As Treasury yields soar to multi-year highs, major tech stocks like Tesla, Nvidia, Alphabet, and Meta Platforms are experiencing significant pullbacks from recent peaks. Meanwhile, investors are closely watching key economic reports, including the ADP private payrolls and the PCE price index, alongside earnings from agricultural giant Cal-Maine Foods and tech bellwether Micron, which are expected to influence market sentiment.
Wall Street is bracing for a dynamic trading session, with market participants keenly focused on soaring Treasury yields and a series of pivotal economic data releases and corporate earnings. This daily market preview, a first look at tomorrow and a last look at today, highlights the forces exerting pressure on equities and what’s on the immediate radar.
Tech Heavyweights Face Headwinds
The tech sector, often a market leader, is currently navigating significant pressures. Following an unprecedented meeting at the White House on artificial intelligence, featuring industry titans like Elon Musk (Tesla, SpaceX), Jensen Huang (Nvidia), Mark Zuckerberg (Meta Platforms), and Sundar Pichai (Alphabet), their respective companies' shares have seen notable corrections. SpaceX's valuation is down 34% from its June high, while Tesla has shed 30% since its December peak. Nvidia, despite a recent significant stock buyback announcement, is off 4% from its May high. Alphabet shares are down 16.5% from their May high, and Meta Platforms, though up 29% in September, is currently trading 5% below its latest high.
Cramer's Call: Goldman Sachs in Focus
In the financial sector, renowned "Mad Money" host Jim Cramer has advised investors to keep a close eye on Goldman Sachs. Cramer expressed confidence in CEO David Solomon's leadership, believing there's still substantial upside for the stock. Under Solomon’s eight-year tenure as CEO, shares have climbed over 300% (or 400% including dividends). While currently 20% off its June 15 high, Cramer's timing has been astute; his charitable trust acquired the stock in March, seeing a 15% gain since then. Other banking giants like Bank of America and Citigroup are also in double-digit declines from their highs, while JPMorgan is down 8.6%.
Bond Market Roars: Yields Hit Multi-Year Highs
A primary driver of current market sentiment is the relentless surge in U.S. Treasury yields. The 2-year yield recently touched a 28-month high, trading at 4.879%. More dramatically, the 10-year yield reached a 19-year peak, harking back to 2007, last recorded at 5.234%. The 30-year yield soared to levels not witnessed since 2002, topping 5.6% at its peak. These escalating yields typically make equities less attractive, particularly growth stocks, by increasing borrowing costs and raising the discount rate for future earnings.
Key Economic Data and Earnings Ahead
Wednesday is packed with critical economic releases and earnings reports that could significantly sway the market. The ADP private payrolls report, a closely watched indicator of the U.S. labor market, is due at 8:15 a.m. ET, with Dow Jones consensus estimates predicting a gain of 68,000, up from last month's 38,000. Shortly after, at 8:30 a.m. ET, the August personal consumption expenditures (PCE) price index will be released. This key inflation measure is expected to show a 0.3% month-over-month jump, with the year-over-year figure projected at 3.7%.
Before the market opens, agricultural sector heavyweights Cal-Maine Foods and Conagra are scheduled to report earnings. Cal-Maine Foods, a major egg producer, has seen its stock decline approximately 14% in three months and 30% over the past year. Conagra is up 1% in three months but is down 30% from its February high.
Post-market close, tech giant Micron will unveil its latest financials. The company's stock has faced challenges, down 7% in three months and 15% from its June 25 high. Investors will be scrutinizing its outlook, especially given the broader pressures on the tech sector.
