Government bond yields are recovering

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Yields continue to weigh on stocks
U.S. stocks slumped on Wednesday as Treasury yields continued to rise. Megacaps like Apple, Nvidia And Meta fell by more than 2%. On Thursday, Asia-Pacific markets largely followed Wall Street’s downward trend. South Korea Kospi The index lost about 0.7% as the country reported quarterly GDP growth of 0.1%, narrowly avoiding a technical recession.

Tesla exceeds profit forecast
Tesla Shares rose 12% in extended trading after the company’s third-quarter earnings beat Wall Street estimates. However, Tesla’s revenue in the period, which rose 8% year over year, fell slightly short of expectations. “Vehicle growth” will reach up to 30% next year thanks to “lower-cost vehicles” and the “advent of autonomy,” CEO Elon Musk said.

Record win for SK Hynix
SK Hynix reported record third-quarter profit of 7.03 trillion won ($5.08 billion), beating LSEG estimates. The South Korean chipmaker’s quarterly revenue rose 94% year over year, but still fell slightly below expectations. SK Hynix is ​​one of the world’s largest memory chip manufacturers and a key supplier to Nvidia.

Possible Chinese ties to Apple Intelligence
According to a statement from the ministry, Apple CEO Tim Cook met with Chinese Minister of Industry and Information Technology Jin Zhuanglong in the country on Wednesday. “The company may look to strengthen cooperation with local players to introduce Apple Intelligence in China,” said Ivan Lam, senior research analyst at Counterpoint Research.

[PRO] Top picks of European stocks
The European stock market may be underperforming the US stock market so far, but that’s a generalization that doesn’t apply to all stocks. Bernstein has named his “top picks” for European stocks, including four from different sectors that the research firm believes have the potential to rise more than 50%.

Like an unwelcome ex-partner who shows up at the most inconvenient times and refuses to leave, Treasury yields have returned and are in the market spotlight.

Yields have risen over the last month 10-year Treasury Department The yield rose about four basis points to 4.25% on Wednesday. During the US trading session, the 10-year yield hit 4.26%, the highest level since July 26.

This comes even though the Federal Reserve cut interest rates by 50 basis points at its September meeting and said it would continue to cut rates by the same amount through the end of the year.

It seems as if markets have moved from worrying about weakness in the US to worrying about the US economy being too strong.

The Fed’s “Beige Book” had a positive impact on the economy. Most regions in the U.S. “reported low labor turnover and layoffs were reportedly contained,” the report said, while “contacts were somewhat more optimistic about the longer-term outlook.”

It is therefore not inconceivable that the strong economy could prompt the Fed to slow or even hold off on rate cuts.

“For me it’s all about the impact of higher interest rates. “The market is reassessing the likelihood that the Fed can aggressively cut interest rates,” said Brent Schutte, chief investment officer at Northwestern Mutual Wealth Management.

The stock market collapsed as yields rose again. The S&P 500 decreased by 0.92% Dow Jones Industrial Average lost 0.96% – its worst day in more than a month – and the Nasdaq Composite fell by 1.6%.

But Paul Hickey, co-founder of Bespoke Investing Group, said investors shouldn’t panic. “It’s a tough day, but these days they happen,” Hickey told CNBC. And Wells Fargo believes shares could rise in 2025 despite near-term uncertainties.

While rising Treasury yields appear to have stalled the stock rally like most unwelcome guests, they are likely to decline over time and markets should resume their upward trajectory if earnings continue to be strong.

— CNBC’s Jeff Cox, Lisa Kailai Han, Pia Singh and Brian Evans contributed to this report.