April 18 (UPI) — U.S. markets fell slightly on Monday as the yield on 10-year Treasury bonds hit a five-year high as investors awaited more quarterly results.
The Dow Jones Industrial Average fell 39.54 points, or 0.11%, while the S&P 500 slipped 0.02% and the Nasdaq Composite closed down 0.14%.
Stocks traded ups and downs in a choppy session but settled into the red as the benchmark 10-year Treasury yield traded at 2.884% at one point, its highest. high since 2018. The yield started in March at 1.71%, but climbed amid plans by the Federal Reserve to tighten monetary policy.
“The big concern is how much and how much the 10-year rating will rise,” said CFRA chief investment strategist Sam Stovall, according to CNBC.
“Nothing is really new on the Ukraine front, nothing is really new on the inflation front, the Fed is expected to hike 50 basis points at its next meeting. So really, the question is, what do bonds do?”
Software companies fell as investors shunned growth-focused stocks amid rising yields, with Zoom Video down 4.14%, Datadog down 3.62%, Okta down 2.69% and Workday down 2.3%.
Conversely, shares of Google parent Alphabet rose 0.75%, Facebook parent Meta gained 0.28% and Microsoft climbed 0.25% as mega-cap tech companies cushioned the blow.
Twitter shares rose 7.4% after the company announced on Friday that its board had adopted a time-limited shareholder rights plan or “poison pill” in response to billionaire Elon Musk’s bid. to buy the company for $43 billion.
Bank of America stock rose 3.41% as it posted a 13% year-over-year drop in earnings per share in the first quarter, but slightly beat expectations.
Investors expect a slew of other high-profile earnings this week from companies including United Airlines, American Express, Netflix and Tesla.
So far, 7.5% of S&P 500 companies have reported and 77% have exceeded Wall Street estimates for earnings per share, which is a five-year average to beat analysts’ estimates, according to FactSet.
“I think we’re potentially in for a tough earnings season, just because when people gave advice [last quarter]input costs have clearly gotten worse than they expected,” Rhys Williams, chief strategist at Spouting Rock Asset Management, told Yahoo Finance.
On Monday, the World Bank also announced plans to spend $170 billion to mitigate a predicted global economic slowdown amid Russia’s war in Ukraine.
Natural gas futures rose 5% during the day, topping $8 per million British thermal units for the first time since 2008 amid the conflict, with Russia a major supplier of natural gas from Western Europe.