Oct 7 (Reuters) – US stock indexes closed lower on Oct 7 while Treasury yields rose, as traders tamped down bets for Federal Reserve interest-rate easing and worried about the Middle East conflict’s impact on oil prices.
While waiting for quarterly earnings season and fresh economic data, investors also braced for another big hurricane, Milton, which is expected to hit the United States this week. Relief efforts are under way after Helene, a Category-4 hurricane that killed more than 200 people across six states.
Further dampening sentiment on Oct 7 was an order from a US judge for market heavyweight Alphabet’s Google to overhaul its mobile-app business to give Android phone users more options.
After Friday’s stronger-than-expected jobs report, traders pulled back from bets for a 50-basis-point rate cut in November. They were pricing in an 86 per cent chance of a 25-basis-point cut and a roughly 14 per cent chance the central bank would not cut rates at all, according to the CME’s FedWatch tool.
The change in rate-cut expectations caused US Treasury yields to rally, with the yield on benchmark 10-year notes exceeding 4 per cent for the first time in two months.
Besides next month’s Fed meeting, investors are waiting for the Consumer Price Index inflation reading for September and the kickoff of third-quarter earnings season with reports from banks, both due this week.
“It’s a combination of things over the last couple of days: the jobs report, the hurricane damage, the elevated energy prices and negative comments about some of the large-cap tech names,” said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles.
“All of that combined just makes for a nervous day, and the Google headlines tipped things over to more aggressive selling in the last hour.”
James also pointed
