- Concerns about the outlook for corporate earnings weighed on risk sentiment, as investors assessed the path for policy tightening.
- After struggling for direction throughout the session, the S&P 500 closed in the red for the first time in five days. The Dow Jones Industrial Average fell the most in a month, with financials weighing on the blue-chip index. Meanwhile, the tech-heavy Nasdaq 100 eked out gains, rising for a seventh day, as policy-sensitive short-dated treasury yields fell.
- As the reporting season ramps up, earnings may set the tone for traders this week. So far, 25 of the 33 S&P 500 companies that have reported results have outperformed analysts' expectations. While it is still early in the season, the emerging trend lags behind the positive surprises of earlier quarters.
- Treasury yields rose modestly at the front end of the curve, with the policy-sensitive two-year yield falling three basis points. European sovereigns drew bids as well, with the 10-year bund yield falling eight basis points. The drop in yields indicated that traders believe pressures on rate hikes are easing.
- The Dollar was trading near its lowest level since April, while the Euro fell. The Yen rose ahead of a Bank of Japan policy announcement.
- Data released today show that manufacturing activity in New York State fell to its lowest level since the early months of the pandemic, with new orders and shipments collapsing. The measure has shown contraction in five of the last six months, highlighting the extent of the manufacturing sector's pain as the Federal Reserve raises interest rates.
- According to a survey conducted by the New York Fed, spending growth is slowing as interest rates rise, but it remains high.
