Friday

• Japan industrial production, Friday

• U. Michigan consumer sentiment, Friday

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Some of the main moves in markets:

Stocks

• The S&P 500 rose 0.4% as of 3:25 p.m. New York time

• The Nasdaq 100 rose 0.8%

• The Dow Jones Industrial Average fell 0.2%

• The MSCI World Index rose 0.1%

• Bloomberg Magnificent 7 Total Return Index rose 1.4%

• The Russell 2000 Index fell 0.2%

• KBW Bank Index fell 1.8%

Currencies

• The Bloomberg Dollar Spot Index was little changed

• The euro was little changed at $1.1027

• The British pound was little changed at $1.3084

• The Japanese yen rose 0.6% to 142.33 per dollar

Cryptocurrencies

• Bitcoin rose 0.9% to $57,518.26

• Ether rose 0.9% to $2,362.81

Bonds

• The yield on 10-year Treasuries declined six basis points to 3.64%

• Germany’s 10-year yield declined four basis points to 2.13%

• Britain’s 10-year yield declined four basis points to 3.82%

Commodities

• West Texas Intermediate crude fell 3.9% to $66.06 a barrel

• Spot gold rose 0.4% to $2,515.65 an ounce

This story was produced with the assistance of Bloomberg Automation.

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